Filed pursuant to Rule 424(b)(5)

Registration Statement No. 333-270324

 

Prospectus Supplement
(To Prospectus dated April 12, 2023)

 

Green Giant Inc.

 

21,470,585 Common Units (each consisting of One Share of Common Stock, One Class A
Warrant and One Class B Warrant),

 

13,529,415 Pre-Funded Units (each consisting of One Pre-Funded Warrant, One Class A
Warrant and One Class B Warrant), and

 

Up to 13,529,415 Shares of Common Stock Underlying Pre-Funded Warrants, up to
35,000,000 Shares of Common Stock Underlying Class A Warrants, and up to
109,763,314 Shares of Common Stock Underlying Class B Warrants

 

We are offering on a best efforts basis 21,470,585 common units (each, a “Common Unit”, collectively, the “Common Units”), each consisting of one share of our common stock, $0.001 par value per share (the “common stock”), one Class A common warrant to purchase one share of common stock (each, a “Class A Warrant” and collectively, the “Class A Warrants”) and one Class B common warrant to purchase one share of common stock (each, a “Class B Warrant” and collectively, the “Class B Warrants”) at a purchase price of $0.17 per Common Unit, pursuant to this prospectus supplement and the accompanying prospectus. Each share exercisable pursuant to the Class A Warrants will have an exercise price per share of $0.17, equal to 100% of the public offering price per Common Unit in this offering, and each share exercisable pursuant to the Class B Warrants will have an exercise price per share of $0.27, equal to approximately 159% of the public offering price per Common Unit in this offering. This prospectus supplement also relates to the offering of the shares of our common stock issuable upon exercise of the Class A Warrants and Class B Warrants issued in this offering.

 

The Class A Warrants will be exercisable commencing on the date on which an increase of the Company’s authorized shares has been implemented (“initial exercise date”) and will expire on the 5th anniversary of the initial exercise date, and the Class B Warrants will be immediately exercisable and will expire on the 5th anniversary of the original issuance date. The Common Units have no stand-alone rights and will not be certificated or issued as stand-alone securities. The shares of common stock, the Class A Warrants and Class B Warrants, can only be purchased together in this offering but will be issued separately and will be immediately separable upon issuance.

 

We are also offering the pre-funded units (each, a “Pre-Funded Unit”, collectively, the “Pre-Funded Units”), each consisting of one pre-funded warrant, one Class A Warrant, and one Class B Warrant, to those purchasers whose purchase of Common Unit in this offering would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or at the election of the purchaser, 9.99%) of our shares of common stock immediately following the consummation of this offering. Each Pre-Funded Unit will be sold at a purchase price of $0.1699 per Pre-Funded Unit, which is equal to the price per Common Unit being sold to the public in this offering, minus $0.0001, and the exercise price of each pre-funded warrant will equal $0.0001 per share. The pre-funded warrants are immediately exercisable and may be exercised at any time until all of the pre-funded warrant are exercised in full at an exercise price of $0.0001 per share. This prospectus supplement also relates to the offering of the shares of our common stock issuable upon exercise of the pre-funded warrant issued in this offering.

 

 

 

 

For a more detailed description of the Common Units and the Pre-Funded Units, see the section entitled “Description of Our Securities We Are Offering” beginning on page S-19.

 

We have engaged Maxim Group LLC (the “Placement Agent”) to act as our placement agent in connection with this offering. The Placement Agent has agreed to use their reasonable best efforts to arrange for the sale of the securities offered by this prospectus. The Placement Agent is not purchasing or selling any of the securities we are offering, and the Placement Agent is not required to arrange the purchase or sale of any specific number or dollar amount of securities. We have agreed to pay to the Placement Agent the placement agent fees set forth in the table below, which assumes that we sell all of the securities offered by this prospectus. We will bear all costs associated with the offering. See “Plan of Distribution” beginning on page S-24 of this prospectus for more information regarding these arrangements.

 

Our common stock, par value $0.001 per share, is currently listed on the Nasdaq Capital Market under the symbol “GGE”. On December 11, 2023, the closing sale price of our shares of common stock was $0.152 per share. There is no established public trading market for the Class A Warrants, the Class B Warrants or the Pre-Funded Warrants and we do not expect a market to develop. Without an active trading market, the liquidity of the Class A Warrants, the Class B Warrants and the Pre-Funded Warrants will be limited. In addition, we do not intend to list the Class A Warrants, the Class B Warrants or the Pre-Funded Warrants on the Nasdaq Capital Market, any other national securities exchange or any other trading system.

 

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

 

Investing in securities involves certain risks. See “Risk Factors” beginning on page 6 of this prospectus and in the applicable prospectus supplement, as updated in our future filings made with the Securities and Exchange Commission (the “SEC”) that are incorporated by reference into this prospectus. You should carefully read and consider these risk factors before you invest in our securities.

 

Unless otherwise stated, as used in this prospectus, the terms “Green Giant” “we,” “us,” “our Company,” and the “Company” refer to Green Giant Inc., a holding company incorporated under the laws of the state of Florida; the term “HGS Investment” refers to China HGS Investment Inc., a corporation incorporated under the laws of the state of Delaware and our direct wholly owned subsidiary; the terms “Shaanxi HGS” or “our PRC subsidiary” refer to Shannxi HGS Management Consulting Co., Ltd, a limited liability company organized under the laws of the PRC and our indirect wholly owned subsidiary; the terms the “VIE” or the “Guangsha” refer to Shaanxi Guangsha Investment and Development Group Co., Ltd.

 

We are a holding company incorporated in the state of Florida and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations through our subsidiaries in China and the U.S. and the VIE in China. For accounting purposes, we control and receive the economic benefits of the VIE through certain contractual arrangements (the “VIE Agreements”), which enable us to consolidate the financial results of the VIEs in our consolidated financial statements under generally accepted accounting principles in the U.S. (“U.S. GAAP”), and the structure involves unique risks to investors. Our shares of common stock offered in this offering are shares of Green Giant Inc., the holding company in the state of Florida, instead of shares of our subsidiaries or the VIE in China. The VIE structure provides contractual exposure to foreign investment in China-based companies. Chinese law, however, does not prohibit direct foreign investment in the VIE. As a result of our use of the VIE structure, you may never directly hold equity interests in the VIE.

 

 

 

 

Because we do not directly hold equity interests in the VIE, we are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations, including but not limited to, regulatory review of overseas listing of PRC companies through special purpose vehicles and the validity and enforcement of the VIE Agreements. We are also subject to the risks and uncertainties about any future actions of the PRC government in this regard that could disallow the VIE structure, which would likely result in a material change in our operations, and the value of our securities may depreciate significantly or become worthless. The VIE Agreements have not been tested in a court of law in China as of the date of this prospectus. See “Item 1A. Risk Factors—Risks Relating to Our Corporate Structure” in the 2022 annual report.

 

We are subject to certain legal and operational risks associated with having the majority of our operations in China, which could cause the value of our securities to significantly decline or become worthless. PRC laws and regulations governing our business operations in mainland China are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of the VIE, significant depreciation or a complete loss of the value of our securities, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this prospectus, we, our PRC subsidiary, and the VIE have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed by our PRC counsel, Zhejiang Taihang Law Firm (“Taihang Law Firm”), we are not subject to cybersecurity review with the Cyberspace Administration of China, or the “CAC,” under the Cybersecurity Review Measures that became effective on February 15, 2022, since we currently do not have over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject us to the Cybersecurity Review Measures; we are also not subject to network data security review by the CAC if the Draft Regulations on the Network Data Security Administration (Draft for Comments) (the “Security Administration Draft”) are enacted as proposed, since we currently do not have over one million users’ personal information and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million users’ personal information or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the Security Administration Draft.

 

On February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the “Trial Measures,” and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, this offering is considered as an indirect offering, and the filing shall be made within 3 working days after this offering is completed. See “Risk Factors—The Opinions, the Trial Measures, and the revised Provisions recently issued by PRC authorities may subject us to additional compliance requirements in the future.” Notwithstanding the foregoing, as of the date of this prospectus, according to Taihang Law Firm, no relevant PRC laws or regulations in effect require that we obtain permission from any PRC authorities to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction, or any regulatory objection to this offering from the CSRC, the CAC, or any other PRC authorities that have jurisdiction over our operations. Since these statements and regulatory actions are newly published, however, official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries and the VIE, our ability to accept foreign investments, and our listing on a U.S. exchange. The Standing Committee of the National People’s Congress (the “SCNPC”) or PRC regulatory authorities may in the future promulgate additional laws, regulations, or implementing rules that require us, our subsidiaries, or the VIE to obtain regulatory approval from Chinese authorities before listing in the U.S. If we do not receive or maintain such approval, or inadvertently conclude that such approval is not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future, we may be subject to an investigation by competent regulators, fines or penalties, or an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our operations and the value of our common stock, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

 

 

 

 

In addition, our common stock may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the “HFCA Act”) if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditors for three consecutive years beginning in 2021. Our auditor, OneStop Assurance PAC (“OneStop”), headquartered in Singapore, is not among the PCAOB registered public accounting firms registered in mainland China or Hong Kong that are subject to PCAOB’s determination on December 16, 2021. If trading in our common stock 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 common stock and trading in common stock could be prohibited. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring 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, thus reducing the time period for triggering the prohibition on trading. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of Protocol (the “Protocol”), governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the U.S. Securities and Exchange Commission (the “SEC”), the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination.

 

As of the date of this prospectus, our Company, our subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements. Our Company, our subsidiaries, and the VIE do not have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable future. As of the date of this prospectus, none of our subsidiaries or the VIE have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid or any assets will be transferred in the foreseeable future. If we determine to pay dividends on any of our shares of common stock in the future, as a holding company, we will depend on receipt of funds from our subsidiaries and from the VIE to our PRC subsidiary in accordance with the VIE Agreements.

 

As of the date of this prospectus, the VIE has not remitted any services fees to WFOE. However, the VIE is obligated to pay a service fee equivalent to 100% of VIE’s net income after deduction of certain tax and operational expenses. As of the date of this prospectus, none of our subsidiaries or the VIE have made any dividends or distributions to us and we has not made any dividends or distributions to our shareholders.

 

To the extent cash in the business is in the PRC, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government to transfer cash. Our management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies and procedures among our departments and the operating entities. Each department or operating entity initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to designated management members of our Company, based on the amount and the use of cash requested. The designated management member examines and approves the allocation of cash based on the sources of cash and the priorities of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred nor a written policy that addresses how we will handle any limitations on cash transfers due to PRC law.

 

   Per
Common
Unit
   Per
Pre-Funded
Unit
   Total 
Public Offering Price  $0.17   $0.1699   $5,948,647.0585 
Placement agent fees  $0.0119   $0.011893   $416,405.294595 
Proceeds, before expenses, to us  $0.1581   $0.158007   $5,532,241.763905 

 

(1) See “Plan of Distribution” beginning on page S-24 of this prospectus supplement for additional disclosure regarding compensation payable to the Placement Agent.

 

We expect to deliver the securities to the investors in book-entry form through the facilities of The Depository Trust Company on or about December 14, 2023.

 

Placement Agent

 

MAXIM GROUP LLC

 

The date of this prospectus supplement is December 12, 2023

 

 

 

 

TABLE OF CONTENTS

 

Prospectus Supplement

 

ABOUT THIS PROSPECTUS SUPPLEMENT S-ii
CONVENTIONS THAT APPLY TO THIS PROSPECTUS SUPPLEMENT S-iii
PROSPECTUS SUPPLEMENT SUMMARY S-1
THE OFFERING S-7
RISK FACTORS S-9
USE OF PROCEEDS S-17
CAPITALIZATION S-17
DILUTION S-18
DESCRIPTION OF SECURITIES WE ARE OFFERING S-19
PLAN OF DISTRIBUTION S-24
ENFORCEABILITY OF CIVIL LIABILITIES S-27
LEGAL MATTERS S-28
EXPERTS S-28
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE S-28
WHERE YOU CAN FIND MORE INFORMATION S-29

 

Prospectus

 

ABOUT THIS PROSPECTUS ii
CONVENTIONS THAT APPLY TO THIS PROSPECTUS iii
PROSPECTUS SUMMARY 1
RISK FACTORS 6
USE OF PROCEEDS 10
DILUTION 10
DESCRIPTION OF SECURITIES TO BE REGISTERED 11
PLAN OF DISTRIBUTION 20
ENFORCEABILITY OF CIVIL LIABILITIES 22
LEGAL MATTERS 23
EXPERTS 23
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 23
WHERE YOU CAN FIND MORE INFORMATION 24

 

This prospectus supplement is not an offer to sell or a solicitation of an offer to buy these securities by anyone in any jurisdiction in which such offer or solicitation is not authorized, or in which the person is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

 

We have not authorized anyone to give any information or make any representation about us that is different from, or in addition to, that contained in this prospectus supplement and the accompanying prospectus, including in any of the materials that we have incorporated by reference into this prospectus supplement and the accompanying prospectus, and any free writing prospectus prepared or authorized by us. Therefore, if anyone does give you information of this sort, you should not rely on it as authorized by us. You should rely only on the information contained or incorporated by reference in this prospectus and any accompanying prospectus supplement.

 

You should not assume that the information contained in this prospectus supplement and the accompanying prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus supplement and the accompanying prospectus is delivered or securities are sold on a later date. Neither the delivery of this prospectus supplement and the accompanying prospectus, nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in our affairs since the date hereof or that the information incorporated by reference herein is correct as of any time subsequent to the date of such information.

 

S-i

 

 

ABOUT THIS PROSPECTUS SUPPLEMENT

 

On March 7, 2023, we filed a registration statement on Form S-3, as amended, (File No. 333-270324) with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. The registration statement on Form S-3 was declared effective on May 2, 2023. Under this shelf registration process, we may offer from time to time securities having a maximum aggregate amount of $500,000,000.

 

This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference into the prospectus. The second part, the accompanying prospectus, gives more general information, some of which does not apply to this offering. You should read this entire prospectus supplement as well as the accompanying prospectus and the documents incorporated by reference that are described under “Where You Can Find More Information” in this prospectus supplement and the accompanying prospectus.

 

If the description of the offering varies between this prospectus supplement and the accompanying prospectus, you should rely on the information contained in this prospectus supplement. However, if any statement in one of these documents is inconsistent with a statement in another document having a later date – for example, a document incorporated by reference in this prospectus supplement and the accompanying prospectus – the statement in the document having the later date modifies or supersedes the earlier statement. Except as specifically stated, we are not incorporating by reference any information submitted under Item 2.02 or Item 7.01 of any Current Report on Form 8-K into any filing under the Securities Act or the Securities Exchange Act of 1934, as amended, or the Exchange Act, into this prospectus supplement or the accompanying prospectus.

 

Any statement contained in a document incorporated by reference, or deemed to be incorporated by reference, into this prospectus supplement or the accompanying prospectus will be deemed to be modified or superseded for purposes of this prospectus supplement or the accompanying prospectus to the extent that a statement contained herein, therein or in any other subsequently filed document which also is incorporated by reference in this prospectus supplement or the accompanying prospectus modifies or supersedes that statement. Any such statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement or the accompanying prospectus.

 

We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus supplement and the accompanying prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you unless you are a party to such agreement. Moreover, such representations, warranties or covenants were accurate only as of the date when made or expressly referenced therein. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs unless you are a party to such agreement.

 

Prior to making a decision about investing in our securities, you should carefully consider the specific risk factors discussed in this prospectus, and the risk factors contained in our annual report on Form 10-K for the fiscal year ended September 30, 2022 under the heading “Item 1A. Risk Factors,” and as described or may be described in any subsequent quarterly report on Form 10-Q under the heading “Item 1A. Risk Factors,” as well as in any applicable prospectus supplement and contained or to be contained in our filings with the SEC and incorporated by reference in this prospectus, together with all of the other information contained in this prospectus, or any applicable prospectus supplement. For a description of these reports and documents, and information about where you can find them, see “Where You Can Find More Information” and “Incorporation of Documents by Reference.” If any of the risks or uncertainties described in our SEC filings or any prospectus supplement or any additional risks and uncertainties actually occur, our business, financial condition and results of operations could be materially and adversely affected, and the trading price of our securities could decline and you might lose all or part of the value of your investment.

 

You should not assume that the information contained in this prospectus supplement and the accompanying prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information that has been incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus supplement and the accompanying prospectus to this prospectus is delivered or securities are sold on a later date. Neither the delivery of this prospectus supplement and the accompanying prospectus, nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in our affairs since the date hereof or that the information incorporated by reference herein is correct as of any time subsequent to the date of such information.

 

S-ii

 

 

CONVENTIONS THAT APPLY TO THIS PROSPECTUS SUPPLEMENT

 

Unless otherwise indicated or the context otherwise requires, references in this prospectus supplement and the accompanying prospectus to:

 

  “China” and “the PRC” refer to the People’s Republic of China, including the special administrative regions of Hong Kong and Macau, unless referencing specific laws and regulations adopted by the PRC and other legal or tax matters only applicable to mainland China, and excluding, for purpose of this prospectus only, Taiwan;
     
  “Green Giant” “we,” “us,” “our Company,” and the “Company” refer to Green Giant Inc., a holding company incorporated under the laws of the state of Florida and formerly known as China HGS Real Estate Inc.;
     
  “Green Giant DE” refers to Green Giant Ltd., a Delaware limited liability company and our direct wholly owned subsidiary;
     
  “Green Giant Energy” refers to Green Giant Energy Texas Inc., a corporation incorporated under the laws of the state of Texas and our indirect wholly owned subsidiary;
     
  “Green Giant HK” refers to Green Giant International Limited, a company incorporated in Hong Kong and our indirect wholly owned subsidiary;
     
  “HGS Investment” refers to China HGS Investment Inc., a corporation incorporated under the laws of the state of Delaware and our direct wholly owned subsidiary;
     
  “RMB” are to the Renminbi, the legal currency of mainland China;
     
  “Shaanxi HGS” or “our PRC subsidiary” refer to Shannxi HGS Management Consulting Co., Ltd, a limited liability company organized under the laws of the PRC and our indirect wholly owned subsidiary;
     
  the “VIE” or the “Guangsha” refer to Shaanxi Guangsha Investment and Development Group Co., Ltd.
     
  “US$,” “$”, “dollars” and “U.S. dollars” are to the legal currency of the United States.

 

Unless otherwise noted, all currency figures in this filing are in U.S. dollars.

 

Our reporting currency is U.S. Dollars. This prospectus supplement and the accompanying prospectus also contains translations of certain foreign currency amounts into U.S. dollars for the convenience of the reader. Unless otherwise stated, all translations of RMB into U.S. dollars were made at RMB 7.1135 and RMB 6.4434 to US$1.00, the exchange rates set forth in the H.10 statistical release of the Federal Reserve Board on September 30, 2022 and September 30, 2021, respectively. We make no representation that the RMB or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all. As of December 30, 2022, the translations of RMB into U.S. dollars were made at RMB 6.8972 to US$1.00.

 

S-iii

 

 

PROSPECTUS SUPPLEMENT SUMMARY

 

The following summary highlights selected information contained or incorporated by reference in this prospectus supplement. This summary does not contain all of the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus and any supplement hereto carefully, including the risk factors section as well as the financial statements and the notes to the financial statements incorporated herein by reference.

 

Forward-Looking Statements

 

Some of the statements contained or incorporated by reference in this prospectus may be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act and may involve material risks, assumptions and uncertainties. Forward-looking statements typically are identified by the use of terms such as “may,” “will,” “should,” “believe,” “might,” “expect,” “anticipate,” “intend,” “plan,” “estimate” and similar words, although some forward-looking statements are expressed differently.

 

Although we believe that the expectations reflected in such forward-looking statements are reasonable, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict and which may cause actual outcomes and results to differ materially from what is expressed or forecasted in such forward-looking statements. These forward-looking statements speak only as of the date on which they are made and except as required by law, we undertake no obligation to publicly release the results of any revision or update of these forward-looking statements, whether as a result of new information, future events or otherwise. If we do update or correct one or more forward-looking statements, you should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from our forward-looking statements is included in our periodic reports filed with the SEC and in the “Risk Factors” section of this prospectus.

 

The Company

 

Corporate History and Structure

 

Green Giant Inc. (formerly China HGS Real Estate Inc.), is a corporation organized under the laws of the State of Florida.

 

China HGS Investment Inc. is a Delaware corporation and owns 100% of the equity interest in Shaanxi HGS Management and Consulting Co., Ltd. (“Shaanxi HGS”), a wholly owned foreign entity incorporated under the laws of the People’s Republic of China (“PRC” or “China”).

 

GGE does not conduct any substantive operations of its own. Instead, through its subsidiary, Shaanxi HGS, it entered into certain exclusive contractual agreements with Shaanxi Guangsha Investment and Development Group Co., Ltd. (“Guangsha”). Pursuant to these agreements, Shaanxi HGS is obligated to absorb a majority of the risk of loss from Guangsha’s activities and entitles Shaanxi HGS to receive a majority of Guangsha’s expected residual returns. In addition, Guangsha’s shareholders have pledged their equity interest in Guangsha to Shaanxi HGS, irrevocably granted Shaanxi HGS an exclusive option to purchase, to the extent permitted under PRC Law, all or part of the equity interests in Guangsha and agreed to entrust all the rights to exercise their voting power to the person(s) appointed by Shaanxi HGS.

 

Guangsha was organized in August 1995 as a limited liability company under the laws of the PRC. Guangsha is headquartered in the city of Hanzhong, Shaanxi Province. Guangsha is engaged in developing large scale and high quality commercial and residential projects, including multi-layer apartment buildings, sub-high-rise apartment buildings, high-rise apartment buildings, and office buildings.

 

On November 29, 2021, Green Giant Ltd. was incorporated in Delaware.

 

 

S-1

 

 

Green Giant Energy Texas Inc. was incorporated in Texas on October 3, 2022 which is a wholly owned subsidiary of Green Giant Ltd.

 

Green Giant International Limited (Hong Kong) was incorporated in Hong Kong on December 9, 2021 as a wholly owned subsidiary of Green Giant Ltd.

 

The diagram below illustrates our current corporate structure:

 

 

Our shares of common stock offered in this offering are shares of Green Giant Inc., the holding company in the state of Florida, instead of shares of our subsidiaries or the VIE in China. The VIE structure provides contractual exposure to foreign investment in China-based companies. Chinese law, however, does not prohibit direct foreign investment in the VIE. As a result of our use of the VIE structure, you may never directly hold equity interests in the VIE.

 

Our Business

 

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

 

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

 

Currently, we are operating our real estate development business in Hanzhong, a prefecture-level city in Shaanxi Province, and Yang County, a county in Hanzhong. We have focused on expanding our business in Tier 3 and Tier 4 cities and counties in China that we strategically select based on population and urbanization growth rates, general economic conditions and growth rates, income and purchasing power of resident consumers, anticipated demand for private residential properties, availability of future land supply and land prices, and governmental urban planning and development policies. Initially, these Tier 3 and Tier 4 cities and counties will be located in the Shaanxi province, China. We utilize a standardized and scalable model that emphasizes rapid asset turnover, efficient capital management and strict cost control. The expansion into strategically selected Tier 3 and Tier 4 cities and counties with real estate development potential in Shaanxi Province is expected to benefit from rising demand for residential housing as a result of increasing income levels of consumers and growing populations in these cities and counties due to urbanization.

 

In September 2020, the Company started land leveling and construction processes for the Oriental Garden Phase II and Liangzhou Mansion real estate properties in the Liangzhou Road related projects. The Company started the construction of the Liangzhou Road related projects, which consist of residential buildings, office buildings and a commercial plaza, after the approval by the local government of the road. Upon completion, the Liangzhou Road related projects will become a new city center of Hanzhong city.

 

S-2

 

 

Since November 2022, the Company started to explore the possibility of entering into the green energy sector in the U.S. As the usage of electric vehicles and other battery-powered technologies surges, the demand for batteries correspondingly rises. This growth cycle presents both a challenge and an opportunity when these batteries reach their end-of-life stage. Our solution to this challenge lies in our innovative battery recycling process. We have been searching for the warehouse for our battery recycling production. During the recycling process, valuable metal such as lithium, nickel, and cobalt are extracted from the used batteries. These metals are then converted into lead ingots and blocks. The global market for these metals is dynamic, with prices fluctuating in response to the constantly changing supply and demand. We have started trading metal, the end-product of battery recycling, in April 2023, to leverage the fluctuation in their prices.

 

Recent Developments

 

Shareholder Meeting

 

The Company has agreed to hold a meeting of shareholders (which may also be at the annual meeting of shareholders) at the earliest practical date after the date hereof. The Company has agreed to file a definitive proxy statement for such meeting of shareholders within ninety (90) days of the closing date of the offering to which this prospectus supplement relates (the “Filing Date”) and to hold such meeting of shareholders no later than one hundred and twenty (120) days after such closing date (the “Meeting Requirement Date”), for the purpose of obtaining the requisite approval of its shareholders of either (A) the proposals (i) to approve the merger of the Company with GGE BVI whereby the Company will be redomiciled to the British Virgin Islands (the “Redomicile Merger”) and (ii) to adopt the Memorandum and Articles of Association of GGE BVI (the “BVI Capital Increase”) pursuant to which GGE BVI will be authorized to issue an unlimited number of Class A ordinary shares, no par value, and 50,000,000 Class B ordinary shares, par value US$0.0001 per share, (collectively, the “BVI Merger Shareholder Approvals”) or, (B), to adopt a proposal to amend the Articles of Incorporation, as amended, of the Company pursuant to which the Company will be authorized to issue 1,000,000,000 shares of Common Stock (the “Capital Increase Shareholder Approval”). If the Company does not obtain either the BVI Merger Shareholder Approvals or the Capital Increase Shareholder Approval at the first meeting of shareholders, the Company shall call a meeting of its shareholders every four months thereafter to seek the either the BVI Merger Shareholder Approvals or the Capital Increase Shareholder Approval until the earlier of the date that the BVI Merger Shareholder Approvals or the Capital Increase Shareholder Approval is obtained or the Warrants issued in this offering are no longer outstanding. If: (i) the definitive proxy is not filed on or prior to the Filing Date, or (ii) the Capital Increase Shareholder Approval is not obtained and deemed effective on or before the Meeting Requirement Date (any such failure or breach being referred to as an “Event”, and the date on which such Event occurs, an “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 3.0% multiplied by the sum of the aggregate Subscription Amount and aggregate Warrant Exercise Price (whether or not exercised) applicable such Holder. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event.

 

Termination and Settlement Agreement with Spartan Capital Securities LLC

 

On June 15, 2023, the Company and Spartan Capital Securities LLC (“Spartan”) entered into certain financial advisory agreement (the “Financial Advisory Agreement”), pursuant to which Spartan will serve as the exclusive lead underwriter, financial advisor, deal manager, sole book running manager, placement agent and/or investment banker for the Company in connection with any public or private offerings and debt offering, including all equity linked financings and any financing during the term of the Financial Advisory Agreement.

 

On December 5, 2023, the Company entered into certain termination and settlement agreement with Spartan (the “Termination Agreement”), pursuant to which Spartan agreed to waive all claims and liabilities against the Company in connection with the Financial Advisory Agreement for a one-time lump sum payment of the greater of (i) 1.50% of the gross proceeds raised in this offering and (ii) $75,000 (the “Settlement Payment”).

 

Risks Associated with our Corporate Structure and VIE Agreements

 

As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our subsidiaries established in China and the U.S. and the VIE in China. For accounting purposes, we control and receive the economic benefits of the VIE through the VIE Agreements, which enable us to consolidate the financial results of the VIE in our consolidated financial statements under U.S. GAAP, and the structure involves unique risks to investors. Our securities offered in this prospectus are securities of our Florida holding company, instead of securities of our subsidiary or the VIE in China. The VIE structure provides contractual exposure to foreign investment in China-based companies. Chinese law, however, does not prohibit direct foreign investment in the VIE. As a result of our use of the VIE structure, you may never directly hold equity interests in the VIE. Because we do not directly hold equity interests in the VIE, we are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations, including but not limited to, regulatory review of overseas listing of PRC companies through special purpose vehicles and the validity and enforcement of the VIE Agreements. We are also subject to the risks and uncertainties about any future actions of the PRC government in this regard that could disallow the VIE structure, which would likely result in a material change in our operations, and the value of our shares of common stock may depreciate significantly or become worthless. The VIE Agreements have not been tested in a court of law in China as of the date of this prospectus.

 

S-3

 

 

The VIE Agreements may not be as effective as direct ownership in providing operational control. For instance, the VIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. The VIE’s shareholders may not act in the best interests of our Company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through the VIE Agreements. In the event that the VIE or its shareholders fail to perform their respective obligations under the VIE Agreements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. In addition, even if legal actions are taken to enforce such arrangements, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the U.S. or any state.

 

We are subject to certain legal and operational risks associated with having the majority of our operations in China, which could cause the value of our securities to significantly decline or become worthless. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of the VIE, significant depreciation or a complete loss of the value of our shares of common stock, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this prospectus, we, our PRC subsidiary, and the VIE have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed by our PRC counsel, Taihang Law Firm, we are not subject to cybersecurity review with the CAC, under the Cybersecurity Review Measures that became effective on February 15, 2022, since we currently do not have over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject us to the Cybersecurity Review Measures; we are also not subject to network data security review by the CAC if the Security Administration Draft is enacted as proposed, since we currently do not have over one million users’ personal information and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million users’ personal information or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the Security Administration Draft. According to our PRC counsel, no relevant laws or regulations in the PRC explicitly require us to seek approval from the China Securities Regulatory Commission for our overseas listing plan. As of the date of this prospectus, we, our PRC subsidiary, and the VIE have not received any inquiry, notice, warning, or sanctions regarding our planned overseas listing from the China Securities Regulatory Commission or any other PRC governmental authorities. Since these statements and regulatory actions are newly published, however, official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our PRC subsidiary and the VIE, our ability to accept foreign investments, and our listing on a U.S. exchange. The SCNPC or PRC regulatory authorities may in the future promulgate laws, regulations, or implementing rules that require us, our PRC subsidiary, or the VIE to obtain regulatory approval from Chinese authorities before listing in the U.S.

 

Furthermore, pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, the Public Company Accounting Oversight Board, or the PCAOB, issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations. Our auditor, OneStop Assurance PAC, is headquartered in Singapore, not mainland China or Hong Kong, therefore is not subject to the determinations announced by the PCAOB on December 16, 2021 relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong Kong because of a position taken by one or more authorities in the PRC or Hong Kong. If trading in our common stock 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 common stock and trading in our common stock could be prohibited. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring 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, thus reducing the time period for triggering the prohibition on trading. On August 26, 2022, the China Securities Regulatory Commission, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of Protocol (the “Protocol”), governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the U.S. Securities and Exchange Commission (the “SEC”), the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination.

 

S-4

 

 

Dividend Policy and Asset Transfers Between Our Company, Our Subsidiaries, and the VIE

 

As of the date of this prospectus, our Company, our subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements. Our Company, our subsidiaries, and the VIE do not have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable future.

 

Our management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies and procedures among our departments and the operating entities. Each department or operating entity initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to designated management members of our Company, based on the amount and the use of cash requested. The designated management member examines and approves the allocation of cash based on the sources of cash and the priorities of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred nor a written policy that addresses how we will handle any limitations on cash transfers due to PRC law.

 

We intend to retain all of our available funds and any future earnings to fund the development and growth of our business. As such, we do not expect to pay any cash dividends in the foreseeable future. We are permitted under PRC laws and regulations to provide funding to our PRC subsidiary only through loans or capital contributions, and only if we satisfy the applicable government registration and approval requirements.

 

Our PRC subsidiary is permitted to pay dividends only out of their retained earnings. However, our PRC subsidiary is required to set aside at least 10% of its after-tax profits each year, after making up for previous year’s accumulated losses, if any, to fund certain statutory reserves, until the aggregate amount of such funds reaches 50% of registered capital. This portion of our PRC subsidiary’s respective net assets are prohibited from being distributed to their shareholders as dividends. However, our PRC subsidiary has not made any dividends or distributions to our holding company or any U.S. investors as of the date of this prospectus

 

In addition, the PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders.

 

A 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises. Any gain realized on the transfer of common stock by such investors is also subject to PRC tax at a current rate of 10%, which in case of dividends will be withheld at source if such gain is regarded as income derived from sources within the PRC.

 

S-5

 

 

Permissions under Hong Kong Law and the PRC Law

 

In order to operate our business activities as currently conducted in China, each of our PRC subsidiaries is required to obtain a business license from the State Administration for Market Regulation (“SAMR”). As of the date of this prospectus, our PRC subsidiary and the VIE has obtained a valid business license from the SAMR and no application for any such license has been denied.

 

Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, 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. 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 an announcement 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 28, 2021, Cybersecurity Review Measures was published by Cyberspace Administration of China or the CAC, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s Bank of China, State Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and State Cryptography Administration, effective on February 15, 2022, which provides that, Critical Information Infrastructure Operators (“CIIOs”) that purchase internet products and services and Online Platform Operators engaging in data processing activities that affect or may affect national security shall be subject to the cybersecurity review by the Cybersecurity Review Office. On November 14, 2021, CAC published the Administration Measures for Cyber Data Security (Draft for Public Comments), or the “Cyber Data Security Measure (Draft)”, which requires cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of Cybersecurity Review. On April 2, 2022, the CSRC released the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which provide that a domestic company that seeks to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations, enhance legal awareness of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system, and take necessary measures to fulfill confidentiality and archives administration obligations. On July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1 million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st of the previous year and ; and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the CAC.

 

On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the “New Overseas Listing Rules”) with five interpretive guidelines, which came into effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises, directly or indirectly issues and lists securities overseas, to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offering, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary listing or dual major listing of issuers already listed overseas. According to the Notice on Arrangements for Overseas Securities Offering and Listing by Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has already completed overseas listing or (ii) has already obtained the approval for the offering or listing from overseas securities regulators or exchanges but has not completed such offering or listing before effective date of the new rules and also completes the offering or listing before September 30, 2023 will be considered as an existing listed company and is not required to make any filing until it conducts a new offering in the future. For the company that has already submitted offering and listing applications but not yet obtained the approvals from overseas securities regulators or exchanges shall choose to make its filing with the CSRC at a reasonable time but before the completion of the offering/listing. For the company that has already obtained CSRC approval for overseas listing or offering can continue its process during the valid term of the CSRC approval without additional filing and it shall make the filing pursuant to the new rules if it does not complete the offering or listing before the expiration of the original approval from CSRC. Furthermore, upon the occurrence of any of the material events specified below after an issuer has completed its offering and listed its securities on an overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 working days after the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other competent authorities; (iii) change of listing status or transfer of listing segment; or (iv) voluntary or mandatory delisting. As of the date of this prospectus, these new laws and guidelines have not impacted the Company’s ability to conduct its business, accept foreign investments, or list and trade on a U.S. or other foreign exchange; however, there are uncertainties in the interpretation and enforcement of these new laws and guidelines, which could materially and adversely impact our business and financial outlook and may impact our ability to accept foreign investments or continue to list on a U.S. or other foreign exchange. Any change in foreign investment regulations, and other policies in China or related enforcement actions by China government could result in a material change in our operations and the value of our securities and could significantly limit or completely hinder our ability to offer our securities to investors or cause the value of our securities to significantly decline or be worthless.

 

S-6

 

 

THE OFFERING

 

Issuer:   Green Giant, Inc.
     
Securities offered by us  

21,470,585 Common Units, each consisting of one share of common stock, one Class A Warrant, and one Class B Warrant at a purchase price per Common Unit of $0.17, and/or

 

13,529,415 Pre-Funded Units, each consisting of one pre-funded warrant, one Class A Warrant, and one Class B Warrant at a purchase price per Pre-Funded Unit of $0.1699.

 

We are offering Pre-Funded Units to such purchasers in lieu of Common Units that would otherwise result in such purchasers’ beneficial ownership exceeding 4.99% (or at the election of the purchaser, 9.99%) of our outstanding shares of common stock..

     
Pre-funded warrants included in the Pre-Funded Warrants offered by us pursuant to this prospectus supplement:   Each pre-funded warrant will be exercisable immediately upon issuance and will not expire. This prospectus supplement also relates to the offering of the common stock issuable upon exercise of such pre-funded warrants. See “Description of Securities We are Offering” for a discussion on the terms of the Pre-Funded Warrants.
     
Class A Warrants included in the Units offered by us pursuant to this prospectus supplement:   Up to 35,000,000 Class A Warrants to purchase shares of common stock. The initial exercise price per share pursuant to the Class A Warrants is $0.17 (or 100% of the public offering price per Common Unit sold in this offering). The Class A Warrants are immediately separable and will be issued separately in this offering. The Class A Warrants will be exercisable commencing on the date on which an increase of the Company’s authorized shares has been implemented (the “initial exercise date”) and will expire on the 5th anniversary of the initial exercise date. The Class A Warrants may be exercised only for a whole number of shares. No fractional shares will be issued upon exercise of the Class A Warrants. This prospectus supplement also relates to the offering of the common stock issuable upon exercise of the Class A Warrants.
     
Class B Warrants included in the Units offered by us pursuant to this prospectus supplement:   Up to 109,763,314 Class B Warrants to purchase shares of common stock. The initial exercise price per share pursuant to the Class B Warrants is $0.27 (or approximately 159% of the public offering price per Common Unit sold in this offering). The Class B Warrants are immediately separable and will be issued separately in this offering. The Class B Warrants will be immediately exercisable and will expire on the 5th anniversary of the original issuance date. The Class B Warrants may be exercised only for a whole number of shares. No fractional shares will be issued upon exercise of the Class B Warrants. This prospectus supplement also relates to the offering of the shares of common stock issuable upon exercise of the Class B Warrants.

 

S-7

 

 

Cashless exercise of Pre-Funded Warrants, Class A Warrants and Class B Warrants  

If, at the time a holder exercises Pre-Funded Warrants, Class A Warrants or Class B Warrants, a registration statement registering the issuance or resale of the shares of common stock underlying Pre-Funded Warrants, Class A Warrants or Class B Warrants under the Securities Act is not then effective or available for the issuance of such shares of common stock, then in lieu of making the cash payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the Pre-Funded Warrants, Class A Warrants or Class B Warrants.

 

In addition to the rights with respect to cashless exercise set forth above, the Class B Warrants holder may, at any time and in its sole discretion, exercise Class B Warrants in whole by means of an “alternative cashless exercise” in which the holder shall be entitled to receive a number of shares of common stock equal to the quotient obtained by dividing (the exercise price minus the lowest VWAP (as defined in the Class B Warrants) of the shares of common to cover the 10 trading days immediately prior to the exercise date) by (70% of the lowest VWAP of the shares of common stock to cover the 10 trading days immediately prior to the exercise date (“Market Price”)). If at any time prior to obtaining the BVI Merger Shareholder Approvals or the Capital Increase Shareholder Approval and implementing an increase in its authorized shares (“Authorized Share Increase Date”), the Company receives a notice of exercise for an alternative cashless exercise under the Class B Warrant and the Market Price as to such notice of exercise is less than $0.0845, and when aggregated with any warrant shares previously issued upon a cash or cashless exercise hereunder, exceeds such Class B Warrant holder’s pro-rata share of 110 million shares (based on the Class B Warrant holder’s original subscription amount under the securities purchase agreement and subject to adjustment), then the Class B Warrant shall not be exercisable in excess of such amount until the Authorized Share Increase Date.

     
Reasonable Best Efforts Offering   We have retained the Placement Agent to assist us in soliciting offers to purchase the securities offered by the prospectus supplement and the accompanying prospectus n a reasonable best efforts basis. The Placement Agent is not required to buy or sell any specific number or dollar amount of the securities offered hereby. See “Plan of Distribution” beginning on page S-24 of this prospectus.
     
Shares of common stock outstanding prior to this offering:   64,162,258 shares
     
Shares of common stock to be outstanding immediately after this offering (1):  

85,632,843 shares, assuming no exercise of any Pre-funded Warrants, Class A Warrants and Class B Warrants issued in this offering.

     
Use of proceeds:   We expect the aggregate net proceeds from the offering will be approximately $5.26million, after deducting placement agent fees and estimated offering expenses payable by us. We intend to use the net proceeds from this offering for working capital and other general corporate purposes. See “Use of Proceeds” on page S-17 of this prospectus supplement.

 

Transfer agent:   The transfer agent and registrar for our common stock is Securities Transfer Corporation, 2901 N. Dallas Parkway, Suite 380, Plano, Texas 75093.
     
Risk factors:   Investing in our securities involves a high degree of risk. For a discussion of factors you should consider carefully before deciding to invest in our shares of common stock, see the information contained in or incorporated by reference under the heading “Risk Factors” beginning on page S-9 of this prospectus supplement, on page 6 of the accompanying prospectus, and in the other documents incorporated by reference into this prospectus supplement.
     
Symbol:   Our common stock is traded on the Nasdaq Capital Market under the symbol “GGE”. We do not intend to apply to list the Common Units, Pre-Funded Units, Pre-Funded Warrants, Class A Warrants, or Class B Warrants on the Nasdaq Capital Market or on any other trading market.

 

(1)

The number of shares of our common stock to be outstanding immediately after this offering is based on 64,162,258 shares of common stock outstanding as of December 12, 2023, and excludes, as of such date:

 

27,865,017 shares of our common stock issuable upon exercise of outstanding warrants at an exercise price of $0.875 per share (without giving effect to any of the anti-dilution adjustment provisions thereof); and

 

30,741,366 shares of our common stock issuable upon exercise of outstanding warrants at an exercise price of $2.375 per share (without giving effect to any of the anti-dilution adjustment provisions thereof).

 

13,529,415 shares of our common stock issuable upon the Pre-Funded Warrants offered hereby.

   
 35,000,000 shares of our common stock issuable upon the Class A Warrants offered hereby.
   
 Up to 109,763,314 shares of our common stock issuable upon the Class B Warrants offered hereby.

 

S-8

 

 

RISK FACTORS

 

Investing in our securities involves a high degree of risk. You should carefully review the risks and uncertainties described under the heading “Risk Factors” contained in the accompanying prospectus and any related free writing prospectus, and under similar headings in our Annual Report on Form 10-K for the year ended September 30, 2022, as updated or supplemented by any subsequently filed periodic reports and other documents as filed with the SEC and incorporated by reference into this prospectus, before deciding whether to purchase any of the securities being registered pursuant to the registration statement of which this prospectus is a part. Each of the risk factors described in the documents referenced above could adversely affect our business, operating results and financial condition, as well as adversely affect the value of our securities, and the occurrence of any of these risks might cause you to lose all or part of your investment. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business, operating results and financial condition, and could cause you to lose all or part of your investment. For more information, see “Where You Can Find More Information.”

 

Risks Relating to This Offering

 

Since our management will have broad discretion in how we use the proceeds from this offering, we may use the proceeds in ways with which you disagree.

 

We have not allocated specific amounts of the net proceeds from this offering for any specific purpose. Accordingly, our management will have significant flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to influence how the proceeds are being used. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results and cash flow.

 

Because we are a small company, the requirements of being a public company, including compliance with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

 

As a public company with listed equity securities, we must comply with the federal securities laws, rules and regulations, including certain corporate governance provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the Dodd-Frank Act, related rules and regulations of the SEC and the NASDAQ, with which a private company is not required to comply. Complying with these laws, rules and regulations occupies a significant amount of the time of our Board of Directors and management and significantly increases our costs and expenses. Among other things, we must:

 

maintain a system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;

 

comply with rules and regulations promulgated by the exchange;

 

prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;

 

S-9

 

 

maintain various internal compliance and disclosures policies, such as those relating to disclosure controls and procedures and insider trading in our common stock;

 

involve and retain to a greater degree outside counsel and accountants in the above activities;

 

maintain a comprehensive internal audit function; and

 

maintain an investor relations function.

 

Future sales of our common stock, whether by us or our shareholders, could cause our stock price to decline.

 

If our existing shareholders sell, or indicate an intent to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline significantly. Similarly, the perception in the public market that our shareholders might sell shares of our common stock could also depress the market price of our common stock. A decline in the price of shares of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities. In addition, the issuance and sale by us of additional shares of our common stock or securities convertible into or exercisable for shares of our common stock, or the perception that we will issue such securities, could reduce the trading price for our common stock as well as make future sales of equity securities by us less attractive or not feasible. The sale of shares of common stock issued upon the exercise of our outstanding options and warrants could further dilute the holdings of our then existing shareholders.

 

You will experience immediate dilution and substantial fluctuation in the net tangible book value per share of the common stock you purchase.

 

The price per share of our common stock being offered may be substantially higher or lower than the net tangible book value per share of our common stock, you may be subject to substantial fluctuations in the net tangible book value of the common stock you purchase in this offering. See the section entitled “Dilution” in this prospectus for a more detailed discussion of the dilution you will incur if you purchase common stock in this offering.

 
Securities analysts may not cover our common stock and this may have a negative impact on the market price of our common stock.

 

The trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over independent analysts (provided that we have engaged various non-independent analysts). We do not currently have and may never obtain research coverage by independent securities and industry analysts. If no independent securities or industry analysts commence coverage of us, the trading price for our common stock would be negatively impacted. If we obtain independent securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our common stock, changes their opinion of our shares or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease and we could lose visibility in the financial markets, which could cause our stock price and trading volume to decline.

 

You may experience future dilution as a result of future equity offerings or other equity issuances.

 

We may in the future issue additional shares of our common stock or other securities convertible into or exchangeable for shares of our common stock. We cannot assure you that we will be able to sell shares of our common stock or other securities in any other offering or other transactions at a price per share that is equal to or greater than the price per share paid by investors in this offering. The price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share in this offering.

 

This is a reasonable best efforts offering, with no minimum amount of securities required to be sold, and we may sell fewer than all of the securities offered hereby.

 

The Placement Agent has agreed to use its reasonable best efforts to solicit offers to purchase the securities in this offering. The Placement Agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of the securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering, and there can be no assurance that the offering contemplated hereby will ultimately be consummated. Even if we sell securities offered hereby, because there is no minimum offering amount required as a condition to closing of this offering, the actual offering amount is not presently determinable and may be substantially less than the maximum amount set forth on the cover page of this prospectus. We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us. Thus, we may not raise the amount of capital we believe is required for our operations in the short-term and may need to raise additional funds, which may not be available or available on terms acceptable to us.

 

S-10

 

 

The price of our common stock may be volatile or may decline, which may make it difficult for investors to resell shares of our common stock at prices they find attractive. 

 

The trading price of our common stock may fluctuate widely as a result of a number of factors, many of which are outside our control. In addition, the stock market is subject to fluctuations in the share prices and trading volumes that affect the market prices of the shares of many companies. These broad market fluctuations could adversely affect the market price of our common stock. Among the factors that could affect our stock price are: 

 

  actual or anticipated quarterly fluctuations in our operating results and financial condition, and, in particular, further deterioration of asset quality;
     
  changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts;
     
  failure to meet analysts’ revenue or earnings estimates;
     
  speculation in the press or investment community;
     
  strategic actions by us or our competitors, such as acquisitions or restructurings;
     
  actions by institutional shareholders;
     
  fluctuations in the stock price and operating results of our competitors;
     
  general market conditions and, in particular, developments related to market conditions for the financial services industry;
     
  proposed or adopted regulatory changes or developments;
     
  anticipated or pending investigations, proceedings or litigation that involve or affect us; or
     
  domestic and international economic factors unrelated to our performance.

 

The stock market has experienced significant volatility recently. As a result, the market price of our common stock may be volatile. In addition, the trading volume in our common stock may fluctuate more than usual and cause significant price variations to occur. The trading price of the shares of our common stock and the value of our other securities will depend on many factors, which may change from time to time, including, without limitation, our financial condition, performance, creditworthiness and prospects, future sales of our equity or equity related securities, and other factors identified below in “Forward-Looking Statements.”

 

Accordingly, the shares of our common stock that an investor purchases, whether in this offering or in the secondary market, may trade at a price lower than that at which they were purchased, and, similarly, the value of our other securities may decline. Current levels of market volatility are unprecedented. The capital and credit markets have been experiencing volatility and disruption for more than a year. In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength.

 

A significant decline in our stock price could result in substantial losses for individual shareholders and could lead to costly and disruptive securities litigation.

 

A possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to further price volatility in our common shares.

 

Investors may purchase our common stock to hedge existing exposure in our common stock or to speculate on the price of our common stock. Speculation on the price of our common stock may involve long and short exposures. To the extent aggregate short exposure exceeds the number of shares of our common stock available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase our common stock for delivery to lenders of our common stock. Those repurchases may in turn, dramatically increase the price of our common stock until investors with short exposure are able to purchase additional common shares to cover their short position. This is often referred to as a “short squeeze.” A short squeeze could lead to volatile price movements in our common stock that are not directly correlated to the performance or prospects of our company and once investors purchase the shares of common stock necessary to cover their short position the price of our common stock may decline.

 

S-11

 

 

We have not paid and do not intend to pay dividends on our common stock. Investors in this offering may never obtain a return on their investment.

 

We have not paid dividends on our common stock inception, and do not intend to pay any dividends on our common stock in the foreseeable future. We intend to reinvest earnings, if any, in the development and expansion of our business. Accordingly, you will need to rely on sales of your shares of common stock after price appreciation, which may never occur, in order to realize a return on your investment.

 

There is no public market for the Common Units, Pre-Funded Units, pre-funded warrants, Class A Warrants and Class B Warrants.

 

There is no established public trading market for the Common Units, Pre-Funded Units, pre-funded warrants, Class A Warrants and Class B Warrants, and we do not expect a market to develop. In addition, we do not intend to apply to list the Common Units, Pre-Funded Units, pre-funded warrants, Class A Warrants and Class B Warrants on any national securities exchange or other nationally recognized trading system, including the Nasdaq Capital Market. Without an active market, the liquidity of the Common Units, Pre-Funded Units, pre-funded warrants, Class A Warrants and Class B Warrants will be limited.

 

The Pre-Funded Warrants, Class A Warrants and Class B Warrants are speculative in nature.

 

The Pre-Funded Warrants, Class A Warrants and Class B Warrants do not confer any rights of common stock ownership on its holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price, as the case maybe. In addition, following this offering, the market value of the Pre-Funded Warrants, Class A Warrants and Class B Warrants, if any, is uncertain and there can be no assurance that the market value of the Pre-Funded Warrants, Class A Warrants and Class B Warrants will equal or exceed their imputed offering price. The Pre-Funded Warrants, Class A Warrants and Class B Warrants will not be listed or quoted for trading on any market or exchange.

 

Holders of the Pre-Funded Warrants, Class A Warrants and Class B Warrants will not have rights of holders of our common stock until such warrants are exercised.

 

Until holders of Pre-Funded Warrants, Class A Warrants and Class B Warrants acquire shares of our common stock upon exercise of the Pre-Funded Warrants, Class A Warrants and Class B Warrants, holders of Pre-Funded Warrants, Class A Warrants and Class B Warrants will have no rights with respect to the shares of our common stock underlying such securities. Upon exercise of the Pre-Funded Warrants, Class A Warrants and Class B Warrants, the holders will be entitled to exercise the rights of a holder of our common stock only as to matters for which the record date occurs after the exercise.

 

We are subject to the payment of liquidated damages pursuant to the terms of the securities purchase agreement in this offering if we are unable to obtain the requisite approval of our shareholders for either the BVI Merger Shareholder Approvals or the Capital Increase Shareholder Approval no later than 120 days after the closing date of this offering which individually or in the aggregate could have a material adverse effect on our results of operations, business, financial condition or prospects.

 

Pursuant to the terms of the securities purchase agreement in this offering, we have agreed to hold a meeting of shareholders (which may also be at the annual meeting of shareholders) at the earliest practical date after the date hereof. We have agreed to file a definitive proxy statement for such meeting of shareholders within ninety (90) days of the closing date of the offering to which this prospectus supplement relates (the “Filing Date”) and to hold such meeting of shareholders no later than one hundred and twenty (120) days after such closing date (the “Meeting Requirement Date”), for the purpose of obtaining the requisite approval of its shareholders of either (A) the proposals (i) to approve the merger of the Company with GGE BVI whereby the Company will be redomiciled to the British Virgin Islands (the “Redomicile Merger”) and (ii) to adopt the Memorandum and Articles of Association of GGE BVI (the “BVI Capital Increase”) pursuant to which GGE BVI will be authorized to issue an unlimited number of Class A ordinary shares, no par value, and 50,000,000 Class B ordinary shares, par value US$0.0001 per share, (collectively, the “BVI Merger Shareholder Approvals”) or, (B), to adopt a proposal to amend the Articles of Incorporation, as amended, of the Company pursuant to which the Company will be authorized to issue 1,000,000,000 shares of Common Stock (the “Capital Increase Shareholder Approval”). If the Company does not obtain either the BVI Merger Shareholder Approvals or the Capital Increase Shareholder Approval at the first meeting of shareholders, the Company shall call a meeting of its shareholders every four months thereafter to seek the either the BVI Merger Shareholder Approvals or the Capital Increase Shareholder Approval until the earlier of the date that the BVI Merger Shareholder Approvals or the Capital Increase Shareholder Approval is obtained or the Warrants issued in this offering are no longer outstanding. If: (i) the definitive proxy is not filed on or prior to the Filing Date, or (ii) the Capital Increase Shareholder Approval is not obtained and deemed effective on or before the Meeting Requirement Date (any such failure or breach being referred to as an “Event”, and the date on which such Event occurs, an “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 3.0% multiplied by the sum of the aggregate Subscription Amount and aggregate Warrant Exercise Price (whether or not exercised) applicable such Holder. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event.

 

The payment of liquidated damages presents a potential expense for us and diverts financial resources from other uses which could individually or in the aggregate have a material adverse effect on our results of operations, business, financial condition or prospects.

 

S-12

 

 

Risks Relating to Our Business and Industry

 

Due to the significant decrease of the fair market value of our fixed assets, in line with best practice, we may be required to take write-downs or write-offs in connection with our real estate business that could have a significant negative effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment.

 

As a result of the overall downturn in China’s real estate industry, particularly in non-first and second-tier cities, and the significant two-step impairment test we performed, it has been determined that the sum of the undiscounted future net cash flows expected from the utilization and disposition of our real estate assets is significant lower than its carrying value, and therefore we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges in connection with our real estate business that could result in our reporting losses. Even though these charges may not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.

 

Accordingly, our shareholders could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that our disclosures contained an actionable material misstatement or material omission.

 

The Company’s lithium-ion battery recycling business is and will be dependent on its recycling facilities. If one or more of its future facilities become inoperative, capacity constrained or if operations are disrupted, its business, results of operations and financial condition could be materially adversely affected.

 

The Company conducts its lithium-ion battery recycling business through Green Giant Energy, the operating entity in Texas. The Company’s lithium-ion battery recycling business revenue is and will be dependent on the operations of its future facilities, including the planned facility in Houston Texas and any other facilities it may develop in the future. To the extent that the Company experiences any operational risk events including, among other things, fire and explosions, severe weather and natural disasters (such as floods, windstorms, wildfires and earthquakes), failures in water supply, major power failures, equipment failures (including any failure of its process equipment, information technology, air conditioning, and cooling and compressor systems), a cyber-attack or other incident, failures to comply with applicable regulations and standards, labor force and work stoppages, including those resulting from local or global pandemics or otherwise, or if its future facilities become capacity constrained, the Company may be required to make capital expenditures even though it may not have sufficient available resources at such time. Additionally, there is no guarantee that the proceeds available from any of the Company’s insurance policies will be sufficient to cover such capital expenditures. The Company’s insurance coverage and available resources may prove to be inadequate for events that may cause significant disruption to its operations. Any disruption in the Company’s recycling processes could result in delivery delays, scheduling problems, increased costs or production interruption, which, in turn, may result in its customers deciding to send their end-of-life lithium-ion batteries and battery manufacturing scrap to the Company’s competitors. The Company is and will be dependent on its future facilities, which will in the future require a high degree of capital expenditures. If one or more of the Company’s current or future facilities become inoperative, capacity constrained or if operations are disrupted, its business, results of operations and financial condition could be materially adversely affected.

 

The development of an alternative chemical make-up of lithium-ion batteries or battery alternatives could materially adversely affect the Company’s revenues and results of operations.

 

The development and adoption of alternative battery technologies could materially adversely affect the Company’s prospects and future revenues. Current and next generation high energy density lithium-ion batteries for use in products such as EVs use nickel and cobalt as significant inputs. Cobalt and nickel tend to be in lower supply and therefore command higher prices than certain other raw materials. Alternative chemical makeups for lithium-ion batteries or battery alternatives are being developed and some of these alternatives could be less reliant on cobalt and nickel or use other lower-priced raw materials such as lithium-iron phosphate chemistries, which contain neither cobalt nor nickel. A shift in production to batteries using lower-priced raw materials could affect the value of the end products produced by the Company, lowering its revenues and negatively impacting its results of operations.

 

The Company is subject to the risk of litigation or regulatory proceedings, which could materially adversely impact its financial results.

 

All industries, including the lithium-ion battery recycling industry, are subject to legal claims, with or without merit. From time to time, we are subject to various litigation and regulatory proceedings arising in the normal course of business. Due to the inherent uncertainty of the litigation process, we may not be able to predict with any reasonable degree of certainty the outcome of any litigation or the potential for future litigation. Regardless of the outcome, any legal or regulatory proceeding could have a material adverse impact on the Company’s business, prospects, financial conditions and results of operations due to defense costs, the diversion of management resources, potential reputational harm and other factors.

 

S-13

 

 

The Company may not be able to complete its recycling processes as quickly as customers may require, which could cause it to lose supply contracts and could harm its reputation.

 

The Company may not be able to complete its recycling processes to meet the supply it receives from its customers. Operating delays and interruptions can occur for many reasons, including, but not limited to:

 

  equipment failures;
     
  personnel shortage;
     
  labor disputes; or
     
  transportation disruptions.

 

The recycling process for lithium-ion batteries is complex. If the Company fails to complete its recycling processes in a timely fashion, its reputation may be harmed. Any failure by the Company to complete its recycling processes in a timely fashion may also jeopardize existing orders and cause the Company to lose potential supply contracts and be forced to pay penalties.

 

The Company operates in an emerging, competitive industry and if it is unable to compete successfully its revenue and profitability will be materially adversely affected.

 

The lithium-ion recycling market is competitive. As the industry evolves and the demand increases, the Company anticipates that competition will increase. the Company currently faces competition primarily from companies that focus on one type of lithium-ion material recycling, some of which have more expertise in the recycling of that material than the Company. The Company also competes against companies that have a substantial competitive advantage because of longer operating histories and larger budgets, as well as greater financial and other resources. National or global competitors could enter the market with more substantial financial and workforce resources, stronger existing customer relationships, and greater name recognition. Competitors could focus their substantial resources on developing a more efficient recovery solution than the Company’s solutions. Competition also places downward pressure on the Company’s contract prices and gross margins, which presents it with significant challenges in its ability to maintain strong growth rates and acceptable gross margins. If the Company is unable to meet these competitive challenges, it could lose market share to its competitors and experience a material adverse impact to its business, financial condition and results of operations.

 

Risks Relating to Doing Business in the PRC

 

The Opinions, the Trial Measures, and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.

   

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 Severely Cracking Down on Illegal Securities Activities According to Law,” or the “Opinions,” which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. The Opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirements in the future. On February 17, 2023, the CSRC promulgated the Trial Measures and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, the companies that have already been listed on overseas stock exchanges, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days after the subsequent securities offerings are completed in the same offshore market. Thus, the filing shall be made within 3 working days after this offering is completed.

 

Breaches of the Trial Measures, such as offering and listing securities overseas without fulfilling the filing procedures, shall bear legal liabilities, including a fine between RMB 1.0 million (approximately $150,000) and RMB 10.0 million (approximately $1.5 million), and the Trial Measures heighten the cost for offenders by enforcing accountability with administrative penalties and incorporating the compliance status of relevant market participants into the Securities Market Integrity Archives. Such rules have been issued that means the Chinese government may exert more oversight and control over overseas public offerings conducted by China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and could cause the value of our securities to significantly decline or become worthless.

 

S-14

 

 

As of the date of this prospectus, none of the Company, our PRC subsidiary, or the VIE have applied for, received, or been denied approval from any PRC authorities to issue our securities to foreign investors, nor received any inquiry, notice, warning, or sanctions regarding issuing our securities to foreign investors from the CSRC, the CAC, or any other PRC governmental authorities. As advised by our PRC counsel, Taihang Law Firm, apart from the filing with the CSRC as per requirement of the Trial Measures, we, our subsidiaries, and the PRC operating entities are not required to obtain any other permission from the CSRC, the CAC, or any other Chinese authorities to issue our securities to foreign investors based on PRC laws and regulations currently in effect.

 

On February 24, 2023, the CSRC, together with the MOF, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies,” and came into effect on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. After March 31, 2023, any failure or perceived failure by our Company, our subsidiaries, or the VIE to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

 

The Opinions, the Trial Measures, the revised Provisions and any related implementing rules to be enacted may subject us to additional compliance requirements in the future. As there are still uncertainties regarding the interpretation and implementation of such regulatory guidance, we cannot assure you that we will be able to comply with all new regulatory requirements of the Opinions, the Trial Measures, the revised Provisions, or any future implementing rules on a timely basis, or at all.

 

Recent greater oversight by the CAC over data security could adversely impact our business and our offering.

 

On December 28, 2021, the CAC, together with 12 other governmental departments of the PRC, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures provides that, in addition to CIIOs that intend to purchase Internet products and services, data processing operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures further requires that CIIOs and data processing operators that possess personal data of at least one million users must apply for a review by the Cybersecurity Review Office of the PRC before conducting listings in foreign countries.

 

On November 14, 2021, the CAC published the Security Administration Draft, which provides that data processing operators engaging in data processing activities that affect or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. According to the Security Administration Draft, data processing operators who possess personal data of at least one million users or collect data that affects or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. The deadline for public comments on the Security Administration Draft was December 13, 2021.

 

S-15

 

 

As of the date of this prospectus, we have not received any notice from any authorities identifying our PRC subsidiary or the VIEs as CIIOs or requiring us to go through cybersecurity review or network data security review by the CAC. As the Cybersecurity Review Measures became effective and if the Security Administration Draft is enacted as proposed, we believe that the operations of our PRC subsidiary and the VIE and our listing will not be affected and that we are not subject to cybersecurity review and network data security review by the CAC, given that: (i) our PRC subsidiary and the VIE engage in real estate development, primarily in the construction and sale of residential apartments, car parks and commercial properties, therefore it is unlikely to be classified as a CIIO by the PRC regulatory agencies; (ii) our PRC subsidiary and the VIE possess personal data of fewer than one million individual clients in their business operations as of the date of this prospectus and do not anticipate that they will be collecting over one million users’ personal information in the near future, which we understand might otherwise subject our PRC subsidiary and the VIE to the Cybersecurity Review Measures; and (iii) since our PRC subsidiary and the VIE are in real estate development, data processed in their business is unlikely to have a bearing on national security and therefore is unlikely to be classified as core or important data by the authorities. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. We cannot guarantee, however, that we will not be subject to cybersecurity review and network data security review in the future. During such reviews, we may be required to suspend our operation or experience other disruptions to our operations. Cybersecurity review and network data security review could also result in negative publicity with respect to our Company and diversion of our managerial and financial resources, which could materially and adversely affect our business, financial conditions, and results of operations.

 

You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our management based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.

 

We are a company incorporated under the laws of the state of Florida, and we conduct most of our operations in China and most of our assets are located in China. In addition, all of our directors and officers are nationals or residents of the PRC and all or a substantial portion of their assets are located outside the U.S. As a result, it may be difficult for you to effect service of process upon us or those persons inside mainland China. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of U.S. securities laws or those of any U.S. state.

 

The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the U.S. that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security, or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the U.S. See “Enforceability of Civil Liabilities.”

 

It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. For example, in China, there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts of another country or region to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in the U.S. may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further provides that Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without prior consent from the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council. While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.

 

S-16

 

 

USE OF PROCEEDS

 

We estimate that the net proceeds from this offering will be approximately $5.26 million, after deducting estimated placement agent fees and the estimated offering expenses payable by us, and assuming no exercise of the Class A Warrants and Class B Warrants offered hereby. In the event that the Class A Warrants and Class B Warrants offered hereby are exercised via cash exercise in full, the Company would receive an additional $15.4 million in proceeds.

 

We intend to use the net proceeds from this offering for working capital and other general corporate purposes.

 

The amounts and timing of our use of proceeds will vary depending on a number of factors, including the amount of cash generated or used by our operations, and the rate of growth, if any, of our business. As a result, we will retain broad discretion in the allocation of the net proceeds of this offering. In addition, while we have not entered into any agreements, commitments or understandings relating to any significant transaction as of the date of this prospectus supplement, we may use a portion of the net proceeds to pursue acquisitions, joint ventures and other strategic transactions. You will be relying on the judgment of our management with regard to the use of proceeds from this offering, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately.

 

CAPITALIZATION

 

The following table sets forth our capitalization as of June 30, 2023:

 

  on an actual basis;
     
  on an as adjusted basis to give effect to the issuance and sale of 21,470,585 Common Units, and 13,529,415 Pre-Funded Units, after deducting placement agent fees and estimated offering expenses payable by us.

 

The information in this table should be read in conjunction with and is qualified by reference to the financial statements and notes thereto and other financial information incorporated by reference into this prospectus supplement.

 

   As of June 30, 2023 
   Actual   As adjusted 
   (unaudited) 
Cash and bank balances  $2,859,859    8,122,609 
Other current and non-current assets  $219,791,182    219,791,182 
Total  Liabilities  $188,998,561    188,998,561 
Shareholders’ equity:          
Common stock, $0.001 par value; 200,000,000 shares authorized, 55,793,268 shares issued and outstanding, actual, and 90,793,268 shares outstanding, as adjusted, respectively  $55,793    90,793 
Additional Paid in Capital*  $190,119,912    195,347,662 
Statutory earnings reserve  $11,095,939    11,095,939 
Accumulated other comprehensive loss  $(7,578,556)   (7,578,556)
Retained earnings  $(160,040,608)   (160,040,608)
Total shareholders’ equity  $33,652,480    38,915,230 
Total capitalization  $222,651,041    227,913,791 

 

The number of shares of our common stock to be outstanding immediately after this offering is based on 55,793,268 shares of common stock outstanding as of June 30, 2023, and excludes, as of such date:

 

  27,865,017 shares of our common stock issuable upon exercise of outstanding warrants at an exercise price of $0.875 per share (without giving effect to any of the anti-dilution adjustment provisions thereof);

 

S-17

 

 

  30,741,366 shares of our common stock issuable upon exercise of outstanding warrants at an exercise price of $2.375 per share (without giving effect to any of the anti-dilution adjustment provisions thereof);

 

  8,360,000 shares of common stock issued to certain consultants of the Company on December 4, 2023 from the Company’s 2023 Equity Incentive Plan which is registered on a registration statement on Form S-8 (File No. 333-275803);

 

  13,529,415 shares of our common stock issuable upon the Pre-Funded Warrants offered hereby;
     
  35,000,000 shares of our common stock issuable upon the Class A Warrants offered hereby; and
     
  Up to 109,763,314 shares of our common stock issuable upon the Class B Warrants offered hereby.

 

DILUTION

 

If you invest in our Common Units and/or Pre-Funded Units in this offering, your interest will be diluted immediately to the extent of the difference between the offering price per share of common stock you will pay in this offering and the as adjusted net tangible book value per share of our common stock after giving effect to this offering. Our historical net tangible book value as of June 30, 2023 was approximately $33.64 million or $0.603 per share of common stock. Historical net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the number of shares of our common stock outstanding on June 30, 2023.

 

After giving effect to the issuance and sale of our Common Units and/or Pre-Funded Units, in the aggregate amount of $5.95 million in this offering at an offering price of $0.17 per share, and after deducting estimated placement agent fees and estimated offering expenses payable by us, our net tangible book value as of June 30, 2023 would have been approximately $38,915,230, or $0.43 per share. This represents an immediate decrease of as adjusted net tangible book value per share of $0.175 to existing stockholders and immediate increase (anti-dilution) of $0.26 per share in as adjusted net tangible book value per share to new investors participating in this offering. The following table illustrates this per share dilution to investors participating in this offering:

 

Offering price per share       $0.17 
Net tangible book value per share as of June 30, 2023  $0.603       
Decrease of net tangible book value per share attributable to this offering  $(0.175)      
As adjusted net tangible book value per share after this offering       $0.43 
Anti-dilution per share to new investors participating in this offering       $0.26 

 

The number of shares of our common stock to be outstanding immediately after this offering is based on 55,793,268 shares of common stock outstanding as of June 30, 2023, s and excludes, as of such date:

 

  27,865,017 shares of our common stock issuable upon exercise of outstanding warrants at an exercise price of $0.875 per share (without giving effect to any of the anti-dilution adjustment provisions thereof); and

 

  30,741,366 shares of our common stock issuable upon exercise of outstanding warrants at an exercise price of $2.375 per share (without giving effect to any of the anti-dilution adjustment provisions thereof).

 

  8,360,000 shares of common stock issued to certain consultants of the Company on December 4, 2023 from the Company’s 2023 Equity Incentive Plan which is registered on a registration statement on Form S-8 (File No. 333-275803);

 

  13,529,415 shares of our common stock issuable upon the Pre-Funded Warrants offered hereby;
     
  35,000,000 shares of our common stock issuable upon the Class A Warrants offered hereby; and
     
  Up to 109,763,314 shares of our common stock issuable upon the Class B Warrants offered hereby.

 

S-18

 

 

DESCRIPTION OF SECURITIES WE ARE OFFERING

 

We are offering 21,470,585 Common Units, each consisting of one share of common stock, one Class A Warrant, and one Class B Warrant, and 13,529,415 Pre-Funded Units, each consisting of one pre-funded warrants, one Class A Warrant and one Class B Warrant, pursuant to this prospectus supplement and the accompanying prospectus. The material terms and provisions of our common stock are described below and under the caption “Descriptions of the Securities We May Offer” beginning on page 11 of the accompanying prospectus

 

Common Stock

 

As of the date of this prospectus supplement, our authorized capital stock consists of 200,000,000 shares of common stock, $0.001 par value per share, of which 64,162,258 shares are issued and outstanding.

 

Each outstanding share of common stock is entitled to one vote, either in person or by proxy, on all matters that may be voted upon by their holders at meetings of the shareholders.

 

Holders of our common stock:

 

(i) have equal ratable rights to dividends from funds legally available therefore, if declared by the Board of Directors;

 

(ii) are entitled to share ratably in all our assets available for distribution to holders of common stock upon our liquidation, dissolution or winding up;

 

(iii) do not have preemptive; and

 

(iv) are entitled to one non-cumulative vote per share on all matters on which shareholders may vote at all meetings of our shareholders.

 

The holders of shares of our common stock do not have cumulative voting rights, which means that the holder or holders of more than fifty percent (50%) of outstanding shares voting for the election of directors can elect all of our directors if they so choose and, in such event, the holders of the remaining shares will not be able to elect any of the our directors.

 

Our common stock is listed on the Nasdaq Capital Market under the symbol “GGE.” The transfer agent and registrar for our common stock is Securities Transfer Corporation, 2901 N. Dallas Parkway, Suite 380, Plano, Texas 75093.

 

Pre-Funded Warrants

 

The following summary of certain terms and provisions of the pre-funded warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by the provisions of, the pre-funded warrants. Prospective investors should carefully review the terms and provisions of the form of pre-funded warrants for a complete description of the terms and conditions of the pre-funded warrants.

 

The term “pre-funded” refers to the fact that the purchase price of our shares of common stock in this offering includes almost the entire exercise price that will be paid under the pre-funded warrants, $0.1699 per share, except for a nominal remaining exercise price of $0.0001 per share. The purpose of the pre-funded warrants is to enable investors that may have restrictions on their ability to beneficially own more than 4.99% (or at the election of the purchaser, 9.99%) of our outstanding common stock following the consummation of this offering the opportunity to invest capital into the Company without triggering their ownership restrictions, by receiving Pre-Funded Warrants in lieu of our shares of common stock which would result in such ownership of more than 9.99% (or such lesser percentage as required by the investor), and receive the ability to exercise their option to purchase the shares underlying the Pre-Funded Warrants at such nominal price at a later date.

 

S-19

 

 

Duration and Exercise Price.

 

The pre-funded warrants offered hereby will entitle the holders thereof to purchase an aggregate of 13,529,415 shares of common stock at a nominal exercise price of $0.0001 per share, commencing immediately on the date of issuance, expected to be December 14, 2023. The pre-funded warrants will be issued separately from the common stock and may be transferred separately immediately thereafter.

 

Exercise Limitation.

 

A holder will not have the right to exercise any portion of the pre-funded warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or at the election of the purchaser, 9.99%) of the number of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants.

 

Exercise Price.

 

The pre-funded warrants will have an exercise price of $0.0001 per share. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions of assets, including cash, stock or other property to our shareholders.

 

Transferability.

 

Subject to applicable laws, the pre-funded warrants may be offered for sale, sold, transferred or assigned without our consent.

 

Exchange Listing.

 

There is no established trading market for the pre-funded warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the pre-funded warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity of the pre-funded warrants will be limited.

 

Fundamental Transactions.

 

If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of our obligations under the pre-funded warrants with the same effect as if such successor entity had been named in the pre-funded warrants itself. If holders of our common stock are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to the consideration it receives upon any exercise of the pre-funded warrants following such fundamental transaction.

 

Rights as a Stockholder.

 

Except as otherwise provided in the pre-funded warrants or by virtue of such holder’s ownership of our common stock, the holder of a pre-funded warrants does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the pre-funded warrants.

 

Class A Warrants

 

The Class A Warrants included in the Common Units and the Pre-Funded Units will be separately transferable following their issuance, are exercisable commencing on the date on which an increase of the Company’s authorized shares has been implemented (“initial exercise date”) and will expire on the 5th anniversary of the initial exercise date.

 

Exercisability

 

Each Class A Warrant will be exercisable upon the initial exercise date and will expire on the 5th anniversary of the initial exercise date. The Class A Warrant will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and payment in full for the number of shares of our common stock purchased upon such exercise, except in the case of a cashless exercise as discussed below. The number of shares of common stock issuable upon exercise of the Class A Warrant is subject to adjustment in certain circumstances, including a stock split of, stock dividend on, or a subdivision, combination or recapitalization of the common stock. If we effect a merger, consolidation, sale of substantially all of our assets, or other similar transaction, then, upon any subsequent exercise of a Class A Warrant, the warrant holder will have the right to receive any shares of the acquiring corporation or other consideration it would have been entitled to receive if it had been a holder of the number of shares of common stock then issuable upon exercise in full of the Class A Warrant.

 

S-20

 

 

Cashless Exercise

 

If, at the time a holder exercises its Class A Warrants, a registration statement registering the issuance or resale of the shares of common stock underlying the warrants under the Securities Act is not then effective or available for the issuance of such shares of common stock, then in lieu of making the cash payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the Class A Warrant.

 

Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise

 

In addition to any other rights available to the Class A Warrant holders, if the Company fails to cause the transfer agent to transmit to the Class A Warrant holder shares of common stock underlying the Class A Warrants from its duly authorized unissued shares in accordance with the terms of the Class A Warrants pursuant to an exercise of the Class A Warrants and a Class A Warrant holder’s brokerage firm otherwise purchases, shares of common stock to deliver in satisfaction of a sale by such Class A Warrant holder (a “Buy-In”), then the Company shall (A) pay a certain amount of compensation in cash to the Class A Warrant holder pursuant to the term of the Class A Warrant and (B) at the option of the Class A Warrant holder, either reinstate the portion of the Class A Warrant and equivalent number of warrant shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Class A Warrant holder the number of shares of common stock that would have been issued had the Company timely complied with its exercise and delivery obligations pursuant to the terms of the Class A Warrants.

 

Exercise Price

 

Each Class A Warrant will entitle the holder to purchase one share of our common stock at an initial exercise price of $0.17 per share, equal to 100% of the public offering price per Common Unit in this offering. The exercise price of the Class A Warrants shall be reset immediately following the thirtieth (30th) Trading Day following the initial exercise date (the “Reset Date”) to a price that is equal to 105% of the arithmetic average of the sum of the three lowest per share VWAPs (as defined in the Class A Warrants) of the common stock on its principal trading market for the twenty (20) trading days immediately prior to the Reset Date.

 

In addition, the exercise price per share is subject to adjustment for stock dividends, distributions, subdivisions, combinations, or reclassifications, and for certain dilutive issuances. Subject to limited exceptions, a holder of Class A Warrants will not have the right to exercise any portion of the Class A Warrant to the extent that, after giving effect to the exercise, the holder, together with its affiliates, and any other person acting as a group together with the holder or any of its affiliates, would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to its exercise. The holder, upon notice to the Company, may increase or decrease the beneficial ownership limitation provisions of the Class A Warrant, provided that in no event shall the limitation exceed 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise of the Class A Warrant.

 

If at any time and from time to time on or after the issuance date of the Class A Warrants there occurs a Stock Combination Event (as defined in the Class A Warrants) and the Event Market Price (as defined in the Class A Warrants) is less than the exercise price of the Class A Warrants then in effect (after giving effect to the adjustment to the exercise price as set forth above), then on the sixteenth (16th) trading day immediately following such Stock Combination Event, the exercise price then in effect on such sixteenth (16th) trading day (after giving effect to the adjustment to the exercise price as set forth above) shall be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the exercise price of the Class A Warrants, no adjustment shall be made

 

Transferability

 

Subject to applicable laws and restrictions, a holder may transfer a Class A Warrant upon surrender of the Class A Warrant to us with a completed and signed assignment in the form attached to the Class A Warrant. The transferring holder will be responsible for any tax that liability that may arise as a result of the transfer.

 

No Market

 

There is no public trading market for the Class A Warrants and we do not intend that they will be listed for trading on the Nasdaq Capital Market or any other securities exchange or market.

 

Fundamental Transactions.

 

If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of our obligations under the Class A Warrants with the same effect as if such successor entity had been named in the pre-funded warrants itself. If holders of our common stock are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to the consideration it receives upon any exercise of the Class A Warrants following such fundamental transaction.

 

Rights as Stockholder

 

Except as set forth in the Class A Warrant, the holder of a Class A Warrant, solely in such holder’s capacity as a holder of a Class A Warrant, will not be entitled to vote, to receive dividends, or to any of the other rights of our stockholders.

 

S-21

 

 

Amendments and Waivers

 

The provisions of each Class A Warrant may be modified or amended or the provisions thereof waived with the written consent of us and the holder.

 

Class B Warrants

 

The Class B Warrants included in the Common Units and the Pre-Funded Units will be separately transferable following their issuance and through their expiration 5 years from the date of issuance.

 

Exercisability

 

Each Class B Warrant will be exercisable at any time and will expire 5 years from the date of issuance. The Class B Warrant will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and payment in full for the number of shares of our common stock purchased upon such exercise, except in the case of a cashless exercise as discussed below. The number of shares of common stock issuable upon exercise of the Class B Warrants is subject to adjustment in certain circumstances, including a stock split of, stock dividend on, or a subdivision, combination or recapitalization of the common stock. If we effect a merger, consolidation, sale of substantially all of our assets, or other similar transaction, then, upon any subsequent exercise of a Class B Warrant, the warrant holder will have the right to receive any shares of the acquiring corporation or other consideration it would have been entitled to receive if it had been a holder of the number of shares of common stock then issuable upon exercise in full of the Class B Warrant.

 

Cashless Exercise

 

If, at the time a holder exercises its Class B Warrant, a registration statement registering the issuance or resale of the shares of common stock underlying the Class B Warrants under the Securities Act is not then effective or available for the issuance of such shares of common stock, then in lieu of making the cash payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the Class B Warrants.

 

In addition to the rights with respect to cashless exercise set forth above, the Class B Warrant holder may, at any time and in its sole discretion, exercise its Class B Warrant in whole by means of an “alternative cashless exercise” in which the holder shall be entitled to receive a number of shares of common stock equal to the quotient obtained by dividing (the exercise price minus the lowest VWAP (as defined in the Class B Warrant) of the shares of common to cover the 10 trading days immediately prior to the exercise date) by (70% of the lowest VWAP (as defined in the Class B Warrants) of the shares of common to cover the 10 trading days immediately prior to the exercise date (the “Market Price”)). If at any time prior to obtaining the BVI Merger Shareholder Approvals or the Capital Increase Shareholder Approval and implementing an increase in its authorized shares (“Authorized Share Increase Date”), the Company receives a notice of exercise for an alternative cashless exercise under the Class B Warrant and the Market Price as to such notice of exercise is less than $0.0845, and when aggregated with any warrant shares previously issued upon a cash or cashless exercise hereunder, exceeds such Class B Warrant holder’s pro-rata share of 110 million shares (based on the Class B Warrant holder’s original subscription amount under the securities purchase agreement and subject to adjustment), then the Class B Warrant shall not be exercisable in excess of such amount until the Authorized Share Increase Date.

 

Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise

 

In addition to any other rights available to the Class B Warrant holders, if the Company fails to cause the transfer agent to transmit to the Class B Warrant holder shares of common stock underlying the Class B Warrants from its duly authorized unissued shares in accordance with the terms of the Class B Warrants pursuant to an exercise of the Class B Warrants and a Class B Warrant holder’s brokerage firm otherwise purchases, shares of common stock to deliver in satisfaction of a sale by such Class B Warrant holder (a “Buy-In”), then the Company shall (A) pay a certain amount of compensation in cash to the Class B Warrant holder pursuant to the term of the Class B Warrant and (B) at the option of the Class B Warrant holder, either reinstate the portion of the Class B Warrant and equivalent number of warrant shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Class B Warrant holder the number of shares of common stock that would have been issued had the Company timely complied with its exercise and delivery obligations pursuant to the terms of the Class B Warrants.

 

Exercise Price

 

Each Class B Warrant will entitle the holder to purchase one share of our common stock at an initial exercise price of $0.27 per share, equal to approximately 159% of the public offering price per Common Unit in this offering, from the date of issuance through its expiration.

 

In addition, the exercise price per share is subject to adjustment for stock dividends, distributions, subdivisions, combinations, or reclassifications, and for certain dilutive issuances. Subject to limited exceptions, a holder of Class B Warrant will not have the right to exercise any portion of the Class B Warrant to the extent that, after giving effect to the exercise, the holder, together with its affiliates, and any other person acting as a group together with the holder or any of its affiliates, would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to its exercise. The holder, upon notice to the Company, may increase or decrease the beneficial ownership limitation provisions of the Class B Warrant, provided that in no event shall the limitation exceed 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise of the Class B Warrant.

 

S-22

 

 

Transferability

 

Subject to applicable laws and restrictions, a holder may transfer a Class B Warrant upon surrender of the Class B Warrant to us with a completed and signed assignment in the form attached to the Class B Warrant. The transferring holder will be responsible for any tax that liability that may arise as a result of the transfer.

 

No Market

 

There is no public trading market for the Class B Warrants and we do not intend that they will be listed for trading on the Nasdaq Capital Market or any other securities exchange or market.

 

Fundamental Transactions.

 

If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of our obligations under the Class B Warrants with the same effect as if such successor entity had been named in the pre-funded warrants itself. If holders of our common stock are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to the consideration it receives upon any exercise of the Class B Warrants following such fundamental transaction.

 

Rights as Stockholder

 

Except as set forth in the Class B Warrant, the holder of a Class B Warrant, solely in such holder’s capacity as a holder of a Class B Warrant, will not be entitled to vote, to receive dividends, or to any of the other rights of our stockholders.

 

Amendments and Waivers

 

The provisions of each Class B Warrant may be modified or amended or the provisions thereof waived with the written consent of us and the holder.

 

Reverse Split

 

We have agreed to effectuate a reverse split in the event the closing bid price of our common stock trades below $0.01 (closing price) for five consecutive trading days. The holders of the Class B Warrants will not be able to exercise the Class B Warrants cashlessly at an exercise price below $1.50 during the first 20 trading days after effectuation of the reverse split.

 

S-23

 

 

PLAN OF DISTRIBUTION

 

Maxim Group LLC (“Maxim”), which we refer to as the Placement Agent, has agreed to act as the exclusive placement agent in connection with this offering. The Placement Agent is not purchasing or selling securities offered by this prospectus supplement, nor is the Placement Agent required to arrange the purchase or sale of any specific number or dollar amount of securities, but has agreed to use its best efforts to arrange for the sale of all of the securities offered hereby. We have entered into a securities purchase agreement with the investors pursuant to which we will sell to the investors 21,470,585 Common Units and 13,529,415 Pre-Funded Units with each unit consisting of one share of Common Stock, one Class A Warrant and one Class B Warrant and each Pre-Funded Units consisting of one Pre-Funded Warrant, one Class A Warrant and one Class B Warrant in this takedown from our shelf registration statement. We negotiated the price for the securities offered in this offering with the investors. The factors considered in determining the price included the recent market price of our Common Stock, the general condition of the securities market at the time of this offering, the history of, and the prospects, for the industry in which we compete, our past and present operations, and our prospects for future revenues.

 

The placement agent is not purchasing or selling any securities, nor are they required to arrange for the purchase and sale of any specific number or dollar amount of securities, other than to use their “reasonable best efforts” to arrange for the sale of the securities by us. Therefore, we may not sell the entire amount of securities being offered. We entered into a securities purchase agreement directly with certain of the institutional investors, at the investor’s option, who purchased our securities in this offering. Investors who did not enter into a securities purchase agreement shall rely solely on this prospectus in connection with the purchase of our securities in this offering. The placement agent may engage one or more subagents or selected dealers in connection with this offering.

 

The placement agency agreement provides that the placement agent’s obligations are subject to conditions contained in the placement agency agreement.

 

We will deliver the securities being issued to the investors upon receipt of investor funds for the purchase of the securities offered pursuant to this prospectus. We expect to deliver the securities being offered pursuant to this prospectus on December 14, 2023.

 

Placement Agent Fees, Commissions and Expenses

 

Upon the closing of this offering, we will pay the placement agent a cash transaction fee equal to 7% of the aggregate gross cash proceeds to us from the sale of the securities in the offering. In addition, we will reimburse the placement agent for its out-of-pocket expenses incurred in connection with this offering, including the fees and expenses of the counsel for the placement agent, up to $50,000.

 

The following table shows the public offering price, placement agent fees and proceeds, before expenses, to us, assuming the purchase of all the securities we are offering.

 

   Per
Common
Unit
   Per
Pre-Funded
Unit
   Total 
Public Offering Price  $0.17   $0.1699   $5,948,647.0585 
Placement agent fees  $0.0119   $0.011893   $416,405.294595 
Proceeds, before expenses, to us  $0.1581   $0.158007   $5,532,241.763905 

 

We estimate that the total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding placement agent fees, will be approximately $687,250, all of which are payable by us.

 

S-24

 

 

Lock-Up Agreements. Pursuant to certain “lock-up” agreements, (a) our executive officers, directors and affiliates who are the holders of our Common Stock, as of the pricing date of the offering, have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any securities of the Company without the prior written consent of the Placement Agent, for a period of one hundred and twenty (120) days from the date of this offering, and (b) we, and any successor, agree, subject to certain exceptions, not to for a period of one hundred and twenty (120) days from the date of the pricing of the offering (1) offer, sell or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or (2) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock.

 

This lock-up provision applies to Common Stock and to securities convertible into or exchangeable or exercisable for Common Stock. It also applies to Common Stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition. The exceptions permit, among other things and subject to restrictions, the issuance of Common Stock upon the exercise of outstanding stock options and warrants or other outstanding convertible securities.

 

Right of First Refusal. Upon the closing of this offering, for a period of twelve (12) months from the closing of the offering, we have granted Maxim the right of first refusal to act as to act as sole managing underwriter and sole book runner, sole placement agent, or sole sales agent, for any and all such future public or private equity, equity-linked or debt (excluding commercial bank debt) offerings for which the Company retains the service of an underwriter, agent, advisor, finder or other person or entity in connection with such offering during such twelve (12) month period of the Company, or any successor to or any Subsidiary of the Company (each a “Subsequent Offering”). We shall not offer to retain any entity or person in connection with any Subsequent Offering on terms more favorable than terms on which it offers to retain Maxim. Such offer shall be made in writing in order to be effective. Maxim shall notify us within ten (10) business days of its receipt of the written offer contemplated above as to whether or not it agrees to accept such retention.

 

Indemnification

 

We have agreed to indemnify the placement agent against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the placement agent may be required to make for these liabilities.

 

Determination of Offering Price and Exercise Price

 

The actual public offering price of the securities we are offering, and the exercise price of the warrants and pre-funded warrants included in the units and the pre-funded units that we are offering, were negotiated between us and the investors in the offering based on the trading of our Common Stock prior to the offering, among other things. Other factors considered in determining the public offering price of the securities we are offering, as well as the exercise price of the warrants included in the units and pre-funded warrants that we are offering include our history and prospects, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, the general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.

 

Regulation M

 

The placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit realized on the resale of the securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, each placement agent would be required to comply with the requirements of the Securities Act and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of our securities by the placement agent acting as principal. Under these rules and regulations, the placement agent (i) may not engage in any stabilization activity in connection with our securities and (ii) may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.

 

S-25

 

 

Electronic Distribution

 

A prospectus in electronic format may be made available on a website maintained by the placement agent. In connection with the offering, the placement agent or selected dealers may distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe® PDF will be used in connection with this offering.

 

Other than the prospectus in electronic format, the information on each of the placement agent’ websites and any information contained in any other website maintained by the placement agent is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or either placement agent in its capacity as placement agent and should not be relied upon by investors.

 

Certain Relationships

 

The placement agent and its affiliates have and may in the future provide, from time to time, investment banking and financial advisory services to us in the ordinary course of business, for which they may receive customary fees and commissions.

 

Determination of Offering Price

 

The actual offering price of the securities were negotiated between us, the Placement Agent and the investors in the offering based on the trading of our Common Stock prior to the offering, among other things. Other factors considered in determining the public offering price of the securities we are offering, include our history and prospects, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, the general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.

 

Electronic Distribution

 

A prospectus in electronic format may be made available on a website maintained by the Placement Agent. In connection with the offering, the Placement Agent or selected dealers may distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe® PDF will be used in connection with this offering.

 

Other than the prospectus in electronic format, the information on the Placement Agent’s website and any information contained in any other website maintained by the Placement Agent is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the Placement Agent in its capacity as placement agent and should not be relied upon by investors.

 

Selling Restrictions

 

Other than in the United States of America, no action has been taken by us or the Placement Agent that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

 

S-26

 

 

ENFORCEABILITY OF CIVIL LIABILITIES

 

We are a holding company incorporated in the state of Florida and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations through our subsidiaries in China and the U.S. and the VIE in China.

 

Substantially all of our assets are located in the PRC. In addition, all of our directors and officers are nationals or residents of the PRC and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

 

We have appointed Puglisi & Associates as our agent to receive service of process with respect to any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

 

Our counsel with respect to PRC law, Taihang Law Firm, have advised us that there is uncertainty as to whether the courts of the PRC would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in the PRC against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

 

Our PRC counsel, Taihang Law Firm, has advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedure Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. However, there are no treaties or other forms of reciprocity between China and the United States for the mutual recognition and enforcement of court judgments. Further, pursuant to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security, or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States.

 

Our PRC counsel, Taihang Law Firm, has further advised us that, under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC laws against us in the PRC, if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis, and a cause for the suit. However, it would be difficult for foreign shareholders to establish sufficient nexus to the PRC by virtue only of holding our common stock.

 

S-27

 

 

LEGAL MATTERS

 

Certain legal matters with respect to the validity of the securities offered by this prospectus, and any supplement thereto, will be passed upon for us by Hunter Taubman Fischer & Li LLC, New York, NY. Loeb & Loeb LLP is counsel to the Placement Agent in connection with this offering.

 

EXPERTS

 

OneStop Assurance PAC, an independent registered public accounting firm, audited our financial statements for the year ended September 30, 2022, and Wei, Wei & Co., LLP audited our financial statements for the year ended September 30, 2021, as set forth in their reports included in our Annual Report on Form 10-K for the year ended September 30, 2022, which are incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on OneStop Assurance PAC and Wei, Wei& Co., LLP’s reports, given on their authority as experts in accounting and auditing.

 

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

 

The SEC allows us to “incorporate by reference” the information we file with them into this prospectus. This means that we can disclose important information about us and our financial condition to you by referring you to another document filed separately with the SEC instead of having to repeat the information in this prospectus. The information incorporated by reference is considered to be part of this prospectus and later information that we file with the SEC will automatically update and supersede this information. This prospectus incorporates by reference any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, between the date of the initial registration statement and prior to effectiveness of the registration statement and the documents listed below that we have previously filed with the SEC:

 

  our Current Reports on Form 8-K, filed with the SEC on October 6, 2022, October 19, 2022, October 25, 2022, March 15, 2023, April 7, 2023, October 4, 2023, and November 17, 2023.

 

  our Quarterly Report on Form 10-Q for the quarters ended December 31, 2022, March 31, 2023 and June 30, 2023, filed with the SEC on February 13, 2023, May 5, 2023, August 10, 2023, respectively;

 

  our Annual Report on Form 10-K for the year ended September 30, 2022, filed with the SEC on January 13, 2023; and
     
  The description of our Common Stock contained in our Registration Statement on Form 8-A (File No. 001-34864), as filed with the SEC on September 9, 2010, including any amendment or report filed for the purpose of updating such description.

 

We also incorporate by reference all documents that we file with the SEC on or after the effective time of this prospectus pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the sale of all the securities registered hereunder or the termination of the registration statement. Nothing in this prospectus shall be deemed to incorporate information furnished but not filed with the SEC.

 

Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in the applicable prospectus supplement or in any other subsequently filed document that also is or is deemed to be incorporated by reference modifies or supersedes the statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

 

You may request a copy of the filings incorporated herein by reference, including exhibits to such documents that are specifically incorporated by reference, at no cost, by writing or calling us at the following address or telephone number:

 

Green Giant Inc.

Xinghan Road, 19th Floor, Hanzhong City

Shaanxi Province, PRC 723000

+(86)091-62622612

 

Statements contained in this prospectus as to the contents of any contract or other documents are not necessarily complete, and in each instance you are referred to the copy of the contract or other document filed as an exhibit to the registration statement or incorporated herein, each such statement being qualified in all respects by such reference and the exhibits and schedules thereto.

 

S-28

 

 

WHERE YOU CAN FIND MORE INFORMATION

 

This prospectus is part of a registration statement on Form S-3 that we filed with the SEC registering the securities that may be offered and sold hereunder. The registration statement, including exhibits thereto, contains additional relevant information about us and these securities, as permitted by the rules and regulations of the SEC, we have not included in this prospectus. A copy of the registration statement can be obtained at the address set forth below or at the SEC’s website as noted below. You should read the registration statement, including any applicable prospectus supplement, for further information about us and these securities.

 

We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at http:/www.sec.gov, or at our corporate website at https://www.gge.com/.

 

Disclosure of Commission Position on Indemnification for Securities Act Liabilities.

 

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

 

S-29

 

 

PROSPECTUS

 

$500,000,000

 

Green Giant Inc.

 

Common Stock

Preferred Stock

Warrants

Subscription Rights

Debt Securities

Units

 

We may issue securities from time to time in one or more offerings, in amounts, at prices and on terms determined at the time of offering. This prospectus describes the general matter in which these securities may be offered using this prospectus. Each time we offer and sell securities, we will provide you with a prospectus supplement that will contain specific information about the terms of that offering. Any prospectus supplement may also add, update, or change information contained in this prospectus. You should carefully read this prospectus and the applicable prospectus supplement as well as the documents incorporated or deemed to be incorporated by reference in this prospectus before you purchase any of the securities offered hereby. The aggregate offering amount of the securities we sell pursuant to this prospectus will not exceed $500,000,000.

 

This prospectus may not be used to offer and sell securities unless accompanies by a prospectus supplement.

 

Our common stock, par value $0.001 per share, is currently listed on the Nasdaq Capital Market under the symbol GGE. Each prospectus supplement will indicate whether the securities offered thereby will be listed on any securities exchange.

 

As of March 6, 2023, the aggregate market value of the voting and non-voting common equity held by non-affiliates was $124,285,134.72, based on the closing price of $3.04 on January 10, 2023 (within 60 days prior to the date of filing). Therefore, as of March 6, 2023, the aggregate market value of our common equity held by non-affiliates was more than $75,000,000, as calculated in accordance with General Instruction I.B.1 of Form S-3.

 

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

 

Investing in securities involves certain risks. See “Risk Factors” beginning on page 6 of this prospectus and in the applicable prospectus supplement, as updated in our future filings made with the Securities and Exchange Commission (the “SEC”) that are incorporated by reference into this prospectus. You should carefully read and consider these risk factors before you invest in our securities.

 

Unless otherwise stated, as used in this prospectus, the terms “Green Giant” “we,” “us,” “our Company,” and the “Company” refer to Green Giant Inc., a holding company incorporated under the laws of the state of Florida; the term “HGS Investment” refers to China HGS Investment Inc., a corporation incorporated under the laws of the state of Delaware and our direct wholly owned subsidiary; the terms “Shaanxi HGS” or “our PRC subsidiary” refer to Shannxi HGS Management Consulting Co., Ltd, a limited liability company organized under the laws of the PRC and our indirect wholly owned subsidiary; the terms the “VIE” or the “Guangsha” refer to Shaanxi Guangsha Investment and Development Group Co., Ltd.

 

We are a holding company incorporated in the state of Florida and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations through our subsidiaries in China and the U.S. and the VIE in China. For accounting purposes, we control and receive the economic benefits of the VIE through certain contractual arrangements (the “VIE Agreements”), which enable us to consolidate the financial results of the VIEs in our consolidated financial statements under generally accepted accounting principles in the U.S. (“U.S. GAAP”), and the structure involves unique risks to investors. Our shares of common stock offered in this offering are shares of Green Giant Inc., the holding company in the state of Florida, instead of shares of our subsidiaries or the VIE in China. The VIE structure provides contractual exposure to foreign investment in China-based companies. Chinese law, however, does not prohibit direct foreign investment in the VIE. As a result of our use of the VIE structure, you may never directly hold equity interests in the VIE.

 

 

 

 

Because we do not directly hold equity interests in the VIE, we are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations, including but not limited to, regulatory review of overseas listing of PRC companies through special purpose vehicles and the validity and enforcement of the VIE Agreements. We are also subject to the risks and uncertainties about any future actions of the PRC government in this regard that could disallow the VIE structure, which would likely result in a material change in our operations, and the value of our securities may depreciate significantly or become worthless. The VIE Agreements have not been tested in a court of law in China as of the date of this prospectus. See “Item 1A. Risk Factors—Risks Relating to Our Corporate Structure” in the 2022 annual report.

 

We are subject to certain legal and operational risks associated with having the majority of our operations in China, which could cause the value of our securities to significantly decline or become worthless. PRC laws and regulations governing our business operations in mainland China are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of the VIE, significant depreciation or a complete loss of the value of our securities, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this prospectus, we, our PRC subsidiary, and the VIE have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed by our PRC counsel, Zhejiang Taihang Law Firm (“Taihang Law Firm”), we are not subject to cybersecurity review with the Cyberspace Administration of China, or the “CAC,” under the Cybersecurity Review Measures that became effective on February 15, 2022, since we currently do not have over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject us to the Cybersecurity Review Measures; we are also not subject to network data security review by the CAC if the Draft Regulations on the Network Data Security Administration (Draft for Comments) (the “Security Administration Draft”) are enacted as proposed, since we currently do not have over one million users’ personal information and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million users’ personal information or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the Security Administration Draft.

 

On February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the “Trial Measures,” and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, this offering is considered as an indirect offering, and the filing shall be made within 3 working days after this offering is completed. See “Risk Factors—The Opinions, the Trial Measures, and the revised Provisions recently issued by PRC authorities may subject us to additional compliance requirements in the future.” Notwithstanding the foregoing, as of the date of this prospectus, according to Taihang Law Firm, no relevant PRC laws or regulations in effect require that we obtain permission from any PRC authorities to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction, or any regulatory objection to this offering from the CSRC, the CAC, or any other PRC authorities that have jurisdiction over our operations. Since these statements and regulatory actions are newly published, however, official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries and the VIE, our ability to accept foreign investments, and our listing on a U.S. exchange. The Standing Committee of the National People’s Congress (the “SCNPC”) or PRC regulatory authorities may in the future promulgate additional laws, regulations, or implementing rules that require us, our subsidiaries, or the VIE to obtain regulatory approval from Chinese authorities before listing in the U.S. If we do not receive or maintain such approval, or inadvertently conclude that such approval is not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future, we may be subject to an investigation by competent regulators, fines or penalties, or an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our operations and the value of our common stock, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

 

 

 

 

In addition, our common stock may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the “HFCA Act”) if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditors for three consecutive years beginning in 2021. Our auditor, OneStop Assurance PAC (“OneStop”), headquartered in Singapore, is not among the PCAOB registered public accounting firms registered in mainland China or Hong Kong that are subject to PCAOB’s determination on December 16, 2021. If trading in our common stock 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 common stock and trading in common stock could be prohibited. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring 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, thus reducing the time period for triggering the prohibition on trading. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of Protocol (the “Protocol”), governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the U.S. Securities and Exchange Commission (the “SEC”), the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination.

 

As of the date of this prospectus, our Company, our subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements. Our Company, our subsidiaries, and the VIE do not have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable future. As of the date of this prospectus, none of our subsidiaries or the VIE have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid or any assets will be transferred in the foreseeable future. If we determine to pay dividends on any of our shares of common stock in the future, as a holding company, we will depend on receipt of funds from our subsidiaries and from the VIE to our PRC subsidiary in accordance with the VIE Agreements.

 

As of the date of this prospectus, the VIE has not remitted any services fees to WFOE. However, the VIE is obligated to pay a service fee equivalent to 100% of VIE’s net income after deduction of certain tax and operational expenses. As of the date of this prospectus, none of our subsidiaries or the VIE have made any dividends or distributions to us and we has not made any dividends or distributions to our shareholders.

 

To the extent cash in the business is in the PRC, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government to transfer cash. Our management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies and procedures among our departments and the operating entities. Each department or operating entity initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to designated management members of our Company, based on the amount and the use of cash requested. The designated management member examines and approves the allocation of cash based on the sources of cash and the priorities of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred nor a written policy that addresses how we will handle any limitations on cash transfers due to PRC law.

 

The date of this prospectus is April 12, 2023

 

 

 

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS ii
CONVENTIONS THAT APPLY TO THIS PROSPECTUS iii
PROSPECTUS SUMMARY 1
RISK FACTORS 6
USE OF PROCEEDS 10
DILUTION 10
DESCRIPTION OF SECURITIES TO BE REGISTERED 11
PLAN OF DISTRIBUTION 20
ENFORCEABILITY OF CIVIL LIABILITIES 22
LEGAL MATTERS 23
EXPERTS 23
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 23
WHERE YOU CAN FIND MORE INFORMATION 24

 

This prospectus is not an offer to sell or a solicitation of an offer to buy these securities by anyone in any jurisdiction in which such offer or solicitation is not authorized, or in which the person is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

 

We have not authorized anyone to give any information or make any representation about us that is different from, or in addition to, that contained in this prospectus, including in any of the materials that we have incorporated by reference into this prospectus, any accompanying prospectus supplement, and any free writing prospectus prepared or authorized by us. Therefore, if anyone does give you information of this sort, you should not rely on it as authorized by us. You should rely only on the information contained or incorporated by reference in this prospectus and any accompanying prospectus supplement.

 

You should not assume that the information contained in this prospectus and any accompanying supplement to this prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus and any accompanying supplement to this prospectus is delivered or securities are sold on a later date. Neither the delivery of this prospectus, nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in our affairs since the date hereof or that the information incorporated by reference herein is correct as of any time subsequent to the date of such information.

 

i

 

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf registration process, we may offer from time to time securities having a maximum aggregate amount of $500,000,000. Each time we offer securities, we will prepare and file with the SEC a prospectus supplement that describes the specific amounts, prices and terms of the securities we offer. The prospectus supplement also may add, update or change information contained in this prospectus or the documents incorporated herein by reference. You should carefully read this prospectus and the information described under the heading “Where You Can Find More Information.”

 

This prospectus does not contain all the information provided in the registration statement we filed with the SEC. For further information about us or our securities offered hereby, you should refer to that registration statement, which you can obtain from the SEC as described below under “Where You Can Find More Information.”

 

You should rely only on the information contained or incorporated by reference in this prospectus and any accompanying prospectus supplement. We have not authorized anyone to give any information or make any representation about our company that is different from, or in addition to, that contained in this prospectus, including in any of the materials that have been incorporated by reference into this prospectus or any accompanying prospectus supplement. Therefore, if anyone does give you information of this sort, you should not rely on it as authorized by us.

 

This prospectus is not an offer to sell or a solicitation of an offer to buy these securities by anyone in any jurisdiction in which such offer or solicitation is not authorized, or in which the person is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

 

Prior to making a decision about investing in our securities, you should carefully consider the specific risk factors discussed in this prospectus, and the risk factors contained in our annual report on Form 10-K for the fiscal year ended September 30, 2022 under the heading “Item 1A. Risk Factors,” and as described or may be described in any subsequent quarterly report on Form 10-Q under the heading “Item 1A. Risk Factors,” as well as in any applicable prospectus supplement and contained or to be contained in our filings with the SEC and incorporated by reference in this prospectus, together with all of the other information contained in this prospectus, or any applicable prospectus supplement. For a description of these reports and documents, and information about where you can find them, see “Where You Can Find More Information” and “Incorporation of Documents by Reference.” If any of the risks or uncertainties described in our SEC filings or any prospectus supplement or any additional risks and uncertainties actually occur, our business, financial condition and results of operations could be materially and adversely affected, and the trading price of our securities could decline and you might lose all or part of the value of your investment.

 

You should not assume that the information contained in this prospectus and any accompanying supplement to this prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information that has been incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus and any accompanying supplement to this prospectus is delivered or securities are sold on a later date. Neither the delivery of this prospectus, nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in our affairs since the date hereof or that the information incorporated by reference herein is correct as of any time subsequent to the date of such information.

 

ii

 

 

CONVENTIONS THAT APPLY TO THIS PROSPECTUS

 

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

 

  “China” and “the PRC” refer to the People’s Republic of China, including the special administrative regions of Hong Kong and Macau, unless referencing specific laws and regulations adopted by the PRC and other legal or tax matters only applicable to mainland China, and excluding, for purpose of this prospectus only, Taiwan;
     
  “Green Giant” “we,” “us,” “our Company,” and the “Company” refer to Green Giant Inc., a holding company incorporated under the laws of the state of Florida and formerly known as China HGS Real Estate Inc;
     
  “Green Giant DE” refers to Green Giant Ltd., a Delaware limited liability company and our direct wholly owned subsidiary;
     
  “Green Giant Energy” refers to Green Giant Energy Texas Inc., a corporation incorporated under the laws of the state of Texas and our indirect wholly owned subsidiary;
     
  “Green Giant HK” refers to Green Giant International Limited, a company incorporated in Hong Kong and our indirect wholly owned subsidiary;
     
  “HGS Investment” refers to China HGS Investment Inc., a corporation incorporated under the laws of the state of Delaware and our direct wholly owned subsidiary;
     
  “RMB” are to the Renminbi, the legal currency of mainland China;
     
  “Shaanxi HGS” or “our PRC subsidiary” refer to Shannxi HGS Management Consulting Co., Ltd, a limited liability company organized under the laws of the PRC and our indirect wholly owned subsidiary;
     
  the “VIE” or the “Guangsha” refer to Shaanxi Guangsha Investment and Development Group Co., Ltd.
     
  “US$,” “$”, “dollars” and “U.S. dollars” are to the legal currency of the United States.

 

Unless otherwise noted, all currency figures in this filing are in U.S. dollars.

 

Our reporting currency is U.S. Dollars. This prospectus also contains translations of certain foreign currency amounts into U.S. dollars for the convenience of the reader. Unless otherwise stated, all translations of RMB into U.S. dollars were made at RMB 7.1135 and RMB 6.4434 to US$1.00, the exchange rates set forth in the H.10 statistical release of the Federal Reserve Board on September 30, 2022 and September 30, 2021, respectively. We make no representation that the RMB or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all. As of December 30, 2022, the translations of RMB into U.S. dollars were made at RMB 6.8972 to US$1.00.

 

iii

 

 

PROSPECTUS SUMMARY

 

Forward-Looking Statements

 

Some of the statements contained or incorporated by reference in this prospectus may be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act and may involve material risks, assumptions and uncertainties. Forward-looking statements typically are identified by the use of terms such as “may,” “will,” “should,” “believe,” “might,” “expect,” “anticipate,” “intend,” “plan,” “estimate” and similar words, although some forward-looking statements are expressed differently.

 

Although we believe that the expectations reflected in such forward-looking statements are reasonable, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict and which may cause actual outcomes and results to differ materially from what is expressed or forecasted in such forward-looking statements. These forward-looking statements speak only as of the date on which they are made and except as required by law, we undertake no obligation to publicly release the results of any revision or update of these forward-looking statements, whether as a result of new information, future events or otherwise. If we do update or correct one or more forward-looking statements, you should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from our forward-looking statements is included in our periodic reports filed with the SEC and in the “Risk Factors” section of this prospectus.

 

The Company

 

Corporate History and Structure

 

Green Giant Inc. (formerly China HGS Real Estate Inc.), is a corporation organized under the laws of the State of Florida.

 

China HGS Investment Inc. is a Delaware corporation and owns 100% of the equity interest in Shaanxi HGS Management and Consulting Co., Ltd. (“Shaanxi HGS”), a wholly owned foreign entity incorporated under the laws of the People’s Republic of China (“PRC” or “China”).

 

GGE does not conduct any substantive operations of its own. Instead, through its subsidiary, Shaanxi HGS, it entered into certain exclusive contractual agreements with Shaanxi Guangsha Investment and Development Group Co., Ltd. (“Guangsha”). Pursuant to these agreements, Shaanxi HGS is obligated to absorb a majority of the risk of loss from Guangsha’s activities and entitles Shaanxi HGS to receive a majority of Guangsha’s expected residual returns. In addition, Guangsha’s shareholders have pledged their equity interest in Guangsha to Shaanxi HGS, irrevocably granted Shaanxi HGS an exclusive option to purchase, to the extent permitted under PRC Law, all or part of the equity interests in Guangsha and agreed to entrust all the rights to exercise their voting power to the person(s) appointed by Shaanxi HGS.

 

Guangsha was organized in August 1995 as a limited liability company under the laws of the PRC. Guangsha is headquartered in the city of Hanzhong, Shaanxi Province. Guangsha is engaged in developing large scale and high quality commercial and residential projects, including multi-layer apartment buildings, sub-high-rise apartment buildings, high-rise apartment buildings, and office buildings.

 

On November 29, 2021, Green Giant Ltd. was incorporated in Delaware.

 

Green Giant Energy Texas Inc. was incorporated in Texas on October 3, 2022 which is a wholly owned subsidiary of Green Giant Ltd.

 

Green Giant International Limited (Hong Kong) was incorporated in Hong Kong on December 9, 2021 as a wholly owned subsidiary of Green Giant Ltd.

 

The diagram below illustrates our current corporate structure:

 

 

  

1

 

 

Our shares of common stock offered in this offering are shares of Green Giant Inc., the holding company in the state of Florida, instead of shares of our subsidiaries or the VIE in China. The VIE structure provides contractual exposure to foreign investment in China-based companies. Chinese law, however, does not prohibit direct foreign investment in the VIE. As a result of our use of the VIE structure, you may never directly hold equity interests in the VIE.

 

Our Business

 

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

 

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

 

Currently, we are operating our real estate development business in Hanzhong, a prefecture-level city in Shaanxi Province, and Yang County, a county in Hanzhong. We have focused on expanding our business in Tier 3 and Tier 4 cities and counties in China that we strategically select based on population and urbanization growth rates, general economic conditions and growth rates, income and purchasing power of resident consumers, anticipated demand for private residential properties, availability of future land supply and land prices, and governmental urban planning and development policies. Initially, these Tier 3 and Tier 4 cities and counties will be located in the Shaanxi province, China. We utilize a standardized and scalable model that emphasizes rapid asset turnover, efficient capital management and strict cost control. The expansion into strategically selected Tier 3 and Tier 4 cities and counties with real estate development potential in Shaanxi Province is expected to benefit from rising demand for residential housing as a result of increasing income levels of consumers and growing populations in these cities and counties due to urbanization.

 

In September 2020, the Company started land leveling and construction processes for the Oriental Garden Phase II and Liangzhou Mansion real estate properties in the Liangzhou Road related projects. The Company started the construction of the Liangzhou Road related projects, which consist of residential buildings, office buildings and a commercial plaza, after the approval by the local government of the road. Upon completion, the Liangzhou Road related projects will become a new city center of Hanzhong city.

 

In November 2022, the Company appointed Mr. Junaid Ali as CEO of its wholly owned subsidiary Green Giant DE to spearhead its effort to explore green energy section in the U.S. In March 2023, Green Giant Energy, an indirect wholly owned subsidiary, entered into a letter of intent with ACE Green Recycling Inc. ("ACE”), an innovative recycling platform for battery materials. Pursuant to the letter of intent, Green Giant Energy and ACE will form a joint venture to build a commercial lithium-ion battery recycling plant in the greater Houston area and boost sustainable battery recycling in North America.

 

Risks Associated with our Corporate Structure and VIE Agreements

 

As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our subsidiaries established in China and the U.S. and the VIE in China. For accounting purposes, we control and receive the economic benefits of the VIE through the VIE Agreements, which enable us to consolidate the financial results of the VIE in our consolidated financial statements under U.S. GAAP, and the structure involves unique risks to investors. Our securities offered in this prospectus are securities of our Florida holding company, instead of securities of our subsidiary or the VIE in China. The VIE structure provides contractual exposure to foreign investment in China-based companies. Chinese law, however, does not prohibit direct foreign investment in the VIE. As a result of our use of the VIE structure, you may never directly hold equity interests in the VIE. Because we do not directly hold equity interests in the VIE, we are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations, including but not limited to, regulatory review of overseas listing of PRC companies through special purpose vehicles and the validity and enforcement of the VIE Agreements. We are also subject to the risks and uncertainties about any future actions of the PRC government in this regard that could disallow the VIE structure, which would likely result in a material change in our operations, and the value of our shares of common stock may depreciate significantly or become worthless. The VIE Agreements have not been tested in a court of law in China as of the date of this prospectus.

 

The VIE Agreements may not be as effective as direct ownership in providing operational control. For instance, the VIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. The VIE’s shareholders may not act in the best interests of our Company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through the VIE Agreements. In the event that the VIE or its shareholders fail to perform their respective obligations under the VIE Agreements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. In addition, even if legal actions are taken to enforce such arrangements, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the U.S. or any state.

 

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We are subject to certain legal and operational risks associated with having the majority of our operations in China, which could cause the value of our securities to significantly decline or become worthless. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of the VIE, significant depreciation or a complete loss of the value of our shares of common stock, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this prospectus, we, our PRC subsidiary, and the VIE have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed by our PRC counsel, Taihang Law Firm, we are not subject to cybersecurity review with the CAC, under the Cybersecurity Review Measures that became effective on February 15, 2022, since we currently do not have over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject us to the Cybersecurity Review Measures; we are also not subject to network data security review by the CAC if the Security Administration Draft is enacted as proposed, since we currently do not have over one million users’ personal information and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million users’ personal information or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the Security Administration Draft. According to our PRC counsel, no relevant laws or regulations in the PRC explicitly require us to seek approval from the China Securities Regulatory Commission for our overseas listing plan. As of the date of this prospectus, we, our PRC subsidiary, and the VIE have not received any inquiry, notice, warning, or sanctions regarding our planned overseas listing from the China Securities Regulatory Commission or any other PRC governmental authorities. Since these statements and regulatory actions are newly published, however, official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our PRC subsidiary and the VIE, our ability to accept foreign investments, and our listing on a U.S. exchange. The SCNPC or PRC regulatory authorities may in the future promulgate laws, regulations, or implementing rules that require us, our PRC subsidiary, or the VIE to obtain regulatory approval from Chinese authorities before listing in the U.S.

 

Furthermore, pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, the Public Company Accounting Oversight Board, or the PCAOB, issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations. Our auditor, OneStop Assurance PAC, is headquartered in Singapore, not mainland China or Hong Kong, therefore is not subject to the determinations announced by the PCAOB on December 16, 2021 relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong Kong because of a position taken by one or more authorities in the PRC or Hong Kong. If trading in our common stock 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 common stock and trading in our common stock could be prohibited. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring 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, thus reducing the time period for triggering the prohibition on trading. On August 26, 2022, the China Securities Regulatory Commission, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of Protocol (the “Protocol”), governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the U.S. Securities and Exchange Commission (the “SEC”), the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination.

 

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Dividend Policy and Asset Transfers Between Our Company, Our Subsidiaries, and the VIE

 

As of the date of this prospectus, our Company, our subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements. Our Company, our subsidiaries, and the VIE do not have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable future.

 

Our management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies and procedures among our departments and the operating entities. Each department or operating entity initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to designated management members of our Company, based on the amount and the use of cash requested. The designated management member examines and approves the allocation of cash based on the sources of cash and the priorities of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred nor a written policy that addresses how we will handle any limitations on cash transfers due to PRC law.

 

We intend to retain all of our available funds and any future earnings to fund the development and growth of our business. As such, we do not expect to pay any cash dividends in the foreseeable future. We are permitted under PRC laws and regulations to provide funding to our PRC subsidiary only through loans or capital contributions, and only if we satisfy the applicable government registration and approval requirements.

 

Our PRC subsidiary is permitted to pay dividends only out of their retained earnings. However, our PRC subsidiary is required to set aside at least 10% of its after-tax profits each year, after making up for previous year’s accumulated losses, if any, to fund certain statutory reserves, until the aggregate amount of such funds reaches 50% of registered capital. This portion of our PRC subsidiary’s respective net assets are prohibited from being distributed to their shareholders as dividends. However, our PRC subsidiary has not made any dividends or distributions to our holding company or any U.S. investors as of the date of this prospectus

 

In addition, the PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders.

 

A 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises. Any gain realized on the transfer of ordinary shares by such investors is also subject to PRC tax at a current rate of 10%, which in case of dividends will be withheld at source if such gain is regarded as income derived from sources within the PRC.  

   

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Permissions under Hong Kong Law and the PRC Law

 

In order to operate our business activities as currently conducted in China, each of our PRC subsidiaries is required to obtain a business license from the State Administration for Market Regulation (“SAMR”). As of the date of this prospectus, our PRC subsidiary and the VIE has obtained a valid business license from the SAMR and no application for any such license has been denied.

 

Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, 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. 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 an announcement 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 28, 2021, Cybersecurity Review Measures was published by Cyberspace Administration of China or the CAC, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s Bank of China, State Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and State Cryptography Administration, effective on February 15, 2022, which provides that, Critical Information Infrastructure Operators (“CIIOs”) that purchase internet products and services and Online Platform Operators engaging in data processing activities that affect or may affect national security shall be subject to the cybersecurity review by the Cybersecurity Review Office. On November 14, 2021, CAC published the Administration Measures for Cyber Data Security (Draft for Public Comments), or the “Cyber Data Security Measure (Draft)”, which requires cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of Cybersecurity Review. On April 2, 2022, the CSRC released the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which provide that a domestic company that seeks to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations, enhance legal awareness of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system, and take necessary measures to fulfill confidentiality and archives administration obligations. On July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1 million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st of the previous year and ; and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the CAC.

 

On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the “New Overseas Listing Rules”) with five interpretive guidelines, which came into effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises, directly or indirectly issues and lists securities overseas, to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offering, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary listing or dual major listing of issuers already listed overseas. According to the Notice on Arrangements for Overseas Securities Offering and Listing by Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has already completed overseas listing or (ii) has already obtained the approval for the offering or listing from overseas securities regulators or exchanges but has not completed such offering or listing before effective date of the new rules and also completes the offering or listing before September 30, 2023 will be considered as an existing listed company and is not required to make any filing until it conducts a new offering in the future. For the company that has already submitted offering and listing applications but not yet obtained the approvals from overseas securities regulators or exchanges shall choose to make its filing with the CSRC at a reasonable time but before the completion of the offering/listing. For the company that has already obtained CSRC approval for overseas listing or offering can continue its process during the valid term of the CSRC approval without additional filing and it shall make the filing pursuant to the new rules if it does not complete the offering or listing before the expiration of the original approval from CSRC. Furthermore, upon the occurrence of any of the material events specified below after an issuer has completed its offering and listed its securities on an overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 working days after the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other competent authorities; (iii) change of listing status or transfer of listing segment; or (iv) voluntary or mandatory delisting. As of the date of this prospectus, these new laws and guidelines have not impacted the Company’s ability to conduct its business, accept foreign investments, or list and trade on a U.S. or other foreign exchange; however, there are uncertainties in the interpretation and enforcement of these new laws and guidelines, which could materially and adversely impact our business and financial outlook and may impact our ability to accept foreign investments or continue to list on a U.S. or other foreign exchange. Any change in foreign investment regulations, and other policies in China or related enforcement actions by China government could result in a material change in our operations and the value of our securities and could significantly limit or completely hinder our ability to offer our securities to investors or cause the value of our securities to significantly decline or be worthless.

 

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RISK FACTORS

 

Investing in our securities involves a high degree of risk. You should carefully review the risks and uncertainties described under the heading “Risk Factors” contained in the applicable prospectus supplement and any related free writing prospectus, and under similar headings in our Annual Report on Form 10-K for the year ended September 30, 2022, as updated or supplemented by any subsequently filed periodic reports and other documents as filed with the SEC and incorporated by reference into this prospectus, before deciding whether to purchase any of the securities being registered pursuant to the registration statement of which this prospectus is a part. Each of the risk factors described in the documents referenced above could adversely affect our business, operating results and financial condition, as well as adversely affect the value of our securities, and the occurrence of any of these risks might cause you to lose all or part of your investment. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business, operating results and financial condition, and could cause you to lose all or part of your investment. For more information, see “Where You Can Find More Information.”

 

Risks Relating to Our Business and Industry

 

The Company’s lithium-ion battery recycling business is and will be dependent on its recycling facilities. If one or more of its future facilities become inoperative, capacity constrained or if operations are disrupted, its business, results of operations and financial condition could be materially adversely affected.

 

The Company conducts its lithium-ion battery recycling business through Green Giant Energy, the operating entity in Texas. The Company’s lithium-ion battery recycling business revenue is and will be dependent on the operations of its future facilities, including the planned facility in Houston Texas and any other facilities it may develop in the future. To the extent that the Company experiences any operational risk events including, among other things, fire and explosions, severe weather and natural disasters (such as floods, windstorms, wildfires and earthquakes), failures in water supply, major power failures, equipment failures (including any failure of its process equipment, information technology, air conditioning, and cooling and compressor systems), a cyber-attack or other incident, failures to comply with applicable regulations and standards, labor force and work stoppages, including those resulting from local or global pandemics or otherwise, or if its future facilities become capacity constrained, the Company may be required to make capital expenditures even though it may not have sufficient available resources at such time. Additionally, there is no guarantee that the proceeds available from any of the Company’s insurance policies will be sufficient to cover such capital expenditures. The Company’s insurance coverage and available resources may prove to be inadequate for events that may cause significant disruption to its operations. Any disruption in the Company’s recycling processes could result in delivery delays, scheduling problems, increased costs or production interruption, which, in turn, may result in its customers deciding to send their end-of-life lithium-ion batteries and battery manufacturing scrap to the Company’s competitors. The Company is and will be dependent on its future facilities, which will in the future require a high degree of capital expenditures. If one or more of the Company’s current or future facilities become inoperative, capacity constrained or if operations are disrupted, its business, results of operations and financial condition could be materially adversely affected.

 

The development of an alternative chemical make-up of lithium-ion batteries or battery alternatives could materially adversely affect the Company’s revenues and results of operations.

 

The development and adoption of alternative battery technologies could materially adversely affect the Company’s prospects and future revenues. Current and next generation high energy density lithium-ion batteries for use in products such as EVs use nickel and cobalt as significant inputs. Cobalt and nickel tend to be in lower supply and therefore command higher prices than certain other raw materials. Alternative chemical makeups for lithium-ion batteries or battery alternatives are being developed and some of these alternatives could be less reliant on cobalt and nickel or use other lower-priced raw materials such as lithium-iron phosphate chemistries, which contain neither cobalt nor nickel. A shift in production to batteries using lower-priced raw materials could affect the value of the end products produced by the Company, lowering its revenues and negatively impacting its results of operations.

 

The Company is subject to the risk of litigation or regulatory proceedings, which could materially adversely impact its financial results.

 

All industries, including the lithium-ion battery recycling industry, are subject to legal claims, with or without merit. From time to time, we are subject to various litigation and regulatory proceedings arising in the normal course of business. Due to the inherent uncertainty of the litigation process, we may not be able to predict with any reasonable degree of certainty the outcome of any litigation or the potential for future litigation. Regardless of the outcome, any legal or regulatory proceeding could have a material adverse impact on the Company’s business, prospects, financial conditions and results of operations due to defense costs, the diversion of management resources, potential reputational harm and other factors.

 

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The Company may not be able to complete its recycling processes as quickly as customers may require, which could cause it to lose supply contracts and could harm its reputation.

 

The Company may not be able to complete its recycling processes to meet the supply it receives from its customers. Operating delays and interruptions can occur for many reasons, including, but not limited to:

 

  equipment failures;
     
  personnel shortage;
     
  labor disputes; or
     
  transportation disruptions.

 

The recycling process for lithium-ion batteries is complex. If the Company fails to complete its recycling processes in a timely fashion, its reputation may be harmed. Any failure by the Company to complete its recycling processes in a timely fashion may also jeopardize existing orders and cause the Company to lose potential supply contracts and be forced to pay penalties.

 

The Company operates in an emerging, competitive industry and if it is unable to compete successfully its revenue and profitability will be materially adversely affected.

 

The lithium-ion recycling market is competitive. As the industry evolves and the demand increases, the Company anticipates that competition will increase. the Company currently faces competition primarily from companies that focus on one type of lithium-ion material recycling, some of which have more expertise in the recycling of that material than the Company. The Company also competes against companies that have a substantial competitive advantage because of longer operating histories and larger budgets, as well as greater financial and other resources. National or global competitors could enter the market with more substantial financial and workforce resources, stronger existing customer relationships, and greater name recognition. Competitors could focus their substantial resources on developing a more efficient recovery solution than the Company’s solutions. Competition also places downward pressure on the Company’s contract prices and gross margins, which presents it with significant challenges in its ability to maintain strong growth rates and acceptable gross margins. If the Company is unable to meet these competitive challenges, it could lose market share to its competitors and experience a material adverse impact to its business, financial condition and results of operations.

 

Risks Relating to Doing Business in the PRC

 

The Opinions, the Trial Measures, and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.

   

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 Severely Cracking Down on Illegal Securities Activities According to Law,” or the “Opinions,” which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. The Opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirements in the future. On February 17, 2023, the CSRC promulgated the Trial Measures and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, the companies that have already been listed on overseas stock exchanges, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days after the subsequent securities offerings are completed in the same offshore market. Thus, the filing shall be made within 3 working days after this offering is completed.

 

Breaches of the Trial Measures, such as offering and listing securities overseas without fulfilling the filing procedures, shall bear legal liabilities, including a fine between RMB 1.0 million (approximately $150,000) and RMB 10.0 million (approximately $1.5 million), and the Trial Measures heighten the cost for offenders by enforcing accountability with administrative penalties and incorporating the compliance status of relevant market participants into the Securities Market Integrity Archives. Such rules have been issued that means the Chinese government may exert more oversight and control over overseas public offerings conducted by China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and could cause the value of our securities to significantly decline or become worthless.

 

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As of the date of this prospectus, none of the Company, our PRC subsidiary, or the VIE have applied for, received, or been denied approval from any PRC authorities to issue our securities to foreign investors, nor received any inquiry, notice, warning, or sanctions regarding issuing our securities to foreign investors from the CSRC, the CAC, or any other PRC governmental authorities. As advised by our PRC counsel, Taihang Law Firm, apart from the filing with the CSRC as per requirement of the Trial Measures, we, our subsidiaries, and the PRC operating entities are not required to obtain any other permission from the CSRC, the CAC, or any other Chinese authorities to issue our securities to foreign investors based on PRC laws and regulations currently in effect.

 

On February 24, 2023, the CSRC, together with the MOF, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies,” and came into effect on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. After March 31, 2023, any failure or perceived failure by our Company, our subsidiaries, or the VIE to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

 

The Opinions, the Trial Measures, the revised Provisions and any related implementing rules to be enacted may subject us to additional compliance requirements in the future. As there are still uncertainties regarding the interpretation and implementation of such regulatory guidance, we cannot assure you that we will be able to comply with all new regulatory requirements of the Opinions, the Trial Measures, the revised Provisions, or any future implementing rules on a timely basis, or at all.

 

Recent greater oversight by the CAC over data security could adversely impact our business and our offering.

 

On December 28, 2021, the CAC, together with 12 other governmental departments of the PRC, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures provides that, in addition to CIIOs that intend to purchase Internet products and services, data processing operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures further requires that CIIOs and data processing operators that possess personal data of at least one million users must apply for a review by the Cybersecurity Review Office of the PRC before conducting listings in foreign countries.

 

On November 14, 2021, the CAC published the Security Administration Draft, which provides that data processing operators engaging in data processing activities that affect or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. According to the Security Administration Draft, data processing operators who possess personal data of at least one million users or collect data that affects or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. The deadline for public comments on the Security Administration Draft was December 13, 2021.

 

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As of the date of this prospectus, we have not received any notice from any authorities identifying our PRC subsidiary or the VIEs as CIIOs or requiring us to go through cybersecurity review or network data security review by the CAC. As the Cybersecurity Review Measures became effective and if the Security Administration Draft is enacted as proposed, we believe that the operations of our PRC subsidiary and the VIE and our listing will not be affected and that we are not subject to cybersecurity review and network data security review by the CAC, given that: (i) our PRC subsidiary and the VIE engage in real estate development, primarily in the construction and sale of residential apartments, car parks and commercial properties, therefore it is unlikely to be classified as a CIIO by the PRC regulatory agencies; (ii) our PRC subsidiary and the VIE possess personal data of fewer than one million individual clients in their business operations as of the date of this prospectus and do not anticipate that they will be collecting over one million users’ personal information in the near future, which we understand might otherwise subject our PRC subsidiary and the VIE to the Cybersecurity Review Measures; and (iii) since our PRC subsidiary and the VIE are in real estate development, data processed in their business is unlikely to have a bearing on national security and therefore is unlikely to be classified as core or important data by the authorities. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. We cannot guarantee, however, that we will not be subject to cybersecurity review and network data security review in the future. During such reviews, we may be required to suspend our operation or experience other disruptions to our operations. Cybersecurity review and network data security review could also result in negative publicity with respect to our Company and diversion of our managerial and financial resources, which could materially and adversely affect our business, financial conditions, and results of operations.

 

You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our management based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.

 

We are a company incorporated under the laws of the state of Florida, and we conduct most of our operations in China and most of our assets are located in China. In addition, all of our directors and officers are nationals or residents of the PRC and all or a substantial portion of their assets are located outside the U.S. As a result, it may be difficult for you to effect service of process upon us or those persons inside mainland China. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of U.S. securities laws or those of any U.S. state.

 

The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the U.S. that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security, or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the U.S. See “Enforceability of Civil Liabilities.”

 

It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. For example, in China, there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts of another country or region to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in the U.S. may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further provides that Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without prior consent from the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council. While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.

 

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USE OF PROCEEDS

 

We will retain broad discretion over the use of the net proceeds to us from the sale of our securities under this prospectus. Unless otherwise provided in the applicable prospectus supplement, we currently expect to use the net proceeds that we receive from this offering for working capital and other general corporate purposes. The expected use of net proceeds of this offering represents our current intentions based on our present plans and business conditions. We cannot specify with certainty all of the particular uses for the net proceeds to be received upon the closing of this offering. Pending these uses, we will pay all costs, fees and expenses incurred in connection with the registration of the shares of our common stock covered by this prospectus.

 

DILUTION

 

If required, we will set forth in a prospectus supplement the following information regarding any material dilution of the equity interests of investors purchasing securities in an offering under this prospectus:

 

  the net tangible book value per share of our equity securities before and after the offering;
     
  the amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering; and
     
  the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.

 

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DESCRIPTION OF SECURITIES TO BE REGISTERED

 

We may issue from time to time, in one or more offerings the following securities:

 

  shares of common stock;

 

  shares of preferred stock;

 

  debt securities;

 

  warrants exercisable for debt securities, common stock or preferred stock;

 

  rights to purchase any of such securities; and

 

  units of debt securities, common stock, preferred stock or warrants, in any combination.

 

This prospectus contains a summary of the material general terms of the various securities that we may offer. The specific terms of the securities will be described in a prospectus supplement, information incorporated by reference or related free writing prospectus, which may be in addition to or different from the general terms summarized in this prospectus. Where applicable, the prospectus supplement, information incorporated by reference or related free writing prospectus will also describe any material United States federal income tax considerations relating to the securities offered and indicate whether the securities offered are or will be listed on any securities exchange. The summaries contained in this prospectus and in any prospectus supplements, information incorporated by reference or related free writing prospectus may not contain all of the information that you would find useful. Accordingly, you should read the actual documents relating to any securities sold pursuant to this prospectus.

 

The terms of any particular offering, the initial offering price and the net proceeds to us will be contained in the prospectus supplement, information incorporated by reference or free writing prospectus, relating to such offering.

 

Common Stock

 

As of the date of this prospectus, our authorized capital stock consists of 200,000,000 shares of common stock, $0.001 par value per share, of which 55,793,268 shares are issued and outstanding.

 

Each outstanding share of common stock is entitled to one vote, either in person or by proxy, on all matters that may be voted upon by their holders at meetings of the shareholders.

 

Holders of our common stock:

 

(i) have equal ratable rights to dividends from funds legally available therefore, if declared by the Board of Directors;

 

(ii) are entitled to share ratably in all our assets available for distribution to holders of common stock upon our liquidation, dissolution or winding up;

 

(iii) do not have preemptive; and

 

(iv) are entitled to one non-cumulative vote per share on all matters on which shareholders may vote at all meetings of our shareholders.

 

The holders of shares of our common stock do not have cumulative voting rights, which means that the holder or holders of more than fifty percent (50%) of outstanding shares voting for the election of directors can elect all of our directors if they so choose and, in such event, the holders of the remaining shares will not be able to elect any of the our directors.

 

Our common stock is listed on the Nasdaq Capital Market under the symbol “GGE.” The transfer agent and registrar for our common stock is Securities Transfer Corporation, 2901 N. Dallas Parkway, Suite 380, Plano, Texas 75093.

 

Preferred Stock

 

As of the date of this prospectus, our authorized capital stock consists of 5,000,000 shares of preferred stock, $0.001 par value per share, all of which remain unissued and no shares of preferred stock are authorized for any specific series.

 

The shares of preferred stock may be issued from time to time in one or more series. The board of directors of the Company is expressly authorized to provide for the issue of all or any of the shares of the preferred stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designations, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the board of directors providing for the issue of such shares and as may be permitted by the laws of the State of Florida. The board of directors is also expressly authorized to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series. In case the number of shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

 

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Description of Debt Securities

 

As used in this prospectus, the term “debt securities” means the debentures, notes, bonds and other evidences of indebtedness that we may issue from time to time. The debt securities will either be senior debt securities, senior subordinated debt or subordinated debt securities. We may also issue convertible debt securities. Debt securities issued under an indenture (which we refer to herein as an Indenture) will be entered into between us and a trustee to be named therein. It is likely that convertible debt securities will not be issued under an Indenture.

 

The Indenture or forms of Indentures, if any, will be filed as exhibits to the registration statement of which this prospectus is a part.

 

As you read this section, please remember that for each series of debt securities, the specific terms of your debt security as described in the applicable prospectus supplement will supplement and, if applicable, may modify or replace the general terms described in the summary below. The statement we make in this section may not apply to your debt security.

 

Events of Default Under the Indenture

 

Unless we provide otherwise in the prospectus supplement or free writing prospectus applicable to a particular series of debt securities, the following are events of default under the indentures with respect to any series of debt securities that we may issue:

 

  if we fail to pay the principal or premium, if any, when due and payable at maturity, upon redemption or repurchase or otherwise;

 

  if we fail to pay interest when due and payable and our failure continues for certain days;

 

  if we fail to observe or perform any other covenant contained in the Securities of a Series or in this Indenture, and our failure continues for certain days after we receive written notice from the trustee or holders of at least certain percentage in aggregate principal amount of the outstanding debt securities of the applicable series. The written notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default”;

 

  if specified events of bankruptcy, insolvency or reorganization occur; and

 

  if any other event of default provided with respect to securities of that series, which is specified in a Board Resolution, a supplemental indenture hereto or an Officers’ Certificate as defined in the Form of Indenture.

 

We covenant in the Form of Indenture to deliver a certificate to the trustee annually, within certain days after the close of the fiscal year, to show that we are in compliance with the terms of the indenture and that we have not defaulted under the indenture.

 

Nonetheless, if we issue debt securities, the terms of the debt securities and the final form of indenture will be provided in a prospectus supplement. Please refer to the prospectus supplement and the form of indenture attached thereto for the terms and conditions of the offered debt securities. The terms and conditions may or may not include whether or not we must furnish periodic evidence showing that an event of default does not exist or that we are in compliance with the terms of the indenture.

 

The statements and descriptions in this prospectus or in any prospectus supplement regarding provisions of the Indentures and debt securities are summaries thereof, do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of the Indentures (and any amendments or supplements we may enter into from time to time which are permitted under each Indenture) and the debt securities, including the definitions therein of certain terms.

 

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General

 

Unless otherwise specified in a prospectus supplement, the debt securities will be direct secured or unsecured obligations of our company. The senior debt securities will rank equally with any of our other unsecured senior and unsubordinated debt. The subordinated debt securities will be subordinate and junior in right of payment to any senior indebtedness.

 

We may issue debt securities from time to time in one or more series, in each case with the same or various maturities, at par or at a discount. Unless indicated in a prospectus supplement, we may issue additional debt securities of a particular series without the consent of the holders of the debt securities of such series outstanding at the time of the issuance. Any such additional debt securities, together with all other outstanding debt securities of that series, will constitute a single series of debt securities under the applicable Indenture and will be equal in ranking.

 

Should an indenture relate to unsecured indebtedness, in the event of a bankruptcy or other liquidation event involving a distribution of assets to satisfy our outstanding indebtedness or an event of default under a loan agreement relating to secured indebtedness of our company or its subsidiaries, the holders of such secured indebtedness, if any, would be entitled to receive payment of principal and interest prior to payments on the senior indebtedness issued under an Indenture.

 

Prospectus Supplement

 

Each prospectus supplement will describe the terms relating to the specific series of debt securities being offered. These terms will include some or all of the following:

 

  the title of debt securities and whether they are subordinated, senior subordinated or senior debt securities;

 

  any limit on the aggregate principal amount of debt securities of such series;

 

  the percentage of the principal amount at which the debt securities of any series will be issued;

 

  the ability to issue additional debt securities of the same series;

 

  the purchase price for the debt securities and the denominations of the debt securities;

 

  the specific designation of the series of debt securities being offered;

 

  the maturity date or dates of the debt securities and the date or dates upon which the debt securities are payable and the rate or rates at which the debt securities of the series shall bear interest, if any, which may be fixed or variable, or the method by which such rate shall be determined;

 

  the basis for calculating interest if other than 360-day year or twelve 30-day months;

 

  the date or dates from which any interest will accrue or the method by which such date or dates will be determined;

 

  the duration of any deferral period, including the maximum consecutive period during which interest payment periods may be extended;

 

  whether the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the manner of determining the amount of such payments;

 

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  the dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest payable on any interest payment date;

 

  the place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered to or upon us pursuant to the applicable Indenture;

 

  the rate or rates of amortization of the debt securities;

 

  if we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions;

 

  our obligation or discretion, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and conditions of such obligation;

 

  the terms and conditions, if any, regarding the option or mandatory conversion or exchange of debt securities;

 

  the period or periods within which, the price or prices at which and the terms and conditions upon which any debt securities of the series may be redeemed, in whole or in part at our option and, if other than by a board resolution, the manner in which any election by us to redeem the debt securities shall be evidenced;

 

  any restriction or condition on the transferability of the debt securities of a particular series;

 

  the portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration of the maturity of the debt securities in connection with any event of default if other than the full principal amount;

 

  the currency or currencies in which the debt securities will be denominated and in which principal, any premium and any interest will or may be payable or a description of any units based on or relating to a currency or currencies in which the debt securities will be denominated;

 

  provisions, if any, granting special rights to holders of the debt securities upon the occurrence of specified events;

 

  any deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable Indenture;

 

  any limitation on our ability to incur debt, redeem stock, sell our assets or other restrictions;

 

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  the application, if any, of the terms of the applicable Indenture relating to defeasance and covenant defeasance (which terms are described below) to the debt securities;

 

  what subordination provisions will apply to the debt securities;

 

  the terms, if any, upon which the holders may convert or exchange the debt securities into or for our common stock, preferred stock or other securities or property;

 

  whether we are issuing the debt securities in whole or in part in global form;

 

  any change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable because of an event of default;

 

  the depositary for global or certificated debt securities, if any;

 

  any material federal income tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies;

 

  any right we may have to satisfy, discharge and defease our obligations under the debt securities, or terminate or eliminate restrictive covenants or events of default in the Indentures, by depositing money or U.S. government obligations with the trustee of the Indentures;

 

  the names of any trustees, depositories, authenticating or paying agents, transfer agents or registrars or other agents with respect to the debt securities;

 

  to whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid if other than in the manner provided in the applicable Indenture;

 

  if the principal of or any premium or interest on any debt securities is to be payable in one or more currencies or currency units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined);

 

  the portion of the principal amount of any debt securities which shall be payable upon declaration of acceleration of the maturity of the debt securities pursuant to the applicable Indenture if other than the entire principal amount;

 

  if the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such debt securities as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined); and

 

  any other specific terms of the debt securities, including any modifications to the events of default under the debt securities and any other terms which may be required by or advisable under applicable laws or regulations.

 

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Unless otherwise specified in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange. Holders of the debt securities may present registered debt securities for exchange or transfer in the manner described in the applicable prospectus supplement. Except as limited by the applicable Indenture, we will provide these services without charge, other than any tax or other governmental charge payable in connection with the exchange or transfer.

 

Debt securities may bear interest at a fixed rate or a variable rate as specified in the prospectus supplement. In addition, if specified in the prospectus supplement, we may sell debt securities bearing no interest or interest at a rate that at the time of issuance is below the prevailing market rate, or at a discount below their stated principal amount. We will describe in the applicable prospectus supplement any special federal income tax considerations applicable to these discounted debt securities.

 

We may issue debt securities with the principal amount payable on any principal payment date, or the amount of interest payable on any interest payment date, to be determined by referring to one or more currency exchange rates, commodity prices, equity indices or other factors. Holders of such debt securities may receive a principal amount on any principal payment date, or interest payments on any interest payment date, that are greater or less than the amount of principal or interest otherwise payable on such dates, depending upon the value on such dates of applicable currency, commodity, equity index or other factors. The applicable prospectus supplement will contain information as to how we will determine the amount of principal or interest payable on any date, as well as the currencies, commodities, equity indices or other factors to which the amount payable on that date relates and certain additional tax considerations.

 

Description of Warrants

 

We may issue warrants to purchase our common stock or preferred stock. Warrants may be issued independently or together with any other securities that may be sold by us pursuant to this prospectus or any combination of the foregoing and may be attached to, or separate from, such securities. To the extent warrants that we issue are to be publicly-traded, each series of such warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent. While the terms we have summarized below will apply generally to any warrants that we may offer under this prospectus, we will describe in particular the terms of any series of warrants that we may offer in more detail in the applicable prospectus supplement and any applicable free writing prospectus. The terms of any warrants offered under a prospectus supplement may differ from the terms described below.

 

We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from another report that we file with the SEC, the form of the warrant and/or warrant agreement, if any, which may include a form of warrant certificate, as applicable that describes the terms of the particular series of warrants we may offer before the issuance of the related series of warrants. We may issue the warrants under a warrant agreement that we will enter into with a warrant agent to be selected by us. The warrant agent will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any registered holders of warrants or beneficial owners of warrants. The following summary of material provisions of the warrants and warrant agreements is subject to, and qualified in its entirety by reference to, all the provisions of the form of warrant and/or warrant agreement and warrant certificate applicable to a particular series of warrants. We urge you to read the applicable prospectus supplement and any related free writing prospectus, as well as the complete form of warrant and/or the warrant agreement and warrant certificate, as applicable, that contain the terms of the warrants.

 

The particular terms of any issue of warrants will be described in the prospectus supplement relating to the issue. Those terms may include:

 

  the title of the warrants;

 

  the price or prices at which the warrants will be issued;

 

  the designation, amount and terms of the securities or other rights for which the warrants are exercisable;

 

  the designation and terms of the other securities, if any, with which the warrants are to be issued and the number of warrants issued with each other security;

 

  the aggregate number of warrants;

 

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  any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants;

 

  the price or prices at which the securities or other rights purchasable upon exercise of the warrants may be purchased;

 

  if applicable, the date on and after which the warrants and the securities or other rights purchasable upon exercise of the warrants will be separately transferable;

 

  a discussion of any material U.S. federal income tax considerations applicable to the exercise of the warrants;

 

  the date on which the right to exercise the warrants will commence, and the date on which the right will expire;
     
  the maximum or minimum number of warrants that may be exercised at any time;

 

  information with respect to book-entry procedures, if any; and

 

  any other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.

 

Exercise of Warrants

 

Each warrant will entitle the holder of warrants to purchase the number of common stock or preferred stock of the relevant class or Class At the exercise price stated or determinable in the prospectus supplement for the warrants. Warrants may be exercised at any time up to the close of business on the expiration date shown in the applicable prospectus supplement, unless otherwise specified in such prospectus supplement. After the close of business on the expiration date, if applicable, unexercised warrants will become void. Warrants may be exercised in the manner described in the applicable prospectus supplement. When the warrant holder makes the payment and properly completes and signs the warrant certificate at the corporate trust office of the warrant agent, if any, or any other office indicated in the prospectus supplement, we will, as soon as possible, forward the securities or other rights that the warrant holder has purchased. If the warrant holder exercises less than all of the warrants represented by the warrant certificate, we will issue a new warrant certificate for the remaining warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the exercise price for warrants.

 

Prior to the exercise of any warrants to purchase common stock or preferred stock of the relevant class or series, holders of the warrants will not have any of the rights of holders of common stock or preferred stock purchasable upon exercise, including the right to vote or to receive any payments of dividends or payments upon our liquidation, dissolution or winding up on the common stock or preferred stock purchasable upon exercise, if any.

 

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Description of Rights

 

We may issue rights to purchase our securities. The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights agent agreement to be entered into between us and one or more banks, trust companies or other financial institutions, as rights agent, that we will name in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights.

 

The prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other matters:

 

  the date of determining the security holders entitled to the rights distribution;

 

  the aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise of the rights;

 

  the exercise price;

 

  the conditions to completion of the rights offering;

 

  the date on which the right to exercise the rights will commence and the date on which the rights will expire; and

 

  any applicable federal income tax considerations.

 

Each right would entitle the holder of the rights to purchase for cash the principal amount of securities at the exercise price set forth in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.

 

If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement.

 

Description of Units

 

The following description, together with the additional information we may include in any applicable prospectus supplement, summarizes the material terms and provisions of the units that we may offer under this prospectus. While the terms we have summarized below will apply generally to any units that we may offer under this prospectus, we will describe the particular terms of any series of units in more detail in the applicable prospectus supplement and any related free writing prospectus. The terms of any units offered under a prospectus supplement may differ from the terms described below. However, no prospectus supplement will fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the time of its effectiveness.

 

We will file as an exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference from another report we file with the SEC, the form of unit agreement that describes the terms of the series of units we may offer under this prospectus, and any supplemental agreements, before the issuance of the related series of units. The following summaries of material terms and provisions of the units are subject to, and qualified in their entirety by reference to, all the provisions of the unit agreement and any supplemental agreements applicable to a particular series of units. We urge you to read the applicable prospectus supplement and any related free writing prospectus, as well as the complete unit agreement and any supplemental agreements that contain the terms of the units.

 

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We may issue units comprised of Common Stock or preferred shares and warrants in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date. If we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including, without limitation, the following, as applicable:

 

  the title of the series of units;

 

  identification and description of the separate constituent securities comprising the units;

 

  the price or prices at which the units will be issued;

 

  the date, if any, on and after which the constituent securities comprising the units will be separately transferable, if applicable;

 

  any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units;

 

  a discussion of certain United States federal income tax considerations applicable to the units; and

 

  any other material terms of the units and their constituent securities.

 

The provisions described in this section, as well as those described under “Description of Share Capital – Common Stock and Preferred Shares” and “Description of Warrants” will apply to each unit and to any Common Stock, preferred shares or warrant included in each unit, respectively.

 

Issuance in Series

 

We may issue units in such amounts and in numerous distinct Class As we determine.

 

Enforceability of Rights by Holders of Units

 

We may enter into unit agreements with a unit agent. Each unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any unit. A single bank or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or responsibility in case of any default by us under the applicable unit agreement or unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit may, without the consent of the related unit agent or the holder of any other unit, enforce by appropriate legal action its rights as holder under any security included in the unit.

 

We, the unit agents and any of their agents may treat the registered holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purpose and as the person entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary.

 

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PLAN OF DISTRIBUTION

 

We may sell the securities offered through this prospectus (i) to or through underwriters or dealers, (ii) directly to purchasers, including our affiliates, (iii) through agents, or (iv) through a combination of any these methods. The securities may be distributed at a fixed price or prices, which may be changed, market prices prevailing at the time of sale, prices related to the prevailing market prices, or negotiated prices. The prospectus supplement will include the following information:

 

  the terms of the offering;
     
  the names of any underwriters or agents;
     
  the name or names of any managing underwriter or underwriters;
     
  the purchase price of the securities;
     
  any over-allotment options under which underwriters may purchase additional securities from us;
     
  the net proceeds from the sale of the securities;
     
  any delayed delivery arrangements;
     
  any underwriting discounts, commissions and other items constituting underwriters’ compensation;
     
  any offering price;
     
  any discounts or concessions allowed or reallowed or paid to dealers;
     
  any commissions paid to agents; and
     
  any securities exchange or market on which the securities may be listed.

 

Sale through Underwriters or Dealers

 

Only underwriters named in the prospectus supplement are underwriters of the securities offered by the prospectus supplement. If underwriters are used in the sale, the underwriters will acquire the securities for their own account, including through underwriting, purchase, security lending or repurchase agreements with us. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions. Underwriters may sell the securities in order to facilitate transactions in any of our other securities (described in this prospectus or otherwise), including other public or private transactions and short sales. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless otherwise indicated in the prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered securities if they purchase any of them. The underwriters may change from time to time any public offering price and any discounts or concessions allowed or reallowed or paid to dealers.

 

If dealers are used in the sale of securities offered through this prospectus, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the dealers at the time of resale. The prospectus supplement will include the names of the dealers and the terms of the transaction.

 

We will provide in the applicable prospectus supplement any compensation we will pay to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers.

 

20

 

 

Direct Sales and Sales through Agents

 

We may sell the securities offered through this prospectus directly. In this case, no underwriters or agents would be involved. Such securities may also be sold through agents designated from time to time. The prospectus supplement will name any agent involved in the offer or sale of the offered securities and will describe any commissions payable to the agent. Unless otherwise indicated in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.

 

We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities. The terms of any such sales will be described in the prospectus supplement.

 

Delayed Delivery Contracts

 

If the prospectus supplement indicates, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The applicable prospectus supplement will describe the commission payable for solicitation of those contracts.

 

Market Making, Stabilization and Other Transactions

 

Unless the applicable prospectus supplement states otherwise, other than our common stock all securities we offer under this prospectus will be a new issue and will have no established trading market. We may elect to list offered securities on an exchange or in the over-the-counter market. Any underwriters that we use in the sale of offered securities may make a market in such securities, but may discontinue such market making at any time without notice. Therefore, we cannot assure you that the securities will have a liquid trading market.

 

Any underwriter may also engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the Securities Exchange Act. Stabilizing transactions involve bids to purchase the underlying security in the open market for the purpose of pegging, fixing or maintaining the price of the securities. Syndicate covering transactions involve purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions.

 

Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it would be in the absence of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.

 

General Information

 

Agents, underwriters, and dealers may be entitled, under agreements entered into with us, to indemnification by us against certain liabilities, including liabilities under the Securities Act. Our agents, underwriters, and dealers, or their affiliates, may be customers of, engage in transactions with or perform services for us, in the ordinary course of business.

 

21

 

 

ENFORCEABILITY OF CIVIL LIABILITIES

 

We are a holding company incorporated in the state of Florida and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations through our subsidiaries in China and the U.S. and the VIE in China.

 

Substantially all of our assets are located in the PRC. In addition, all of our directors and officers are nationals or residents of the PRC and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

 

We have appointed Puglisi& Associates as our agent to receive service of process with respect to any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

 

Our counsel with respect to PRC law, Taihang Law Firm, have advised us that there is uncertainty as to whether the courts of the PRC would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in the PRC against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

 

Our PRC counsel, Taihang Law Firm, has advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedure Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. However, there are no treaties or other forms of reciprocity between China and the United States for the mutual recognition and enforcement of court judgments. Further, pursuant to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security, or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States.

 

Our PRC counsel, Taihang Law Firm, has further advised us that, under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC laws against us in the PRC, if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis, and a cause for the suit. However, it would be difficult for foreign shareholders to establish sufficient nexus to the PRC by virtue only of holding our common stock.

 

22

 

 

LEGAL MATTERS

 

Unless otherwise indicated in the applicable prospectus supplement, the validity of the securities offered by this prospectus, and any supplement thereto, will be passed upon for us by Hunter Taubman Fischer & Li LLC, New York, NY. The legality of the securities for any underwriters, dealers or agents will be passed upon by counsel as may be specified in the applicable prospectus supplement.

 

EXPERTS

 

OneStop Assurance PAC, an independent registered public accounting firm, audited our financial statements for the year ended September 30, 2022, and Wei, Wei & Co., LLP audited our financial statements for the year ended September 30, 2021, as set forth in their reports included in our Annual Report on Form 10-K for the year ended September 30, 2022, which are incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on OneStop Assurance PAC and Wei, Wei & Co., LLP’s reports, given on their authority as experts in accounting and auditing.

 

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

 

The SEC allows us to “incorporate by reference” the information we file with them into this prospectus. This means that we can disclose important information about us and our financial condition to you by referring you to another document filed separately with the SEC instead of having to repeat the information in this prospectus. The information incorporated by reference is considered to be part of this prospectus and later information that we file with the SEC will automatically update and supersede this information. This prospectus incorporates by reference any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, between the date of the initial registration statement and prior to effectiveness of the registration statement and the documents listed below that we have previously filed with the SEC:

 

  our Current Reports on Form 8-K, filed with the SEC on October 6, 2022, October 19, 2022, October 25, 2022, and March 15, 2023.

 

  our Quarterly Report on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, and December 31, 2022, filed with the SEC on May 16, 2022, August 15, 2022, and February 13, 2023, respectively;

 

  our Annual Report on Form 10-K for the year ended September 30, 2022, filed with the SEC on January 13, 2023; and
     
  The description of our Common Stock contained in our Registration Statement on Form 8-A (File No. 001-34864), as filed with the SEC on September 9, 2010, including any amendment or report filed for the purpose of updating such description.

 

We also incorporate by reference all documents that we file with the SEC on or after the effective time of this prospectus pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the sale of all the securities registered hereunder or the termination of the registration statement. Nothing in this prospectus shall be deemed to incorporate information furnished but not filed with the SEC.

 

Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in the applicable prospectus supplement or in any other subsequently filed document that also is or is deemed to be incorporated by reference modifies or supersedes the statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

 

You may request a copy of the filings incorporated herein by reference, including exhibits to such documents that are specifically incorporated by reference, at no cost, by writing or calling us at the following address or telephone number:

 

Green Giant Inc.

Xinghan Road, 19th Floor, Hanzhong City

Shaanxi Province, PRC 723000

+(86)091-62622612

 

Statements contained in this prospectus as to the contents of any contract or other documents are not necessarily complete, and in each instance you are referred to the copy of the contract or other document filed as an exhibit to the registration statement or incorporated herein, each such statement being qualified in all respects by such reference and the exhibits and schedules thereto.

 

23

 

 

WHERE YOU CAN FIND MORE INFORMATION

 

This prospectus is part of a registration statement on Form S-3 that we filed with the SEC registering the securities that may be offered and sold hereunder. The registration statement, including exhibits thereto, contains additional relevant information about us and these securities, as permitted by the rules and regulations of the SEC, we have not included in this prospectus. A copy of the registration statement can be obtained at the address set forth below or at the SEC’s website as noted below. You should read the registration statement, including any applicable prospectus supplement, for further information about us and these securities.

 

We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at http:/www.sec.gov, or at our corporate website at https://www.gge.com/.

 

Disclosure of Commission Position on Indemnification for Securities Act Liabilities.

 

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

 

24

 

 

21,470,585 Common Units (each consisting of One Share of Common Stock, One Class A
Warrant and One Class B Warrant),

 

13,529,415 Pre-Funded Units (each consisting of One Pre-Funded Warrant, One Class A
Warrant and One Class B Warrant), and

 

Up to 13,529,415 Shares of Common Stock Underlying Pre-Funded Warrants, up to
35,000,000 Shares of Common Stock Underlying Class A Warrants, and up to
109,763,314 Shares of Common Stock Underlying Class B Warrants

 

GREEN GIANT, INC.

 

Prospectus Supplement

 

Placement Agent

 

Maxim Group LLC

 

December 12, 2023

 

 


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