What changed in this filing

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Item 1A. Risk Factors

2023-09-29 compared with 2023-03-06 · 99 added, 51 removed, 202 unchanged (43% of the section changed)

2 unchanged sentences

company, we are not required to include risk factors in this Report.

However, below is a number of material risks, uncertainties and other

factors that could have a material effect on the Company and its operations as a result of recent developments.

You should carefully consider

the risks described below before purchasing our common stock.

However, below are a number of material risks, uncertainties and

other factors that could have a material effect on the Company and its operations as a result of recent developments.

You should carefully

consider the risks described below before purchasing our common stock.

The risks highlighted here are not the only ones that we may face.

additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair our operations.

If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, our business, prospects,

financial condition, or results of operations could be negatively affected, and you might lose all or part of your investment.

For example, additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair

our operations.

If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, our

business, prospects, financial condition, or results of operations could be negatively affected, and you might lose all or part of your

We are, and may continue to be, subject

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as of June 30, 2023:

● Lack of segregation of duties for accounting personnel who

prepared and reviewed the journal entries in some of the subsidiaries within the consolidation, lack of supervision, coordination and

communication of financial information between different entities within the Group;

● Lack of a full time U.S.

GAAP personnel in the accounting

department to monitor the recording of the transactions which led to error in revenue recognition in previously issued financial statements;

● Lack of resources with technical competency to address, review

and record non-routine or complex transactions under U.S.

● Lack of management control reviews of the budget against

actual with analysis of the variance with a precision that can be explained through the analysis of the accounts;

● Lack of proper procedures in identifying and recording related

party transactions which led to restatement of previously issued financial statements (See Note 1 of the accompanying consolidated financial

statement footnotes);

● Lack of proper procedures to maintain supporting documents

for accounting record;

● Lack of proper oversight for the Company’s cash disbursement

process that led to misuse of the Company funds by its former executive.

of segregation of duties for accounting personnel who prepared and reviewed the journal entries in some of the subsidiaries within the

consolidation, lack of supervision, coordination and communication of financial information between different entities within the Group;

of a full time U.S.

GAAP personnel in the accounting department to monitor the recording of the transactions which led to error in revenue

recognition in previously issued financial statements;

of resources with technical competency to address, review and record non-routine or complex transactions under U.S.

of management control reviews of the budget against actual with analysis of the variance with a precision that can be explained through

the analysis of the accounts;

of proper procedures in identifying and recording related party transactions which led to restatement of previously issued financial

statements (See Note 1 of the accompanying consolidated financial statement footnotes);

of proper procedures to maintain supporting documents for accounting record;

of proper oversight for the Company’s cash disbursement process that led to misuse of the Company funds by its former executive.

In order to remediate the

material weaknesses stated above, we intend to implement the following policies and procedures:

Hiring additional accounting staff to report the internal financial timely;

Hiring of CEO and CFO to properly set up the Company’s internal control and oversight process;

Reporting other material and non-routine transactions to the Board and obtain proper approval;

Recruiting additional qualified professionals with appropriate levels of U.S.

GAAP knowledge and experience to assist in resolving accounting issues in non-routine or complex transactions;

Developing and conducting U.S.

GAAP knowledge, SEC reporting and internal control training to senior executives, management personnel, accounting departments and the IT staff, so that management and key personnel understand the requirements and elements of internal control over financial reporting mandated by the U.S.

additional accounting staff to report the internal financial timely;

other material and non-routine transactions to the Board and obtain proper approval;

additional qualified professionals with appropriate levels of U.S.

GAAP knowledge and experience to assist in resolving accounting issues

in non-routine or complex transactions;

and conducting U.S.

GAAP knowledge, SEC reporting and internal control training to senior executives, management personnel, accounting

departments and the IT staff, so that management and key personnel understand the requirements and elements of internal control over

financial reporting mandated by the U.S.

securities laws;

2 unchanged sentences

Strengthening our corporate governance;

Setting up policies and procedures for the Company’s related party identification to properly identify, record and disclose related party transactions;

Setting up proper procedures for the Company’s fund disbursement process to ensure that cash is disbursed only upon proper authorization, for valid business purposes, and that all disbursements are properly recorded.

up policies and procedures for the Company’s related party identification to properly identify, record and disclose related party

transactions;

up proper procedures for the Company’s fund disbursement process to ensure that cash is disbursed only upon proper authorization,

for valid business purposes, and that all disbursements are properly recorded.

We cannot provide assurance

43 unchanged sentences

been granted a grace period to file all the delinquent reports, including the filing of the Form 10-Q for the quarterly period ended December

31, 2022, on or before February 28, 2023.Given we did not file all the Reports within the grace period granted by the Panel, we may be

delisted from Nasdaq.

There can be also no assurance that our stock price will meet the minimum bid price requirement or we will meet

other requirements for continued listing on Nasdaq.

If our common stock is delisted from Nasdaq and we are unable to list our common stock

on another national securities exchange, we expect our common stock would be quoted on an over-the-counter market.

If this were to occur,

we and our stockholders could face significant material adverse consequences, including the limited availability of market quotations

for our common stock;

substantially decreased trading in our common stock;

decreased market liquidity of our common stock as a result

of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws;

an adverse effect

on our ability to issue additional securities or obtain additional financing in the future on acceptable terms, if at all;

potential loss

of confidence by investors, suppliers, partners, and employees and fewer business development opportunities;

and limited news and analyst

Additionally, the market price of our common stock may decline further, and stockholders may lose some or all of their investment.

31, 2022, on or before February 28, 2023.

March 8, 2023, the Company received a notice from Nasdaq Listing Qualifications department of Nasdaq stating that the Company no longer

complies with Nasdaq’s audit committee requirement under Nasdaq’s Listing Rule 5605 following the resignation of John Levy

from the Company’s board of directors and audit committee effective February 23, 2023.

Nasdaq advised the Company that in accordance

with Nasdaq’s Listing Rule 5605(c)(4), the Company has a cure period to regain compliance (i) until the earlier of the Company’s

next annual shareholders’ meeting or February 23, 2024;

or (ii) if the next annual shareholders’ meeting is held before August

22, 2023, then the Company must evidence compliance no later than August 22, 2023.

March 16, 2023, the Company received a formal notification from Nasdaq confirming that the Company had regained compliance with the Nasdaq

Listing Rule 5250(c)(1), which requires the Company to timely file all required periodic financial reports with the Securities and Exchange

Commission, and that the matter is now closed.

On July 7, 2023, the Company

received an Notice of Noncompliance Letter (the “Letter”) from Nasdaq stating that the Company was not in compliance with

Nasdaq Listing Rules due to its failure to timely hold an annual meeting of shareholders for the fiscal year ended June 30, 2022, which

is required to be held within twelve months of the Company’s fiscal year end under Nasdaq Listing Rule 5620(a) and 5810(c)(2)(G).

The Letter also states that the Company has 45 calendar days to submit a plan to regain compliance (the “Plan”) and if Nasdaq

accepts the Plan, it can grant the Company an exception of up to 180 calendar days from the fiscal year end, or until December 27, 2023,

to regain compliance.

Nasdaq requires the Plan to be submitted no later than August 21, 2023.

On July 13, 2023, the Company

received a notice from Nasdaq stating that the Company no longer complies with Nasdaq’s independent director and audit committee

requirements under Nasdaq’s Listing Rule 5605 following the resignation of Tieliang Liu from the Company’s board of directors

and audit committee effective July 3, 2023.

Nasdaq advised the Company that in accordance with Nasdaq’s Listing Rule 5605(c)(4),

the Company has a cure period to regain compliance (1) until the earlier of the Company’s next annual shareholders’ meeting

or July 3, 2024;

or (2) if the next annual shareholders’ meeting is held before January 2, 2024, then the Company must evidence

compliance no later than January 2, 2024.

In response to this notice, on July 31, 2023, the Company elected Mr.

Zhongliang Xie as a Class

II independent director to serve until the annual meeting of stockholders for the fiscal year 2023, to fill the vacancy on the Board resulting

from the resignation of Mr.

Tieliang Liu.

The Board appointed Mr.

Xie to serve as Chair of the Audit Committee, a member of the Compensation

Committee and a member of the Nominating and Corporate Governance Committee.

On July 13, 2023, the Company

received a notice from Nasdaq stating that the Company failed to regain compliance with respect to the minimum $1 bid price per share

requirement under Nasdaq Listing Rules during the 180 calendar days given by Nasdaq for the Company to regain compliance, which ended

on July 5, 2023.

However, Nasdaq has determined that the Company is eligible for an additional 180 calendar day period, or until January

2, 2024, to regain compliance.

Such determination is based on the Company meeting the continued listing requirement for market value of

publicly held shares and all other applicable requirements for initial listing on the Capital Market with the exception of the bid price

requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting

a reverse stock split, if necessary.

The Company intends to regain compliance with Nasdaq’s bid price requirement prior to the end

of the second bid price extension.

There can be also no assurance

that our stock price will meet the minimum bid price requirement or we will meet other requirements for continued listing on Nasdaq.

our common stock is delisted from Nasdaq and we are unable to list our common stock on another national securities exchange, we expect

our common stock would be quoted on an over-the-counter market.

If this were to occur, we and our stockholders could face significant

material adverse consequences, including the limited availability of market quotations for our common stock;

substantially decreased trading

in our common stock;

decreased market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq

and the loss of federal preemption of state securities laws;

an adverse effect on our ability to issue additional securities or obtain

additional financing in the future on acceptable terms, if at all;

potential loss of confidence by investors, suppliers, partners, and

employees and fewer business development opportunities;

and limited news and analyst coverage.

Additionally, the market price of our common

stock may decline further, and stockholders may lose some or all of their investment.

For additional risks relating

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors