Tipo de CambioTipo de Cambio
    Facebook Twitter Instagram
    Tendencias:
    • ¿Qué es ChatGPT y cómo funciona? ¿Qué la distingue a de otras herramientas de mensajería?
    • Biswap Ingresos pasivos y clave para funciones lucrativas
    • Liquidez, ¿Qué significa?, Liquidez vs Volumen
    • Carteras de Custodia, ¿Qué Son?, Ventajas, Desventajas
    • Sweatcoin rompe récord en venta pública en DAOMaker
    • Coinplay Crypto Casino Apuestas Deportivas
    Facebook Twitter Instagram
    Tipo de CambioTipo de Cambio
    Actualizar
    lunes, marzo 6
    • Inicio
    • Dinero
    • Bitcoin
    • Ethereum
    • Binance
    • Criptomonedas
      • Solana
      • Cardano
    • Polkadot
    • Shiba Inu
    Tipo de CambioTipo de Cambio
    Form 20-F Huitao Technology Co., por: 30 de junio
    Tipo de Cambio de Divisas

    Form 20-F Huitao Technology Co., por: 30 de junio

    usdgbp_lwn506By usdgbp_lwn506noviembre 17, 2019No hay comentarios374 Mins Read
    StreetInsider.com
    Share
    Facebook Twitter LinkedIn Pinterest Email
    Rate this post


    Entra en Wall Street con StreetInsider Premium. Reclama tu prueba gratuita de 1 semana aquí.


    UNIDO
    Estados

    VALORES
    Y COMISIÓN DE INTERCAMBIO

    WASHINGTON,
    D.C.20549

    FORMAR
    20-F

    ☐ REGISTRO
    DECLARACIÓN DE ACUERDO CON LA SECCIÓN 12 (b) O (g) DE LA LEY DE CAMBIO DE VALORES DE 1934

    O

    ☒ ANUAL
    INFORME DE CONFORMIDAD CON LA SECCIÓN 13 O 15 (d) DE LA LEY DE INTERCAMBIO DE VALORES DE 1934

    por
    el ejercicio fiscal finalizó el 30 de junio de 2019

    O

    ☐ TRANSICIÓN
    INFORME DE CONFORMIDAD CON LA SECCIÓN 13 O 15 (d) DE LA LEY DE INTERCAMBIO DE VALORES DE 1934

    por
    El período de transición de _________ a _____________.

    O

    ☐ CÁSCARA
    INFORME DE LA COMPAÑÍA DE CONFORMIDAD CON LA SECCIÓN 13 O 15 (d) DE LA LEY DE INTERCAMBIO DE VALORES DE 1934

    Fecha
    de evento que requiere este informe de empresa fantasma:

    Comisión
    número de expediente: 333-226308

    Huitao
    Tecnología Co., Ltd.

    (Exacto
    nombre del Registrante como se especifica en su Carta)

    Caimán
    Islas

    (Jurisdicción
    de incorporación u organización)

    9 9
    Cuarta carretera de circunvalación del noroeste

    Yingu
    Mansion Suite 1708, Distrito de Haidian

    Beijing,
    República Popular de China 100190

    (Habla a
    de las principales oficinas ejecutivas)

    Yang
    (Sean) Liu

    Jefe
    Oficial ejecutivo

    Tel:
    +86 10 82525361

    9 9
    Cuarta carretera de circunvalación del noroeste

    Yingu
    Mansion Suite 1708, Distrito de Haidian

    Beijing,
    República Popular de China 100190

    (Nombre,
    Número de teléfono, correo electrónico y / o fax y dirección de la persona de contacto de la empresa)

    Valores
    registrado o que se registrará de conformidad con la Sección 12 (b) de la Ley:

    Título de cada clase Símbolo (s) de comercio Nombre de cada intercambio en
    que se registró
    Acciones ordinarias, valor nominal $ 0.001 HHT Mercado de capitales Nasdaq

    Valores
    registrado o registrado de conformidad con la Sección 12 (g) de la Ley:

    Ninguna

    (Título
    de clase)

    Valores
    para lo cual existe una obligación de informar de conformidad con la Sección 15 (d) de la Ley:

    Ninguna

    (Título
    de clase)

    los
    El número de acciones en circulación de cada una de las clases de capital o acciones ordinarias del emisor al 30 de junio de 2019 era:
    7.174.626 acciones ordinarias, valor nominal $ 0.001 por acción.

    Indicar
    mediante una marca de verificación si el solicitante de registro es un emisor experimentado bien conocido, tal como se define en la Regla 405 de la Ley de Valores. si ☐ No ☒

    Si
    este informe es un informe anual o de transición, indique con una marca de verificación si el solicitante no está obligado a presentar informes de conformidad
    a la Sección 13 o 15 (d) de la Ley de Bolsa de Valores de 1934. Sí ☐ No ☒

    Indicar
    mediante una marca de verificación si el solicitante de registro (1) ha presentado todos los informes que debe presentar la Sección 13 o 15 (d) de la Bolsa de Valores
    Ley de 1934 durante los 12 meses anteriores (o por un período tan corto que se requirió que el solicitante de registro presente dichos informes),
    y (2) ha estado sujeto a dichos requisitos de presentación durante los últimos 90 días.
    Sí ☒ No ☐

    Indicar
    mediante una marca de verificación si el solicitante de registro ha enviado electrónicamente todos los archivos de datos interactivos que se deben presentar de conformidad
    a la Regla 405 del Reglamento S-T (§ 232.405 de este capítulo) durante los 12 meses anteriores (o por un período más corto que
    el solicitante de registro debía presentar dichos archivos).
    si ☒ No ☐

    Indicar
    mediante una marca de verificación si el solicitante de registro es un archivador acelerado grande, un archivador acelerado, un archivador no acelerado o un emergente
    empresa en crecimiento. Consulte la definición de "gran archivador acelerado", "archivador acelerado" y "crecimiento emergente
    empresa "en la Regla 12b-2 de la Ley de Intercambio.

    Grande
    archivador acelerado ☐ Archivador acelerado ☐ Archivador no acelerado ☒ Emergente
    empresa de crecimiento ☐

    Si
    una compañía de crecimiento emergente que prepara sus estados financieros de acuerdo con los US GAAP, indique con una marca de verificación si
    El solicitante de registro ha optado por no utilizar el período de transición extendido para cumplir con las normas de contabilidad financiera nuevas o revisadas †
    provisto de conformidad con la Sección 13 (a) de la Ley de Intercambio. ☐

    Indicar
    mediante una marca de verificación qué base de contabilidad ha utilizado el registratario para preparar los estados financieros incluidos en esta presentación:

    ☒ NOSOTROS.
    GAAP ☐ Normas Internacionales de Información Financiera emitidas por la Contabilidad Internacional
    Junta de normas ☐ Otro ☐

    Si
    Se ha marcado "Otro" en respuesta a la pregunta anterior, indique con una marca de verificación qué elemento del estado financiero
    el solicitante de registro ha elegido seguir: Artículo 17 ☐ Artículo 18 ☐

    Si
    Este es un informe anual, indique mediante una marca de verificación si el solicitante de registro es una compañía fantasma (como se define en la Regla 12b-2 del Intercambio
    Actuar). si ☐ No ☒

    Huitao
    TECNOLOGÍA CO., LTD.

    FORMAR
    INFORME ANUAL 20-F

    MESA
    De contenidos

    PARTE
    yo

    CIERTO
    INFORMACIÓN

    En
    este informe anual en el Formulario 20-F, a menos que se indique lo contrario, "nosotros", "nos", "nuestro", la "Compañía"
    y "Huitao Technology" se refieren a Huitao Technology Co., Ltd., una compañía organizada en las Islas Caimán, su predecesora
    entidades y sus filiales.

    A no ser que
    el contexto indica lo contrario, todas las referencias a "China" y "China" se refieren a la República Popular
    de China, todas las referencias a "Renminbi" o "RMB" son a la moneda legal de la República Popular
    de China, todas las referencias a "EE. UU. dólares "," dólares "y" $ "corresponden a la moneda legal de
    los Estados Unidos. Este informe anual contiene traducciones de montos de Renminbi a dólares estadounidenses a tasas específicas únicamente para
    La conveniencia del lector. No hacemos ninguna representación de que las cantidades de Renminbi o dólares estadounidenses a las que se hace referencia en este informe puedan
    han sido o podrían convertirse a dólares estadounidenses o renminbi, según sea el caso, a una tasa particular o en absoluto. En octubre
    31, 2019, la tasa de compra en efectivo anunciada por el Banco Popular de China fue de RMB7.0395 a $ 1.00.

    A no ser que
    indicado lo contrario, referencias a

    ● "China,"
        "Chino" y "RPC" son referencias a la República Popular de China;
    ● "BVI"
        se refiere a las Islas Vírgenes Británicas;
    ● "Tecnología Huitao", "Huitao", "la Compañía", "nosotros", "nosotros"
    o "nuestro" son referencias al negocio combinado de Huitao Technology Co., Ltd. y sus subsidiarias de propiedad absoluta,
    BVI-ACM, CACM y China-ACMH, así como su entidad VIE Xin Ao;
    ● "BVI-ACM"
        se refiere a Xin Ao Construction Materials, Inc;
    ● "CACM" se refiere a CACM Group NY, Inc.
    ● "China-ACMH"
        se refiere a Beijing Ao Hang Construction Materials Technology Co., Ltd .;
    ● "Xin Ao" se refiere a Beijing Xin Ao Concrete Group Co., Ltd .;

    MIRANDO HACIA ADELANTE
    Declaraciones

    Esta
    el informe contiene "declaraciones prospectivas" a los efectos de las disposiciones de seguridad de los valores privados
    Ley de Reforma de Litigios de 1995 que representa nuestras creencias, proyecciones y predicciones sobre eventos futuros. Todas las declaraciones otras
    que las declaraciones de hechos históricos son "declaraciones a futuro", incluidas las proyecciones de ganancias, ingresos
    u otros elementos financieros, cualquier declaración de los planes, estrategias y objetivos de gestión para operaciones futuras, cualquier declaración
    con respecto a nuevos proyectos propuestos u otros desarrollos, cualquier declaración con respecto a condiciones o desempeño económico futuro, cualquier
    declaraciones de creencias, metas, estrategias, intenciones y objetivos de la administración, y cualquier declaración de suposiciones subyacentes
    cualquiera de los anteriores Palabras como "may", "will", "should", "could", "would",
    "Predice", "potencial", "continuar", "espera", "anticipa", "futuro",
    "Intenciones", "planes", "cree", "estimaciones" y expresiones similares, así como
    declaraciones en tiempo futuro, identifique declaraciones prospectivas.

    Estas
    Las declaraciones son necesariamente subjetivas e implican riesgos conocidos y desconocidos, incertidumbres y otros factores importantes que podrían
    causar que nuestros resultados reales, desempeño o logros, o resultados de la industria, difieran materialmente de cualquier resultado futuro, desempeño
    o logros descritos o implícitos en tales declaraciones. Los resultados reales pueden diferir materialmente de los resultados esperados descritos
    en nuestras declaraciones prospectivas, incluso con respecto a la medición correcta e identificación de factores que afectan nuestro negocio
    o el alcance de su impacto probable, y la precisión e integridad de la información disponible públicamente con respecto a
    los factores en los que se basa nuestra estrategia comercial o el éxito de nuestro negocio. Dadas estas incertidumbres, no debe
    deposite una confianza indebida en estas declaraciones prospectivas. Estas declaraciones prospectivas incluyen, entre otras cosas, declaraciones
    relativa a:

    ● nuestra
        expectativas con respecto al mercado de nuestros productos y servicios concretos;
    ● nuestra
        expectativas con respecto al continuo crecimiento de la industria del concreto;
    ● nuestra
        creencias sobre la competitividad de nuestros productos;
    ● nuestra
        expectativas con respecto a la expansión de nuestra capacidad de fabricación;
    ● nuestra
        expectativas con respecto al aumento en el crecimiento de los ingresos y nuestra capacidad de mantener la rentabilidad como resultado de los aumentos en
        nuestros volúmenes de producción;
    ● nuestra
        desarrollo comercial futuro, resultados de operaciones y condición financiera;
    ● competencia
        de otros fabricantes de productos de hormigón;
    ● el
        pérdida de cualquier miembro de nuestro equipo de gestión;
    ● nuestras expectativas con respecto a litigios pendientes y reclamos de garantía;
    ● nuestra
    expectativas con respecto al financiamiento de nuestro negocio;
    ● nuestra
        capacidad de integrar filiales y operaciones adquiridas en operaciones existentes;
    ● mercado
        condiciones que afectan nuestro capital social;
    ● nuestra
        capacidad de implementar con éxito nuestra estrategia de adquisición selectiva;
    ● cambios
        en condiciones económicas generales;
    ● cambios
        en las normas contables o en la aplicación de tales normas;
    ● alguna
    incumplimiento de la presentación periódica y otros requisitos de The Nasdaq Stock Market, o Nasdaq, para continuar cotizando;
    ● alguna
        no identificar y remediar las debilidades materiales u otras deficiencias en nuestro control interno y control de divulgación
        sobre informes financieros;

    ● el
        inicio de cualquier litigio civil, procedimientos regulatorios, acciones gubernamentales de cumplimiento u otros efectos adversos como resultado
        de las reformulaciones de nuestro Informe Anual en el formulario 10-K para el año fiscal que finalizó el 30 de junio de 2017 e informes trimestrales
        en el Formulario 10-Q para los períodos que terminaron el 31 de marzo de 2018, el 31 de diciembre de 2017 y el 30 de septiembre de 2017 (en lo sucesivo denominado "Reexpresado
        Informes "o" Reexpresión ").

    Mirando hacia adelante
    las declaraciones no deben leerse como una garantía de rendimiento o resultados futuros, y no serán necesariamente indicaciones precisas
    de si, o los tiempos en que, nuestro rendimiento o resultados pueden lograrse. Las declaraciones prospectivas se basan en información
    disponible en el momento en que se hacen esas declaraciones y la creencia de la gerencia a partir de ese momento con respecto a eventos futuros, y
    están sujetos a riesgos e incertidumbres que podrían causar que el desempeño real o los resultados difieran materialmente de los expresados
    en o sugerido por las declaraciones prospectivas. Los factores importantes que podrían causar tales diferencias incluyen, pero no están limitados
    a, aquellos factores discutidos bajo los encabezados "Factores de riesgo", "Revisión operativa y financiera y perspectivas"
    y en otra parte de este informe.

    ARTICULO
        1)
    IDENTIDAD
        DE DIRECTORES, DIRECCIÓN SUPERIOR Y ASESORES

    No
    Aplicable.

    ARTICULO
        2)
    OFERTA
        ESTADÍSTICA Y CALENDARIO ESPERADO

    No
    Aplicable.

    3.A.
    Datos financieros seleccionados

    los
    La siguiente tabla presenta la información financiera consolidada seleccionada de nuestra empresa. Los estados consolidados seleccionados
    de datos integrales de ingresos para los años terminados el 30 de junio de 2019, 2018 y 2017 y los datos del balance general consolidado seleccionados
    al 30 de junio de 2019 y 2018 se han derivado de nuestros estados financieros consolidados auditados, que se incluyen en este
    informe anual que comienza en la página F-1. Nuestros estados financieros consolidados auditados se preparan y presentan de acuerdo con
    principios de contabilidad generalmente aceptados en los Estados Unidos, o US GAAP. Nuestros resultados históricos no necesariamente indican
    resultados esperados para cualquier período futuro. Debe leer los siguientes datos financieros seleccionados junto con el consolidado
    estados financieros y notas relacionadas y "Punto 5. Revisión operativa y financiera y perspectivas" incluidos en otra parte
    en este informe

    los
    La siguiente tabla presenta nuestro resumen de los estados consolidados de resultados e información integral de resultados:

    Por los años terminados
    2019 2018 2017
    Ingresos PS 43,651,923 PS 45,734,647 PS 45,048,413
    Costo de ingresos 39,093,782 39,022,360 43,953,477
    Beneficio bruto 4,558,141 6.712.287 1,094,936
    Provisión para cuentas incobrables (2,559,785 ) (2,184,221 ) (3,352,063 )
    Gastos de venta, generales y administrativos. (5,996,609 ) (5,301,168 ) (5.380.702 )
    Gastos de investigación y desarrollo. (223,668 ) (1,182,133 ) (846,438 )
    Gastos de compensación de acciones (4,592,200 ) (1,388,501 ) (289,000 )
    Pérdida de operaciones (8.814.121 ) (3,343,736 ) (8,773,267 )
    Otros gastos, neto (5,574,409 ) (4,056,229 ) (2,264,853 )
    Pérdida antes de la provisión para impuestos sobre la renta (14.388.530 ) (7.399.965 ) (11,038,120 )
    Provisión para impuestos sobre la renta – – –
    Pérdida neta PS (14.388.530 ) PS (7.399.965 ) PS (11,038,120 )

    los
    La siguiente tabla presenta los datos resumidos de nuestro balance general:

    Al 30 de junio de
    2019 2018
    Efectivo y equivalentes de efectivo PS 347,486 PS 1,098,691
    Cuentas y documentos por cobrar, neto (incluida la parte relacionada) 37,010,458 43.322.463
    Otros activos circulantes 15,147,569 6.230.520
    Planta y equipo, neto 1,659,520 2,748,409
    Los activos totales 54,165,033 53,400,083
    Responsabilidad total (53,644,235 ) (43,697,875 )
    Equidad total de los accionistas PS 520,798 PS 9,702,208

    3.B.
    Capitalización y endeudamiento

    No
    Aplicable.

    3.C.
    Razones para la oferta y uso de los ingresos

    No
    Aplicable.

    3.D.
    Factores de riesgo

    Un
    La inversión en nuestras acciones ordinarias implica un alto grado de riesgo. Debe considerar cuidadosamente los riesgos e incertidumbres descritos
    a continuación junto con toda la otra información contenida en este informe anual, incluidos los asuntos discutidos bajo los títulos
    “Declaraciones prospectivas” y “Revisión y perspectivas operativas y financieras” antes de que decida invertir
    en nuestro
    acciones ordinarias. Somos una compañía holding con operaciones sustanciales en China y estamos sujetos a un
    entorno regulatorio que en muchos aspectos difiere de los Estados Unidos. Si alguno de los siguientes riesgos, o cualquier otro riesgo
    e incertidumbres que actualmente no son previsibles para nosotros, realmente ocurren, nuestro negocio, condición financiera, resultados de operaciones,
    La liquidez y nuestras perspectivas de crecimiento futuro podrían verse afectadas de manera adversa y material.

    Riesgos
    Relacionado con nuestro negocio

    Consideraciones de liquidez y preocupación actual

    Al evaluar la liquidez de la Compañía,
    La Compañía monitorea y analiza su efectivo disponible y sus compromisos operativos y de gastos de capital. La liquidez de la empresa
    las necesidades son cumplir con sus requisitos de capital de trabajo, gastos operativos y obligaciones de gastos de capital.

    La empresa se dedica a la producción de productos avanzados.
    Materiales de construcción para infraestructura a gran escala, desarrollos comerciales y residenciales. El negocio de la Compañía es
    capital intensivo y la Compañía está altamente apalancada. Financiamiento de la deuda en forma de préstamos bancarios a corto plazo, préstamos relacionados
    las partes y las notas de aceptación bancaria se han utilizado para financiar los requisitos de capital de trabajo y los gastos de capital de
    la compañia. El déficit de trabajo de la Compañía era de aproximadamente $ 1.1 millones al 30 de junio de 2019. Al 30 de junio de 2019, la Compañía
    tenía efectivo disponible de aproximadamente $ 0.3 millones, y los activos corrientes restantes se componen principalmente de cuentas por cobrar y pagos anticipados
    y avances.

    Aunque la Compañía cree que puede darse cuenta
    sus activos actuales en el curso normal de los negocios, la capacidad de la Compañía de pagar sus obligaciones actuales dependerá de
    La realización futura de sus activos corrientes. La gerencia ha considerado su experiencia histórica, el entorno económico, las tendencias.
    en la industria de la construcción en la RPC, la cobranza esperada de sus cuentas por cobrar y otras cuentas por cobrar y la realización
    de los pagos anticipados en inventario, y proporcionó una reserva para cuentas incobrables al 30 de junio de 2019. La Compañía espera darse cuenta
    el saldo de sus activos corrientes, neto de la reserva para cuentas de cobro dudoso dentro del ciclo operativo normal de doce meses.

    Sin embargo, la Compañía está involucrada en varios
    demandas, reclamos y disputas relacionadas con sus operaciones y las garantías personales de sus funcionarios a las entidades afiliadas de su propiedad
    por ellos. La Compañía defiende activamente estas acciones e intenta mitigar la exposición de la Compañía a cualquier responsabilidad.
    en exceso de la provisión actual de aproximadamente $ 6.6 millones, (véase la Nota 14 en las notas adjuntas a la información financiera consolidada
    declaraciones). El resultado final de estas acciones pendientes no se puede determinar actualmente, pero actualmente la gerencia opina
    que cualquier posible responsabilidad adicional no tendría un impacto material en la posición financiera consolidada de la Compañía.
    Sin embargo, debido a las incertidumbres con los litigios, el sistema legal de la RPC, las reclamaciones y las disputas, es al menos razonablemente posible
    La opinión de la gerencia sobre el resultado podría cambiar en el corto plazo.

    Además, al 30 de junio de 2019, la Compañía
    VIE, Xin Ao, estuvo sujeto a varios juicios civiles con juicios potenciales por un monto aproximado de $ 26.7 millones (ver Nota
    14 en las notas adjuntas a los estados financieros consolidados) y la probabilidad del resultado de estas demandas no puede
    Actualmente se determinará. Estas demandas involucran a la Compañía principalmente debido a las garantías personales del Sr. Xianfu Han y el Sr.
    Weili He, los accionistas y ex funcionarios de la Compañía. Porque el Sr. Han y el Sr. He eran los accionistas controladores de
    Xin Ao, los demandantes incluyeron a Xin Ao en sus quejas conjuntas. Xin Ao no estuvo involucrado en la mayoría de las demandas, pero fue nombrado como
    un acusado conjunto en las demandas. Como resultado, Xin Ao podría estar expuesto a cualquier juicio en el futuro según las leyes de la RPC. señor.
    Han y el Sr.He acordaron indemnizar a la Compañía por cualquier monto que Xin Ao deba pagar. En caso de que el resultado de estas demandas
    exigir a Xin Ao que pague porque los otros coacusados ​​de las demandas y el Sr. Han y el Sr.He no pudieron liquidar sus gastos personales.
    activos o su interés de propiedad en sus compañías privadas a tiempo para pagar los juicios, el trabajo de la Compañía
    el déficit al 30 de junio de 2019 podría incrementarse de aproximadamente $ 1.1 millones a un déficit operativo neto de aproximadamente $ 27.8
    millón.

    Además, la Compañía está en pago y
    incumplimiento técnico bajo su acuerdo de préstamo bancario para el cual el banco ha presentado ante los tribunales de la RPC que ha emitido un aviso de demanda
    en mayo de 2019 para el reembolso inmediato de los préstamos pendientes. No se han realizado reembolsos y el saldo al 30 de junio de 2019
    es de aproximadamente $ 24.7 millones.

    La gerencia de la Compañía ha considerado
    si hay un problema de empresa en funcionamiento debido a las pérdidas recurrentes de la Compañía por las operaciones, el incumplimiento de la Compañía
    préstamos bancarios, los cargos por reclamos estimados y la posible exposición adicional por acciones pendientes contra la Compañía que actualmente se encuentra
    desconocido. La gerencia ha determinado que hay dudas sustanciales sobre nuestra capacidad de continuar como empresa en funcionamiento. Si la empresa
    no puede generar ingresos significativos, asegurar la paciencia continua de su banco y / o financiamiento adicional o resolver
    cualquier cargo de reclamo estimado pendiente, se le puede solicitar a la Compañía que suspenda o reduzca sus operaciones. La empresa financiera
    Las declaraciones no incluyen ajustes que podrían resultar del resultado de esta incertidumbre.

    La gerencia está tratando de aliviar la marcha
    preocupan el riesgo a través del financiamiento de capital, obteniendo apoyo financiero adicional y compromisos de garantía de crédito y reestructuración de deuda
    para la mayoría de los pasivos por litigios.

    Nuestra
    El negocio está sujeto al riesgo de concentración de proveedores.

    Nuestra
    los cinco principales proveedores proporcionan aproximadamente el 34.9% del abastecimiento de las materias primas para nuestro negocio de producción de concreto para
    año terminado el 30 de junio de 2019. Como resultado de esta concentración en nuestra cadena de suministro, nuestros negocios y operaciones serían negativamente
    afectado si alguno de nuestros proveedores clave experimentara una interrupción significativa que afecte el precio, la calidad, la disponibilidad o el tiempo
    entrega de sus productos. La pérdida parcial o completa de uno de estos proveedores, o un cambio adverso significativo en nuestra relación
    con cualquiera de estos proveedores, podría resultar en la pérdida de ingresos, costos adicionales y demoras en la distribución que podrían dañar nuestro negocio y
    relaciones del cliente. Además, la concentración en nuestra cadena de suministro puede exacerbar nuestra exposición a los riesgos asociados con el
    terminación por parte de proveedores clave de nuestros acuerdos de distribución o cualquier cambio adverso en los términos de dichos acuerdos, que podría
    tener un impacto adverso en nuestros ingresos y rentabilidad.

    Nosotros
    puede experimentar accidentes graves en el curso de nuestras operaciones, lo que puede causar daños materiales importantes y lesiones personales.

    Significativo
    Los accidentes y desastres naturales relacionados con la industria pueden causar interrupciones en varias partes de nuestras operaciones, o pueden resultar en
    daños a la propiedad o al medio ambiente, aumento de los gastos operativos o pérdida de ingresos. La ocurrencia de tales accidentes y la
    las consecuencias resultantes pueden no estar cubiertas adecuadamente, o en absoluto, por las pólizas de seguro que tenemos. De acuerdo con la costumbre
    En China, no contamos con ningún seguro de interrupción comercial o seguro de responsabilidad civil por daños personales
    o daños ambientales derivados de accidentes en nuestra propiedad o relacionados con nuestras operaciones que no sean nuestros automóviles. Pérdidas
    o los pagos incurridos pueden tener un efecto adverso importante en nuestro desempeño operativo si tales pérdidas o pagos no son totalmente
    asegurado.

    Nuestra
    La expansión planificada y los proyectos de mejora técnica podrían retrasarse o verse afectados negativamente, entre otras cosas, por fallas en
    recibir aprobaciones regulatorias, dificultades para obtener financiamiento suficiente, dificultades técnicas o recursos humanos u otros
    restricciones

    Nosotros
    pretenden expandir nuevas instalaciones de producción durante los próximos años. Los costos proyectados para nuestra expansión planificada y técnica
    Los proyectos de mejora y expansión pueden exceder los contemplados originalmente. Ahorro de costos y otros beneficios económicos esperados
    de estos proyectos no puede materializarse como resultado de dichos retrasos, sobrecostos o cambios en las circunstancias del mercado.

    A
    Para realizar mejoras en nuestra planta actual, no es necesario que solicitemos la aprobación reglamentaria. Sin embargo, para construir
    una nueva planta de concreto, necesitaremos (i) solicitar una licencia comercial de la Administración local de Industria y Comercio,
    (ii) solicite un Certificado de Calificación de la Industria del Comité de Construcción Municipal local y (iii) reciba
    aprobación de la Oficina de Protección Ambiental local en el área del distrito correspondiente. No hay garantía de que podamos
    para obtener estas aprobaciones regulatorias de manera oportuna o en absoluto.

    Nosotros
    No podemos asegurarle que nuestra estrategia de crecimiento tendrá éxito.

    Uno
    Una de nuestras estrategias es crecer aumentando la distribución y las ventas de nuestros productos penetrando en los mercados existentes en
    China y entrando en nuevos mercados geográficos en China. Sin embargo, existen muchos obstáculos para ingresar a estos nuevos mercados, incluidos, pero
    no se limita a la competencia de compañías establecidas en tales mercados existentes en China. Por lo tanto, no podemos asegurarle que
    podremos superar con éxito tales obstáculos y establecer nuestros productos en cualquier mercado adicional. Nuestra incapacidad para
    implementar esta estrategia de crecimiento con éxito puede tener un impacto negativo en nuestro crecimiento, condición financiera futura, resultados de operaciones
    o flujos de efectivo.

    Si
    fallamos en administrar efectivamente nuestro crecimiento y expandimos nuestras operaciones, nuestro negocio, condición financiera, resultados de operaciones y
    Las perspectivas podrían verse negativamente afectadas.

    Nuestra
    El éxito futuro depende de nuestra capacidad de expandir nuestro negocio para abordar el crecimiento de la demanda de nuestros productos y servicios. En orden
    Para maximizar el crecimiento potencial en nuestros mercados actuales y potenciales, creemos que debemos expandir nuestra fabricación y comercialización
    operaciones Nuestra capacidad para lograr estos objetivos está sujeta a riesgos e incertidumbres importantes, que incluyen:

    ● el
        Necesidad de fondos adicionales para construir instalaciones de fabricación adicionales, que es posible que no podamos obtener de manera razonable
        términos o en absoluto;

    ● retrasos
        y sobrecostos como resultado de una serie de factores, muchos de los cuales pueden estar fuera de nuestro control, como problemas con el equipo
        proveedores y servicios de fabricación proporcionados por terceros fabricantes o subcontratistas;

    ● nuestra
        recibo de las aprobaciones o permisos gubernamentales necesarios que puedan requerirse para expandir nuestras operaciones de manera oportuna
        o en absoluto;

    ● desviación
        de atención gerencial significativa y otros recursos; y

    ● fracaso
        para ejecutar nuestro plan de expansión de manera efectiva.

    A
    Para dar cabida a nuestro crecimiento, necesitaremos implementar una variedad de sistemas operativos y financieros nuevos y mejorados, procedimientos,
    y controles, incluidas las mejoras en nuestros sistemas de contabilidad y otros sistemas de gestión interna, al dedicar recursos adicionales
    a nuestra función de informes y contabilidad, y mejoras a nuestro sistema de mantenimiento de registros y seguimiento de contratos. También necesitaremos
    para reclutar más personal y capacitar y administrar nuestra creciente base de empleados. Además, nuestra gerencia deberá mantener
    y expandir nuestras relaciones con nuestros clientes existentes y encontrar nuevos clientes para nuestros servicios. No hay garantía de que nuestro
    la gerencia puede tener éxito en mantener y expandir estas relaciones.

    Si
    nos encontramos con cualquiera de los riesgos descritos anteriormente, o si de otra manera no podemos establecer u operar con éxito capacidad adicional
    o aumentar nuestra producción, es posible que no podamos hacer crecer nuestro negocio e ingresos, reducir nuestros costos operativos, mantener nuestra competitividad
    o mejorar nuestra rentabilidad y, en consecuencia, nuestro negocio, condición financiera, resultados de operaciones y perspectivas serán
    afectado negativamente.

    Si
    no podemos estimar con precisión los riesgos o costos generales asociados con un proyecto en el que estamos haciendo una oferta, podemos lograr
    una ganancia menor a la anticipada o incluso incurrir en una pérdida en el contrato.

    Sustancialmente
    Todos nuestros ingresos y cartera de contratos se derivan típicamente de contratos de precio unitario fijo. Los contratos de precio unitario fijo requieren
    nosotros para realizar el contrato por un precio unitario fijo independientemente de nuestros costos reales. Como resultado, obtenemos una ganancia en estos
    solo se contrae si estimamos con éxito nuestros costos y luego controlamos con éxito los costos reales y evitamos sobrecostos. Si nuestro
    los estimados de costos para un contrato son inexactos, o si no ejecutamos el contrato dentro de nuestros estimados de costos, entonces los sobrecostos
    puede hacer que el contrato no sea tan rentable como esperábamos, o puede causarnos pérdidas. Esto, a su vez, podría negativamente
    afectar nuestro flujo de efectivo, ganancias y posición financiera.

    los
    los costos incurridos y las ganancias brutas realizadas en esos contratos pueden variar, a veces sustancialmente, de las proyecciones originales debidas
    a una variedad de factores, que incluyen, entre otros:

    ● en el sitio
        condiciones que difieren de las asumidas en la oferta original;
    ● retrasos
        causado por las condiciones climáticas;
    ● más tarde
        fechas de inicio del contrato de lo esperado cuando ofertamos por el contrato;
    ● contrato
        modificaciones que crean costos no anticipados no cubiertos por las órdenes de cambio;
    ● cambios
        en disponibilidad, proximidad y costos de materiales, incluidos acero, concreto, agregados y otros materiales de construcción (tales
        como piedra, grava y arena), así como combustible y lubricantes para nuestros equipos;
    ● disponibilidad
        y nivel de habilidad de los trabajadores en la ubicación geográfica de un proyecto;
    ● nuestra
        incumplimiento de los proveedores o subcontratistas;
    ● fraude
        o robo cometido por nuestros empleados;
    ● mecánico
        problemas con nuestra maquinaria o equipo;
    ● citas
        emitido por autoridades gubernamentales
    ● dificultades
        en la obtención de los permisos o aprobaciones gubernamentales requeridos;
    ● cambios
        en las leyes y reglamentos aplicables; y
    ● reclamaciones
        o demandas de terceros que aleguen daños derivados de nuestro trabajo o del proyecto del que forma parte nuestro trabajo.

    Económico
    Las bajas o reducciones en el financiamiento gubernamental de proyectos de infraestructura podrían reducir significativamente nuestros ingresos.

    Nuestra
    el negocio depende en gran medida de la cantidad de trabajo de infraestructura financiado por varias entidades gubernamentales, que, a su vez, depende
    sobre la condición general de la economía, la necesidad de infraestructura nueva o de reemplazo, las prioridades asignadas a varios proyectos
    financiado por entidades gubernamentales y niveles de gasto del gobierno nacional o local. Disminución de la financiación gubernamental de la infraestructura.
    los proyectos podrían disminuir el número de contratos de construcción civil disponibles y limitar nuestra capacidad de obtener nuevos contratos, que
    podría reducir nuestros ingresos y ganancias.

    Nuestra
    la planta de producción de concreto en Beijing puede estar sujeta a un plan general de rezonificación de la ciudad que, si se implementa en el futuro, puede requerir
    nosotros para reubicar o posiblemente cerrar permanentemente parte de esta planta.

    Nuestra
    la planta de producción de concreto en Beijing puede estar sujeta a un plan general de rezonificación de la ciudad que ha sido preparado por el municipio de Beijing
    gobierno. Según el plan de rezonificación, se pretende que las propiedades donde se ubica esta planta se rezonifiquen de la industria
    para uso comercial. Si y cuando se implementa con respecto a esas propiedades, el plan de rezonificación puede requerir que desocupemos estas propiedades
    y reubicar la planta. En caso de que tengamos que desalojar la planta, implementaríamos ciertas estrategias para minimizar
    pérdida de capacidad de producción durante la reubicación. No puede garantizarse que nuestras estrategias para hacer frente a la reubicación del
    las instalaciones pueden implementarse, o que tales estrategias pueden implementarse antes de que se nos requiera desocupar la planta debido a la
    plan general propuesto de rezonificación de la ciudad. Si se nos exige reubicar la planta, nuestros resultados de operación y condición financiera
    puede verse afectada material y negativamente.

    Nuestra
    La exposición a clientes o proveedores con problemas financieros podría dañar nuestro negocio, nuestra situación financiera y nuestros resultados operativos.

    Nosotros
    Produzca, venda y entregue concreto premezclado, y confíe en proveedores, que en el pasado y en el futuro puedan tener experiencia financiera
    dificultades, particularmente a la luz de las condiciones recientes en los mercados de crédito y la economía general que afectaron el acceso a
    capital y liquidez. Como resultado, dedicamos recursos significativos para monitorear las cuentas por cobrar y los saldos de inventario con ciertas
    de nuestros clientes Si nuestros clientes experimentan dificultades financieras, podríamos tener dificultades para recuperar las cantidades que nos deben
    estos clientes, o la demanda de nuestros servicios por parte de estos clientes podría disminuir. Además, el gobierno endureció monetaria
    política para regular la inflación, lo que a su vez llevó a retrasos en el pago de nuestros proyectos de construcción de viviendas. Por preocupación
    sobre la inflación, el gobierno chino comenzó a endurecer su política monetaria a partir de octubre de 2010, lo que afectó a los bienes raíces.
    y las industrias de construcción negativamente. Como resultado, nuestras cuentas por cobrar aumentaron y la provisión para cuentas incobrables
    También aumentó. Algunos de nuestros clientes parecían sufrir una disminución de los negocios y la escasez de efectivo. El subsidio para dudosos
    las cuentas aumentaron a aproximadamente $ 21.2 millones al 30 de junio de 2019, en comparación con aproximadamente $ 19.3 millones al 30 de junio,
    2018. De hecho, nuestra provisión para cuentas incobrables, como un porcentaje de nuestras cuentas por cobrar totales, ha aumentado de aproximadamente
    31% al 30 de junio de 2018, a aproximadamente 36.5% al ​​30 de junio de 2019. La imposibilidad de cobrar nuestras cuentas por cobrar pendientes
    could adversely affect our operating cash flows and reduce our working capital. As a result, we may suffer material write-offs
    on our accounts receivable. The inability of our suppliers to supply us with needed raw materials could adversely affect our production
    process and therefore, we may not be able to fulfill our contract arrangements with customers.

    We
    rely on internal models to manage risk, to provide accounting estimates and to make other business decisions. Our results could
    be adversely affected if those models do not provide reliable estimates or predictions of future activity.

    We
    rely heavily on internal models in making a variety of decisions crucial to the successful operation of our business, including
    the allowance for doubtful accounts and other accounting estimates. It is therefore important that our models are accurate, and
    any failure in this regard could have a material adverse effect on our results. Models are inherently imperfect predictors of
    actual results because they are based on historical data available to us and our assumptions about factors such as credit demand,
    payment rates, default rates, delinquency rates and other factors that may overstate or understate future experience. Our models
    could produce unreliable results for a number of reasons, including the limitations of historical data to predict results due
    to unprecedented events or circumstances, invalid or incorrect assumptions underlying the models, the need for manual adjustments
    in response to rapid changes in economic conditions, incorrect coding of the models, incorrect data being used by the models or
    inappropriate application of a model to products or events outside of the model’s intended use. In particular, models are
    less dependable when the economic environment is outside of historical experience, as has been the case recently. Due to the factors
    described above and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”,
    we may, among other things, experience actual write-offs that exceed our estimates and which are possibly greater than our allowance
    for doubtful accounts, or which require material adjustments to the allowance. Unanticipated and excessive default and write-off
    experience can adversely affect our profitability and financial condition and adversely affect our ability to finance our business.

    Our
    business will be damaged if project contracts with the Chinese government, for which we may act as a subcontractor are cancelled.

    We
    do not enter into any contracts directly with the Chinese government. For contracts that are funded by the Chinese government,
    we place bids and enter into subcontracts with the private entity prime contractor. A sudden cancellation of a prime contract,
    and in turn our subcontract, could cause our equipment and work crews to remain idle for a significant period of time until other
    comparable work becomes available. This idle time could have a material adverse effect on our business and results of operations.

    Our
    industry is highly competitive, with numerous larger companies with greater resources competing with us, and our failure to compete
    effectively could reduce the number of new contracts awarded to us or adversely affect our margins on contracts awarded.

    Our
    competition includes a number of state-owned and large private PRC-based manufacturers and distributors that produce and sell
    products similar to ours. We compete primarily on the basis of quality, technological innovation and price. Essentially all of
    the contracts on which we bid are awarded through a competitive bid process, with awards generally being made to the lowest bidder,
    though other factors such as shorter schedules or prior experience with the customer are often just as important. Within our markets,
    we compete with many national, regional and local state-owned and private construction firms. Some of these competitors have achieved
    greater market penetration or have greater financial and other resources than us. In addition, there are a number of larger national
    companies in our industry that could potentially establish a presence in our markets and compete with us for contracts. As a result,
    we may need to accept lower contract margins in order to compete against these competitors. If we are unable to compete successfully
    in our markets, our relative market share and profits could be reduced.

    We
    could face increased competition in our principal market.

    Our
    principal market, Beijing, has enjoyed stronger economic growth and a higher demand for construction than other regions of China.
    As a result, we believe that competitors will try to expand their sales and build up their distribution networks in our principal
    market. We anticipate that this trend will continue and likely accelerate. Increased competition may have a material adverse effect
    on our financial condition and results of operations.

    Our
    dependence on subcontractors and suppliers of materials could increase our costs and impair our ability to compete on contracts
    on a timely basis or at all, which would adversely affect our profits and cash flow.

    We
    rely on third-party subcontractors to perform some of the work on many of our contracts. We do not bid on contracts unless we
    have the necessary subcontractors committed for the anticipated scope of the contract and at prices that we have included in our
    bid. Therefore, to the extent that we cannot obtain third-party subcontractors, our profits and cash flow will suffer.

    We
    may have inadvertently violated Section 13(k) of the Exchange Act and may be subject to sanctions as a result.

    Section
    13(k) of the Securities Exchange Act of 1934 (Section 402 of the Sarbanes-Oxley Act of 2002, (“Sarbanes-Oxley”) provides
    that it is unlawful for a company that has a class of securities registered under Section 12 of the Exchange Act to, directly
    or indirectly, including through any subsidiary, extend or maintain credit in the form of a personal loan to or for any director
    or executive officer of the company. We overlooked this prohibition and Xin Ao, our VIE, inadvertently made certain advances and
    provided a guarantee to Beijing Lianlv Technology Group Co. Ltd., an entity controlled by Mr. Han and Mr. He our former chief
    executive and former chief financial officers. Such advance and guarantee may have violated Section 13(k). Issuers who are found
    to have violated Section 13(k) may be subject to civil sanctions, including injunctive remedies and monetary penalties, as well
    as criminal sanctions. The imposition of any of such sanctions on the Company could have a material adverse effect on our business,
    financial position, results of operations or cash flows.

    We
    have identified material weaknesses in our internal control over financial reporting, and we cannot provide assurances that these
    weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future. If our internal
    control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately
    report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose
    confidence in our reported financial information and which may lead to a decline in our stock price.

    En
    October 6, 2018, the Audit Committee of the Board of Directors, after consultation with the Company’s then independent registered
    public accounting firm, Friedman LLP (“Friedman”) concluded, that the Company’s audited financial statements
    at and for the year ended June 30, 2017 contained in the Company’s Annual Report on Form 10-K originally filed with the
    SEC on as well the unaudited financial statements at and for the periods ended March 31, 2018, December 31, 2017 and September
    30, 2017 contained in the Company’s Quarterly Reports on Form 10-Q originally filed on November 15, 2017, February 13, 2018
    and May 15, 2018, respectively, should no longer be relied upon. The Company’s review of the above-mentioned filings revealed
    that the financial statements in such filings contained errors primarily as a result of omission of certain contingencies. Como
    a result of such review, the Company has decided to make certain corrections to include certain contingencies disclosure in the
    aforementioned consolidated financial statements and notes thereto. The Company also evaluated whether any of the contingencies’
    losses should be recorded in the aforementioned consolidated financial statements and recorded $1.2 million of contingent liabilities
    for the year ended June 30, 2018. As a result of the errors described above, management has concluded that the Company’s
    internal control over financial reporting and its disclosure controls and procedures were not effective as of the ends of each
    of the applicable restatement periods.

    Furthermore, as discussed in “Part II, Item 15. Controls and Procedures,” our management has
    identified material weaknesses in our internal control over financial reporting, which were not remediated as of June 30, 2019.
    A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there
    is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will
    not be prevented or detected on a timely basis.

    We
    did not maintain an effective control environment as there was an insufficient complement of personnel with appropriate accounting
    knowledge, experience and competence, resulting in incorrect application of accounting principles generally accepted in the United
    States of America (“U.S. GAAP”). This material weakness contributed to the following material weaknesses. We did not
    maintain effective controls over our financial close process. Also, we did not design and maintain effective controls over the
    review of supporting information to determine the completeness and accuracy of the accounting for complex transactions, specifically
    related to the business combination that occurred on September 9, 2016, which resulted in an incorrect application of U.S. GAAP
    that resulted in material misstatements and a restatement of our unaudited condensed consolidated financial statements for the
    three and nine months ended September 30, 2016.

    Como
    of the date of this Annual Report, we are re-assessing the design of our controls and modifying processes related to the identification
    and reporting for contingencies. However, there can be no assurance that we will be able to fully remediate our existing material
    weaknesses or that our internal control over financial reporting will not suffer in the future from other material weaknesses,
    thus making us unable to prevent or detect on a timely basis material misstatements in our periodic reports with the SEC. If we
    fail to remediate these material weaknesses or otherwise maintain effective internal control over financial reporting in the future,
    the existence of one or more internal control deficiencies could result in errors in our financial statements, and substantial
    costs and resources may be required to rectify internal control deficiencies.   If we cannot produce reliable financial
    reports, we may have difficulty in filing timely periodic reports with the SEC, investors could lose confidence in our reported
    financial information, the market price of our stock could decline significantly, we may be unable to obtain additional financing
    to operate and expand our business, and our business and financial condition could be materially harmed. In addition, any failure
    to remediate the existing material weaknesses or a failure to maintain effective internal control over financial reporting could
    negatively impact our results of operations, cash flows and financial condition, subject us to potential litigation and regulatory
    inquiry and cause us to incur additional costs in future periods relating to the implementation of remedial measures.

    Matters
    relating to or arising from the restatements, Audit Committee investigation and the associated material weaknesses identified
    in our internal control over financial reporting, including adverse publicity, have caused us to incur significant legal, accounting
    and other professional fees and other costs, have exposed us to greater risks associated with other civil litigation, regulatory
    proceedings and government enforcement actions, have diverted resources and attention that would otherwise be directed toward
    our operations and implementation of our business strategy and may impact our ability to attract and retain customers, employees
    and vendors, any of which could have a material adverse effect on our business, financial condition and results of operations.

    We
    may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt
    Practices Act or Chinese anti-corruption law could have a material adverse effect on our business.

    We
    are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments
    to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the
    purpose of obtaining or retaining business. Chinese anti-corruption law also strictly prohibits bribery of government officials.
    We have operations, agreements with third parties and make sales in China, where corruption may occur. Our activities in China
    create the risk of unauthorized payments or offers of payments by one of the employees, consultants, sales agents or distributors
    of our Company, even though these parties are not always subject to our control. It is our policy to implement safeguards to prevent
    these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective,
    and the employees, consultants, sales agents or distributors of our Company may engage in conduct for which we might be held responsible.

    Violations
    of the FCPA or other anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities,
    which could negatively affect our business, operating results and financial condition. In addition, the United States government
    may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that
    we acquire.

    los
    relative lack of public company experience of our management team may put us at a competitive disadvantage.

    Our
    management team lacks U.S. public company experience, which could impair our ability to comply with legal and regulatory requirements
    such as those imposed by the Sarbanes-Oxley Act. Our senior management does not have experience managing a U.S. publicly traded
    company and lacks knowledge about the Sarbanes-Oxley Act. Such responsibilities include complying with federal securities laws
    and making required disclosures on a timely basis. Our senior management are unable to implement programs and policies in an effective
    and timely manner or that adequately respond to the increased legal, regulatory and reporting requirements associated with being
    a U.S. publicly traded company. Our failure to comply with all applicable requirements could lead to the imposition of fines and
    penalties, distract our management from attending to the management and growth of our business, result in a loss of investor confidence
    in our financial reports and have an adverse effect on our business and stock price.

    We
    depend heavily on key personnel, and turnover of key employees and senior management could harm our business.

    Our
    future business and results of operations depend in significant part upon the continued contributions of our key technical and
    senior management personnel, including Yang (Sean) Liu, our Chairman and Chief Executive Officer and Lili Jiang, our director
    and Chief Financial Officer. They also depend in significant part upon our ability to attract and retain additional qualified
    management, technical, operational and support personnel for our operations. If we lose a key employee, if a key employee fails
    to perform in his or her current position, or if we are not able to attract and retain skilled employees as needed, our business
    could suffer. Significant turnover in our senior management could significantly deplete the institutional knowledge held by our
    existing senior management team. We depend on the skills and abilities of these key employees in managing the reclamation, technical,
    and marketing aspects of our business, any part of which could be harmed by turnover in the future.

    Certain
    of our existing stockholders have substantial influence over our company, and their interests may not be aligned with the interests
    of our other stockholders.

    Our Chief Executive Officer, Yang (Sean)
    Liu, owns approximately 1.6% of our outstanding voting securities and our Chief Financial Officer, Lili Jiang, owns approximately
    1.6% of our outstanding voting securities as of the date of this annual report, in a fully-diluted share base.  As a result,
    each have significant influence over our business, including decisions regarding mergers, consolidations, liquidations and the
    sale of all or substantially all of our assets, election of directors and other significant corporate actions. This concentration
    of ownership may also have the effect of discouraging, delaying or preventing a future change of control, which could deprive
    our stockholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the
    price of our shares.

    We will require additional capital and
    we may not be able to obtain it on acceptable terms or at all.

    We will require additional cash resources due
    to current and any changed business conditions or other future developments, including any investments or acquisitions we may decide
    to pursue. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities
    or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders.
    The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and
    financing covenants that would restrict our operations. Our ability to obtain additional capital on acceptable terms is subject
    to a variety of uncertainties, including:

    ● our current financial position and the continuing going concern and litigation issues;
    ● investors’
        perception of, and demand for, securities of Chinese-based companies involved in construction supply or concrete industries;
    ● conditions
        of the U.S. and other capital markets in which we may seek to raise funds;
    ● our
        future results of operations, financial condition and cash flows; y
    ● economic,
        political and other conditions in China.

    Financing
    may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms
    favorable to us, or at all, could have a material adverse effect on our business, financial condition and results of operations.

    We
    may be exposed to potential risks relating to our internal controls over financial reporting.

    Como
    directed by Section 404 of the Sarbanes-Oxley Act of 2002 or SOX 404, the SEC adopted rules requiring public companies to include
    a report of management on the company’s internal controls over financial reporting in their annual reports. Under current
    law, the auditor attestation will not be required as long as our filing status remains as a smaller reporting company, but we
    may cease to be a smaller reporting company in future years, in which case we will be subject to the auditor attestation requirement.
    We were subject to management report for the fiscal year ended June 30, 2019, and a report of our management for the 2019 fiscal
    year is included under Item 15 of this annual report concluding that, as of June 30, 2019, our internal controls over financial
    reporting were not effective. If we cannot remediate the material weakness identified in a timely manner or, if and when we are
    subject to the auditor attestation report requirement, we are unable to receive a positive attestation from our independent auditors
    with respect to our internal controls, investors and others may lose confidence in the reliability of our financial statements,
    which could adversely affect the price of our ordinary shares.

    We
    have limited insurance coverage for our operations in China.

    los
    insurance industry in China is still at an early stage of development. Insurance companies in China offer limited insurance products.
    We have determined that the risks of disruption or liability from our business, the loss or damage to our property, including
    our facilities, equipment and office furniture, the cost of insuring for these risks, and the difficulties associated with acquiring
    such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result, we do not have
    any business liability, disruption, litigation or property insurance coverage for our operations in China except for insurance
    on some company owned vehicles. Any uninsured occurrence of loss or damage to property, or litigation or business disruption may
    result in the incurrence of substantial costs and the diversion of resources, which could have an adverse effect on our operating
    results.

    We
    may not be current in our payment of social insurance and housing accumulation fund for our employees and such shortfall may expose
    us to relevant administrative penalties.

    los
    PRC laws and regulations require all employers in China to fully contribute their own portion of the social insurance premium
    and housing accumulation fund for their employees within a certain period of time. Failure to do so may expose the employers to
    make rectification for the accrued premium and fund by the relevant labor authority. Also, an administrative fine may be imposed
    on the employers as well as the key management members. As of June 30, 2019, Xin Ao has fully contributed the social insurance
    premium and housing accumulation fund according to PRC laws and regulations.

    Our
    operations may incur substantial liabilities to comply with environmental laws and regulations.

    Our
    concrete manufacturing operations are subject to laws and regulations relating to the release or disposal of materials into the
    environment or otherwise relating to environmental protection. Applicable law required that we obtain an environmental impact
    report and environmental approval from the environmental protection administration prior to obtaining the business license and
    construction enterprise qualification certificate for Xin Ao. However, the local administration of industry and commerce and the
    Beijing Municipal Construction Commission did not require Xin Ao to provide the environmental impact report and environmental
    approval, and Xin Ao has not received any notice of non-compliance nor has any fine or other penalty been assessed. However, the
    environmental protection administration may in the future require that Xin Ao provide the applicable report and apply for the
    required environment approval. Our failure to have complied with the applicable laws regarding delivery of the report may result
    in the assessment of administrative, civil and criminal penalties, the incurrence of investigatory or remedial obligations and
    the imposition of injunctive relief. Resolution of these matters may require considerable management time and expense. In addition,
    changes in environmental laws and regulations occur frequently and any changes that result in more stringent or costly manufacturing,
    storage, transport, disposal or cleanup requirements could require us to make significant expenditures to reach and maintain compliance
    and may otherwise have a material adverse effect on our industry in general and on our own results of operations, competitive
    position or financial condition.

    If
    we are unable to realize the current assets within the normal operating cycle, the Company may not have sufficient funds to meet
    our working capital requirements and debt obligations as they become due.

    Our
    business is capital intensive and highly leveraged. Debt financing in the form of short term bank loans, loans from related parties
    and bank acceptance notes, have been utilized to finance the working capital requirements and the capital expenditures of the
    Company. We are currently in default of our bank loan agreement and the bank has demanded repayment in accordance with a court
    order. There are a number of factors, such as the demand for the Company’s products, economic conditions, the competitive
    pricing in the concrete-mix industry, the Company’s operating results not continuing to deteriorate and the Company’s
    bank and shareholders being able to provide continued support, might result in insufficient funds to meet our working capital
    requirements, operating expenses and capital expenditure obligations. Due to recurring losses, the Company’s working deficit
    was approximately $1.1 million as of June 30, 2019 as compared to a working capital of $7.0 million as of June 30, 2018. As of
    June 30, 2019, cash on-hand balance of approximately $0.3 million with the remaining current assets are mainly composed of accounts
    receivables and prepayments and advances. If we fail to realize the current assets within the normal operating cycle, or if we
    are otherwise unable to establish other available funds, we may not have sufficient funds to meet our working capital requirements
    and debt obligations, grow our business and revenues, reduce our operating costs and, consequently, our business, financial condition,
    results of operations, and prospects will be adversely affected.

    Risks
    Related to Doing Business in China

    En
    order to comply with PRC regulatory requirements, we operate our businesses through companies with which we have contractual relationships
    but in which we do not have controlling ownership. If the PRC government determines that our agreements with these companies are
    not in compliance with applicable regulations, our business in the PRC could be materially adversely affected.

    We
    do not have direct or indirect equity ownership of our variable interest entity, or VIE, Xin Ao, which operates all our businesses
    in China. At the same time, however, we have entered into contractual arrangements with Xin Ao and its individual owners pursuant
    to which we received an economic interest in, and exert a controlling influence over Xin Ao, in a manner substantially similar
    to a controlling equity interest.

    A pesar de que
    we believe that our current business operations are in compliance with the current laws in China, we cannot be sure that the PRC
    government would view our operating arrangements to be in compliance with PRC regulations that may be adopted in the future. There
    have been recent reports of potential PRC government efforts to regulate or perhaps limit the use of VIE structures for new foreign
    investment, particularly in the internet and other telecommunications industries. We are monitoring developments in this area
    and do not believe any adverse impact on our operations is likely.

    If
    we are determined not to be in compliance with future PRC regulations, the PRC government could levy fines, revoke our business
    and operating licenses, require us to discontinue or restrict our operations, restrict our right to collect revenues, require
    us to restructure our business, corporate structure or operations, impose additional conditions or requirements with which we
    may not be able to comply, impose restrictions on our business operations or on our customers, or take other regulatory or enforcement
    actions against us that could be harmful to our business. As a result, our business in the PRC could be materially adversely affected.

    A
    slowdown or other adverse developments in the PRC economy may materially and adversely affect our customers, demand for our services
    and our business.

    We
    are a holding company. All of our operations are conducted in the PRC and all of our revenues are generated from sales in the
    PRC.

    According
    to several articles published by the Wall Street Journal, The New York Times, and BBC News in September and October 2019, China’s
    economic slowdown worsened in the July-to-September period as the trade war with the United States and a host of other problems
    leave China struggling to meet its goals. Value-added industrial output in China rose 4.4% in August 2019 compared to August 2018,
    which was far below economists’ expectation of 5.2% growth and also slower than the 4.8% increase in July, according to
    the National Bureau of Statistics. Fixed-asset investment outside Chinese rural households climbed 5.5% in the January-August
    period in 2019 compared to the same period in 2018, which was also slightly below expectations. Retail sales in China rose 7.5%
    in August 2019 from a year earlier, which was lower than the 7.6% gain in July 2019 and below expectations for a 7.9% rise. If
    China’s economy continues to slow down, it may negatively affect our business operation and financial results.

    We
    rely on contractual arrangements with our VIEs for our operations, which may not be as effective in providing control over these
    entities as direct ownership.

    Our
    operations and financial results are dependent on our VIEs, Xin Ao and its subsidiaries, in which we have no equity ownership
    interest and must rely on contractual arrangements to control and operate the businesses of our VIEs. These contractual arrangements
    are not as effective in providing control over the VIEs as direct ownership. For example, the VIEs may be unwilling or unable
    to perform its contractual obligations under our commercial agreements. Consequently, we would not be able to conduct our operations
    in the manner currently planned. In addition, the VIEs may seek to renew their agreements on terms that are disadvantageous to
    us. Although we have entered into a series of agreements that provide us with substantial ability to control the VIEs, we may
    not succeed in enforcing our rights under them insofar as our contractual rights and legal remedies under PRC law are inadequate.
    In addition, if we are unable to renew these agreements on favorable terms when these agreements expire or enter into similar
    agreements with other parties, our business may not be able to operate or expand, and our operating expenses may significantly
    increase.

    En
    addition, the VIE structure is subject to uncertainty amid the PRC’s changing legislative practice. In January 2015, China’s
    Ministry of Commerce unveiled a draft legislation that could change how the government is regulating corporate structures, especially
    for VIEs controlled by foreign investments. Instead of looking at “ownership”, the draft law focused on the entities
    or individuals hold control of a VIE. If a VIE is deemed to be controlled by foreign investors, it may be barred from operating
    in restricted sectors or the prohibited sectors listed on a “negative list”, where only companies controlled by Chinese
    nationals could operate, even if structured as VIEs.

    En
    the event that the draft law is implemented in any form, and that the Company’s business is characterized as one of the
    “restricted” or “prohibited” sectors, Xin Ao and its subsidiaries may be barred from operation which will
    materially adversely affect our business.

    If
    we become directly subject to the recent scrutiny, criticism and negative publicity involving certain U.S.-listed Chinese companies,
    we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock
    price and reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed
    and resolved quickly.

    Recently,
    U.S. public companies that have substantially all of their operations in China, particularly companies like us which have completed
    so-called reverse merger transactions, have been the subject of intense scrutiny, criticism and negative publicity by investors,
    short sellers, financial commentators and regulatory agencies, such as the United States Securities and Exchange Commission. Much
    of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities and mistakes, a
    lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence
    thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly
    traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually worthless.
    Many of these companies are now subject to shareholder lawsuits, SEC enforcement actions and are conducting internal and external
    investigations into the allegations. It is not clear what affect this sector-wide scrutiny, criticism and negative publicity will
    have on our company, our business and our stock price. If we become the subject of any unfavorable allegations, whether such allegations
    are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our
    company. This situation could be costly and time consuming and distract our management from growing our company. If such allegations
    are not proven to be groundless, our company and business operations will be severely impacted and your investment in our stock
    could be rendered worthless.

    Adverse
    changes in political and economic policies of the PRC government could impede the overall economic growth of China, which could
    reduce the demand for our products and damage our business.

    We
    conduct all of our operations and generate all of our revenue in China. Accordingly, our business, financial condition, results
    of operations and prospects are affected significantly by economic, political and legal developments in China. The PRC economy
    differs from the economies of most developed countries in many respects, including:

    ● el
        higher level of government involvement;
    ● el
        early stage of development of the market-oriented sector of the economy;
    ● el
        rapid growth rate;
    ● el
        higher level of control over foreign exchange; y
    ● el
        allocation of resources.

    Como
    the PRC economy has been transitioning from a planned economy to a more market-oriented economy, the PRC government has implemented
    various measures to encourage economic growth and guide the allocation of resources. While these measures may benefit the overall
    PRC economy, they may also have a negative effect on us.

    A pesar de que
    the PRC government has in recent years implemented measures emphasizing the utilization of market forces for economic reform,
    the PRC government continues to exercise significant control over economic growth in China through the allocation of resources,
    controlling payment of foreign currency-denominated obligations, setting monetary policy and imposing policies that impact particular
    industries or companies in different ways.

    Alguna
    adverse change in the economic conditions or government policies in China could have a material adverse effect on the overall
    economic growth and the level of new construction investments and expenditures in China, which in turn could lead to a reduction
    in demand for our services and consequently have a material adverse effect on our business and prospects.

    Uncertainties
    with respect to the PRC legal system could limit the legal protections available to you and us.

    We
    conduct substantially all of our business through our operating subsidiary in the PRC. Our operating subsidiaries are generally
    subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested
    enterprises. The PRC legal system is based on written statutes, and prior court decisions may be cited for reference but have
    limited precedential value. Since 1979, a series of new PRC laws and regulations have significantly enhanced the protections afforded
    to various forms of foreign investments in China. However, since the PRC legal system continues to rapidly evolve, the interpretations
    of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties,
    which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in
    substantial costs and diversion of resources and management attention. In addition, all of our executive officers and almost all
    of our directors are residents of China and not of the United States, and substantially all the assets of these persons are located
    outside the United States. As a result, it could be difficult for investors to affect service of process in the United States
    or to enforce a judgment obtained in the United States against our Chinese operations and subsidiaries.

    los
    PRC government exerts substantial influence over the manner in which we must conduct our business activities.

    los
    PRC government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy
    through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations,
    including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property and other
    matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements.
    However, the central or local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations
    of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such
    regulations or interpretations.

    Accordingly,
    government actions in the future, including any decision not to continue to support recent economic reforms and to return to a
    more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant
    effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest
    we then hold in Chinese properties or joint ventures.

    Restrictions
    on currency exchange may limit our ability to receive and use our sales revenue effectively.

    Most
    of our sales revenue and expenses are denominated in RMB. Under PRC law, the RMB is currently convertible under the “current
    account,” which includes dividends and trade and service-related foreign exchange transactions, but not under the “capital
    account,” which includes foreign direct investment and loans. Currently, our PRC operating subsidiary may purchase foreign
    currencies for settlement of current account transactions, including payments of dividends to us, without the approval of the
    State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, the relevant PRC
    government authorities may limit or eliminate our ability to purchase foreign currencies in the future. Since a significant amount
    of our future revenue will be denominated in RMB, any existing and future restrictions on currency exchange may limit our ability
    to utilize revenue generated in RMB to fund our business activities outside China that are denominated in foreign currencies.

    Foreign
    exchange transactions by PRC operating subsidiaries under the capital account continue to be subject to significant foreign exchange
    controls and require the approval of or need to register with PRC government authorities, including SAFE. In particular, if our
    PRC operating subsidiaries borrow foreign currency through loans from us or other foreign lenders, these loans must be registered
    with SAFE, and if we finance the subsidiaries by means of additional capital contributions, these capital contributions must be
    approved by certain government authorities, including the Ministry of Commerce, or MOFCOM, or their respective local counterparts.
    These limitations could affect their ability to obtain foreign exchange through debt or equity financing.

    We
    may be unable to complete a business combination transaction efficiently or on favorable terms due to complicated merger and acquisition
    regulations implemented on September 8, 2006.

    los
    recent PRC Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors also governs the approval process
    by which a PRC company may participate in an acquisition of its assets or its equity interests. Depending on the structure of
    the transaction, the new regulation will require the Chinese parties to make a series of applications and supplemental applications
    to the government agencies. In some instances, the application process may require the presentation of economic data concerning
    a transaction, including appraisals of the target business and evaluations of the acquirer, which are designed to allow the government
    to assess the transaction. Government approvals will have expiration dates by which a transaction must be completed and reported
    to the government agencies. Compliance with the new regulations is likely to be more time consuming and expensive than in the
    past and the government can now exert more control over the combination of two businesses. Accordingly, due to the new regulation,
    our ability to engage in business combination transactions has become significantly more complicated, time consuming and expensive,
    and we may not be able to negotiate a transaction that is acceptable to our stockholders or sufficiently protect their interests
    in a transaction.

    los
    new regulation allows PRC government agencies to assess the economic terms of a business combination transaction. Parties to a
    business combination transaction may have to submit to MOFCOM and the other government agencies an appraisal report, an evaluation
    report and the acquisition agreement, all of which form part of the application for approval, depending on the structure of the
    transaction. The regulations also prohibit a transaction at an acquisition price obviously lower than the appraised value of the
    Chinese business or assets and in certain transaction structures, require that consideration must be paid within defined periods,
    generally not in excess of a year. The regulation also limits our ability to negotiate various terms of the acquisition, including
    aspects of the initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions
    relating to the assumption and allocation of assets and liabilities. Transaction structures involving trusts, nominees and similar
    entities are prohibited. Therefore, such regulation may impede our ability to negotiate and complete a business combination transaction
    on financial terms that satisfy our investors and protect our stockholders’ economic interests.

    Fluctuations
    in exchange rates could adversely affect our business and the value of our securities.

    los
    value of our ordinary shares will be indirectly affected by the foreign exchange rate between U.S. dollars and RMB and between
    those currencies and other currencies in which our sales may be denominated. Because substantially all of our earnings and cash
    assets are denominated in RMB, fluctuations in the exchange rate between the U.S. dollar and the RMB will affect our balance sheet
    and our earnings per share in U.S. dollars. In addition, appreciation or depreciation in the value of the RMB relative to the
    U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in
    our business or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we
    issue that will be exchanged into U.S. dollars and earnings from, and the value of, any U.S. dollar-denominated investments we
    make in the future. From June 30, 2018 to June 30, 2019, the PRC Government increased the value of its currency by approximately
    4.9%. China strengthened the value of RMB currency by 3.7% to 6.87 against the US dollar on June 30, 2019 from 6.62 against the
    US dollar on June 30, 2018. Concerns remain that China’s slowing economy, and in particular its exports, will need a stimulus
    that can only come from further cuts in the exchange rate.

    Very
    limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not
    entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may enter
    into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not
    be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange
    control regulations that restrict our ability to convert RMB into foreign currencies.

    Currently,
    some of our raw materials and major equipment are imported. In the event that the U.S. dollars appreciate against RMB, our costs
    will increase. If we cannot pass the resulting costs on to our customers, our profitability and operating results will suffer.

    Under
    the Current Enterprise Income Tax, or EIT, Law, we may be classified as a “resident enterprise” of China. Such classification
    will likely result in unfavorable tax consequences to us and our non-PRC stockholders.

    We
    are a holding company incorporated under the laws of the Cayman Islands. We conduct substantially all of our business through
    our wholly-owned and other consolidated entities in China, and we derive all of our income from these entities. Prior to January
    1, 2008, dividends derived by foreign enterprises from business operations in China were not subject to the Chinese enterprise
    income tax. However, such tax exemption ceased as of January 1, 2008 and thereafter with the effectiveness of the new Enterprise
    Income Tax Law, or EIT Law.

    Under
    the EIT Law, if we are not deemed to be a “resident enterprise” for Chinese tax purposes, a withholding tax at the
    rate of 10% would be applicable to any dividends paid by our Chinese subsidiaries to us. However, if we are deemed to be a “resident
    enterprise” established outside of China whose “place of effective management” is located in China, we would
    be classified as a resident enterprise for Chinese tax purposes and thus would be subject to an enterprise income tax rate of
    25% on all of our income, including interest income on the proceeds from this offering on a worldwide basis.

    los
    regulations promulgated pursuant to the EIT Law define the term “place of effective management” as “establishments
    that carry out substantial and overall management and control over the manufacturing and business operations, personnel, accounting,
    properties, etc. of an enterprise.” The State Administration of Taxation issued a SAT Circular 82 on April 22, 2009, which
    provides that the “place of effective management” of a Chinese-controlled overseas-incorporated enterprise is located
    in China if the following requirements are satisfied: (i) the senior management and core management departments in charge of its
    daily operations function are mainly located in the PRC; (ii) its financial and human resources decisions are subject to determination
    or approval by persons or bodies located in the PRC; (iii) its major assets, accounting books, company seals, and minutes and
    files of its board and shareholders’ meetings are located or kept in the PRC; and (iv) no less than half of the enterprise’s
    directors or senior management with voting rights reside in the PRC. SAT Circular 82 applies only to overseas registered enterprises
    controlled by PRC enterprises, not to those controlled by PRC individuals. If the Company’s non-PRC incorporated entities
    are deemed PRC tax residents, such entities would be subject to PRC tax under the EIT Law. The Company has analyzed the applicability
    of the EIT Law and related regulations, and for each of the applicable periods presented, the Company has not accrued for PRC
    tax on such basis. In addition, although under the EIT Law and the related regulations dividends paid to us by our PRC subsidiaries
    would qualify as “tax-exempted income,” we cannot assure you that such dividends will not be subject to a 10% withholding
    tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect
    to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes.
    As a result of such changes, our historical operating results will not be indicative of our operating results for future periods
    and the value of our ordinary shares may be adversely affected. We are actively monitoring the possibility of “resident
    enterprise” treatment and are evaluating appropriate organizational changes to avoid this treatment, to the extent possible.

    We
    may be subject to fines and legal sanctions if we or our Chinese employees fail to comply with PRC regulations relating to employee
    stock options granted by overseas listed companies to PRC citizens.

    En
    December 25, 2006, the People’s Bank of China issued the Administration Measures on Individual Foreign Exchange Control,
    and its Implementation Rules were issued by the State Administration of Foreign Exchange (“SAFE”) on January 5, 2007.
    Both took effect on February 1, 2007. Under these regulations, all foreign exchange matters involved in an employee stock holding
    plan, stock option plan or similar plan in which PRC citizens’ participation requires approval from the SAFE or its authorized
    branch. On March 28, 2007, the SAFE issued the Application Procedure for Foreign Exchange Administration for Domestic Individuals
    Participating in Employee Stock Holding Plans or Stock Option Plans of Overseas Listed Companies, or Notice 78. Under Notice 78,
    PRC individuals who participate in an employee stock option holding plan or a stock option plan of an overseas listed company
    are required, through a PRC domestic agent or PRC subsidiary of the overseas listed company, to register with the SAFE and complete
    certain other procedures. We and our Chinese employees who have been granted shares or stock options pursuant to our share incentive
    plan are subject to Notice 78. However, in practice, there are significant uncertainties with regard to the interpretation and
    implementation of Notice 78. We are committed to complying with the requirements of Notice 78. However, we cannot provide any
    assurance that we or our Chinese employees will be able to qualify for or obtain any registration required by Notice 78. In particular,
    if we and/or our Chinese employees fail to comply with the provisions of Notice 78, we and/or our Chinese employees may be subject
    to fines and legal sanctions imposed by the SAFE or other PRC government authorities, as a result of which our business operations
    and employee option plans could be materially and adversely affected.

    los
    discontinuation, reduction or delay of any of the preferential tax treatments currently available to us in the PRC could materially
    and adversely affect our business, financial condition and results of operations.

    Prior
    to January 1, 2008, under the old enterprises income tax law, Xin Ao was subject to a 33% income tax rate, which was subject to
    certain tax holidays and preferential tax rates. Under the new enterprise income tax law effective January 1, 2008, or the EIT
    Law, both foreign-invested enterprises and domestic enterprises are subject to a unified 25% income tax rate. Under the EIT Law,
    preferential tax treatments will be granted to enterprises that conduct business in certain encouraged sectors and to enterprises
    that qualify as “high and new technology enterprises”, a status reassessed every three years. In addition, an enterprise
    is entitled to a 0% value-added tax rate if it uses recycled raw materials to manufacture its products. Xin Ao was recognized
    as a high and new technology enterprise in January 2012 and was entitled to a 15% preferential income tax rate for the three-year
    period ended December 2014. In addition, Xin Ao uses recycled raw materials to manufacture its products and was entitled to a
    0% value-added tax (the “VAT tax”) rate from June 2013. The favored treatment of being exempted from the VAT tax expired
    in June 2015, therefore, we will be subject to the 3% industry-standard rate and our value-added tax expenses increase, which
    could have a material adverse effect on our net income and results of operations.

    Risks
    Related to Our Ordinary Shares

    If
    we fail to comply with the continued listing requirements of NASDAQ, we would face possible delisting, which would result in a
    limited public market for our shares and make obtaining future debt or equity financing more difficult for us.

    We
    were delinquent in the filing of our periodic reports with the SEC as a result of which we are not in compliance with listing
    requirements of The Nasdaq Stock Market LLC (“Nasdaq”) Listing Rule 5250(c)(1), which requires timely filing of periodic
    financial reports with the SEC. Under Nasdaq’s listing rules, we were permitted to submit to Nasdaq a plan to regain compliance
    with the Nasdaq listing rules. We have submitted such a plan to the Nasdaq Staff, and on January 11, 2019, Nasdaq notified us
    that the Company has regained compliance with Listing Rule 5250(c)(1).

    En
    July 5, 2018, we received a notification letter from the Nasdaq Listing Qualifications Staff indicating that, since the Company
    has not yet held an annual meeting of stockholders within twelve months of the end of the Company’s fiscal year ended June
    30, 2017, the Company no longer complies with Nasdaq Listing Rules 5620(a) and 5810(c)(2)(G).

    los
    notification received had no immediate effect on the listing of the Company’s ordinary shares on Nasdaq. Under the Nasdaq
    Listing Rules, the Company had until August 20, 2018 to submit a plan to regain compliance. If the Company’s plan was accepted,
    Nasdaq would grant an extension of up to 180 calendar days from June 30, 2018, or December 27, 2018, to regain compliance.

    En
    January 11, 2019, Nasdaq notified us that the Company has regained compliance with Listing Rule 5620, and this matter is now closed.

    If
    we fail to comply with the requirements for continued listing on The NASDAQ Capital Market again in the future, we cannot assure
    you that we will be able to regain compliance. If our securities lose their status on The NASDAQ Capital Market, our securities
    would likely trade in the over-the-counter market. If our securities were to trade on the over-the-counter market, selling our
    securities could be more difficult because smaller quantities of securities would likely be bought and sold, transactions could
    be delayed, and security analysts’ coverage of us may be reduced. In addition, in the event our securities are delisted,
    broker-dealers have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions
    in our securities, further limiting the liquidity of our securities. These factors could result in lower prices and larger spreads
    in the bid and ask prices for our securities. Such delisting from The NASDAQ Capital Market and continued or further declines
    in our share price could also greatly impair our ability to raise additional necessary capital through equity or debt financing,
    and could significantly increase the ownership dilution to shareholders caused by our issuing equity in financing or other transactions.

    los
    delayed filing of some of our periodic reports has made us currently ineligible to use a registration statement on Form F-3 to
    register the offer and sale of securities, which could adversely affect our ability to raise future capital or complete acquisitions.

    Como
    a result of the delayed filing of some of our periodic reports with the SEC, we will not be eligible to register the offer and
    sale of our securities using a registration statement on Form F-3 until 12 months after the delinquent filings have been made.
    Should we wish to register the offer and sale of our securities to the public prior to the time we are eligible to use Form F-3,
    both our transaction costs and the amount of time required to complete the transaction could increase, making it more difficult
    to execute any such transaction successfully and potentially harming our financial condition.

    Our
    ordinary shares are very thinly traded, and there can be no assurance that there will be an active market for our ordinary shares
    in the future.

    Our
    ordinary shares are very thinly traded, and the price if traded may not reflect our value. There can be no assurance that there
    will be an active market for our ordinary shares in the future. The market liquidity will be dependent on the perception of our
    operating business and any steps that our management might take to bring us to the awareness of investors. There can be no assurance
    given that there will be any awareness generated. Consequently, investors may not be able to liquidate their investment or liquidate
    it at a price that reflects the value of the business. If a more active market should develop, the price may be highly volatile.
    Because there may be a low price for our ordinary shares, many brokerage firms may not be willing to effect transactions in the
    securities. Even if an investor finds a broker willing to effect a transaction in our ordinary shares, the combination of brokerage
    commissions, transfer fees, taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions
    will not permit the use of such ordinary shares as collateral for any loans.

    We
    do not intend to pay dividends on our ordinary shares for the foreseeable future, but if we intend to do so our holding company
    structure may limit the payment of dividends to our stockholders.

    We
    have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying
    dividends, should we decide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations
    depends upon the receipt of dividends or other payments from our operating subsidiaries and other holdings and investments. En
    addition, our operating subsidiaries, from time to time, may be subject to restrictions on their ability to make distributions
    to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into
    U.S. dollars or other hard currency and other regulatory restrictions as discussed below. If future dividends are paid in RMB,
    fluctuations in the exchange rate for the conversion of RMB into U.S. dollars may reduce the amount received by U.S. stockholders
    upon conversion of the dividend payment into U.S. dollars.

    Chinese
    regulations currently permit the payment of dividends only out of accumulated profits as determined in accordance with Chinese
    accounting standards and regulations. Our subsidiaries in China are also required to set aside a portion of their after tax profits
    according to Chinese accounting standards and regulations to fund certain reserve funds. Currently, our subsidiaries in China
    are the only sources of revenues or investment holdings for the payment of dividends. If they do not accumulate sufficient profits
    under Chinese accounting standards and regulations to first fund certain reserve funds as required by Chinese accounting standards,
    we will be unable to pay any dividends.

    We
    may be subject to penny stock regulations and restrictions and you may have difficulty selling our ordinary shares.

    los
    SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market
    price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. If our ordinary
    shares becomes a “penny stock”, we may become subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock
    Rule”. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other
    than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000
    or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer
    must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the
    transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect
    the ability of purchasers to sell any of our securities in the secondary market.

    por
    any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock,
    of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about
    sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities.
    Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account
    and information on the limited market in penny stock.

    There
    can be no assurance that our ordinary shares will qualify for exemption from the Penny Stock Rule. In any event, even if our ordinary
    shares were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the
    SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction
    would be in the public interest.

    ITEM
        4.
    INFORMATION
        ON THE COMPANY

    Historia
    and Development of the Company

    China
    Advanced Construction Materials Group, Inc. was founded as an unincorporated business on September 1, 2005, under the name TJS
    Wood Flooring, Inc., and became a C corporation in the State of Delaware on February 15, 2007. On April 29, 2008, we changed our
    name to China Advanced Construction Materials Group, Inc. in response to a reverse acquisition transaction with BVI-ACM described
    abajo.

    En
    April 29, 2008, we completed a reverse acquisition transaction with BVI-ACM whereby we issued to the stockholders of BVI-ACM 8,809,583
    shares of our common stock in exchange for all of the issued and outstanding capital stock of BVI-ACM. BVI-ACM thereby became
    our wholly owned subsidiary and the former stockholders of BVI-ACM became our controlling stockholders.

    En
    August 1, 2013, we consummated a reincorporation merger pursuant to which we merged with and into our wholly-owned subsidiary,
    China Advanced Construction Materials Group, Inc., a newly formed Nevada corporation and the surviving entity in the merger, pursuant
    to the terms and conditions of an Agreement and Plan of Merger entered into as of August 1, 2013. As a result of the reincorporation,
    the Company became governed by the laws of the state of Nevada.

    On August 20, 2018, CACM Group NY, Inc.
    (“CACM”) was incorporated in the State of New York and is wholly owned by Huitao Technology Co., Ltd. The establishment
    of CACM is to expand the Company’s construction material business in the New York. As of the date of the report, CACM has
    not commenced any operations.

    En
    December 31, 2018, we consummated a second reincorporation merger pursuant to which we merged with and into our whole-owned subsidiary,
    China Advanced Construction Materials Group, Inc., a newly formed Cayman Islands company and the surviving entity in the merger,
    pursuant to the terms and conditions of an Agreement and Plan of Merger adopted in July 2018. As a result of the reincorporation,
    the Company is now governed by the laws of the Cayman Islands.

    En
    June 27, 2019, the Company’s amendment and restatement of the Company’s memorandum and articles of association to
    change the Company’s name from China Advanced Construction Materials Group, Inc. to Huitao Technology Co., Ltd. was approved
    during the Company’s annual meeting of shareholders.

    Antecedentes
    and History of BVI-ACM and China-ACMH

    BVI-ACM
    was established on October 9, 2007, under the laws of British Virgin Islands. The majority shareholders of BVI-ACM are Chinese
    citizens who own 100% of Xin Ao, a limited liability company formed under laws of China. BVI-ACM was established as a “special
    purpose vehicle” for foreign fund raising for Xin Ao. China State Administration of Foreign Exchange, or SAFE, requires
    the owners of any Chinese companies to obtain SAFE’s approval before establishing any offshore holding company structure
    for foreign financing as well as subsequent acquisition matters. On September 29, 2007, BVI-ACM was approved by local Chinese
    SAFE as a “special purpose vehicle” offshore company.

    En
    November 23, 2007, BVI-ACM established a subsidiary, China-ACMH, in China as a wholly owned foreign limited liability company
    with registered capital of $5 million. Through China-ACMH and its variable interest entity Xin Ao, we are engaged in producing
    general ready-mixed concrete, customized mechanical refining concrete, and some other concrete-related products which are mainly
    sold in China. On September 20, 2010, China ACMH established a 100% owned subsidiary, Advanced Investment Holdings Co., Inc.,
    or AIH, in the State of Nevada. AIH never engaged in operations and the Company subsequently dissolved AIH on August 30, 2011.

    En
    March and April 2010, Xin Ao established five 100% owned subsidiaries in China: Beijing Heng Yuan ZhengKe Technical Consulting
    Co., Ltd (“Heng Yuan ZhengKe”), Beijing Hong Sheng An Construction Materials Co., Ltd (“Hong Sheng An”),
    Beijing Heng Tai Hong Sheng Construction Materials Co., Ltd (“Heng Tai”), Da Tong Ao Hang Wei Ye Machinery and Equipment
    Rental Co., Ltd (“Da Tong”) and Luan Xian HengXin Technology Co., Ltd (“Luan Xian HengXin”). Total registered
    capital for these five subsidiaries was approximately $2.1 million (RMB 14 million) and none of these Xin Ao subsidiaries had
    actual operation. In February 2017 and prior, all five subsidiaries were dissolved.

    Capital
    Expenditures

    We
    incurred capital expenditures of approximately $0.1 million, $0.1 million and $0.2 million for the years ended June 30, 2019,
    2018 and 2017, respectively, primarily in connection with purchases of equipment. These capital expenditures were financed by
    cash provided by investing activities.

    We
    expect that our capital expenditures in fiscal year 2020 will be incurred primarily in connection with purchases of equipment.

    Negocio
    Overview

    Our
    concrete sales business is comprised of the formulation, production and delivery of the Company’s line of C10-C100 concrete
    mixtures primarily through our current fixed plant, a ready mix concrete batching plant in Beijing. The ready-mixed concrete sales
    business engages principally in the formulation, preparation and delivery of ready-mixed concrete to the worksites of our customers.
    We procure raw materials, mix them according to our measured mixing formula, ship the final products in mounted transit mixers
    to the destination work site, and, for more sophisticated structures, pump the mixture and set it into structural frame molds
    as per structural design parameters. The process of delivering and setting the ready mix concrete mixture cannot exceed 90 minutes
    because the chemistry of concrete mixture hardens thereafter. The deliverable radius of a concrete mixture from our ready mix
    plant in Beijing is approximately 25 kilometers. Traffic conditions would affect the timing and shipment of our concrete mixtures.
    Since the 2008 Olympics, there are alternating license plate traffic restrictions on many traffic routes in Beijing to ease traffic
    congestion and associated exhaust pollution. Due to the large amounts of working capital required for the acquisition of raw materials,
    a supply shortage or degradation of supplier accounts payable credit terms would pose a potential risk to our business.

    Our
    principal market, Beijing, has enjoyed stronger economic growth and a higher demand for construction than other regions of China.
    As a result, we have witnessed that competitors expanding their sales and build up their distribution networks in our principal
    market. We anticipate that this trend will continue and likely accelerate. Increased competition may have a material adverse effect
    on our financial condition and operation results.

    Our
    Industry

    China
    is already among the world’s largest construction materials producers, ranking first in the world’s annual output
    of cement, flat glass, building ceramic and ceramic sanitary ware. The construction materials market includes all manufacturers
    of sand, gravel, aggregates, cement, concrete and bricks. The market does not include other finished or semi-finished building
    materials.

    Our
    Industry was influenced by the decline in the macro economy in recent periods. The concrete products industry experienced a slowdown
    in industry production and economic growth since September 2011. In 2014, the slowdown in the industry became more obvious month
    by month, with profit generally being squeezed by the greater pressure to maintain stable level of production and operation. 
    In 2017, the pressure on small concrete companies has further increased and many have been shut down.

    Demand
    for Ready-Mixed Concrete

    los
    demand for ready-mixed concrete is substantially effected by the economy scale, number of ongoing infrastructure projects as well
    as the environmental policies in China. Recently, the fixed asset investment has been slowed down in China and it actually causes
    a negative growth in the real estate investment industry. Therefore, the demand of ready-mixed concrete in China may have a tendency
    to decrease in near future.

    Our
    Competitive Strengths

    Ready-mixed
    concrete is a highly versatile construction material that results from combining coarse and fine aggregates, such as gravel, crushed
    stone and sand, with water, various chemical admixtures and cement. We manufacture ready-mixed concrete in variations, which in
    each instance may reflect a specific design use. We generally maintain inventory of raw materials for a short period of time to
    coordinate our daily material purchases with the time-sensitive delivery requirements of our customers.

    los
    quality of ready-mixed concrete is time-sensitive as it becomes difficult to place within hours after mixing. Consequently, the
    market for a permanently installed ready-mixed concrete plant is usually limited to an area within a certain radius of such plant’s
    location. We produce ready-mixed concrete in batches at our plant and use mixer and other trucks to complete the production process,
    then distribute and deliver the concrete to the worksites of our customers.

    Concrete
    has many attributes that make it a highly versatile construction material. In recent years, industry participants have developed
    various uses for concrete products.

    We
    generally obtain contracts through local sales and marketing efforts directed at concrete subcontractors, general contractors,
    property owners and developers, governmental agencies and home builders.

    Our
    competitors includes a number of state-owned and large private PRC-based manufacturers and distributors that produce and sell
    products similar to ours. We compete primarily on the basis of quality, technological innovation and price. Essentially all contracts
    on which we bid are awarded through a competitive bid process with awards often made to the lowest bidder, though other factors
    such as shorter completion time or prior experiences are often just as important. Within our markets, we compete with many national,
    regional and local state-owned and private construction corporations, some of which have achieved greater market penetration or
    have greater financial and other resources than us. In addition, there are a number of large national companies in our industry
    that could potentially enter into our markets and compete with us. If we are unable to compete successfully in our markets, our
    relative market share and profits would be reduced.

    We
    believe that the following competitive strengths enable us to compete effectively and to capitalize on the remaining market for
    construction materials in China:

    ● Large
        Scale Contractor Relationships.
    We have contracts with major construction contractors which are constructing key
        infrastructure, commercial and residential projects. Our sales efforts focus on large-scale projects and large customers which
        place large recurring orders and raise less credit risk to us. For the year ended June 30, 2019, five customers accounted
        for approximately 52.1% of the Company’s sales and 23.0% of the Company’s accounts receivable as of June 30, 2019.
        Should we lose these customers in the future and are unable to obtain additional customers, our revenues will suffer.

    ● Experienced
        Management
    . The technical knowledge and business relationships of our management give us the ability to secure major infrastructure
        projects, increase production volumes, and implement quality standards and environmentally sensitive policies, and it also
        provide us with leverage to acquire less sophisticated operators. If there is any significant turnover in our management,
        we would lose the institutional knowledge held by our existing senior management team.

    ● Innovation
        Efforts
    . We strive to produce the most technically and scientifically advanced products for our customers hence we maintain
        close relationships with Tsinghua University, Xi’an University of Architecture and Technology and Beijing Dongfang Jianyu
        Institute of Concrete Science &Technology, which assist us with our research and development activities. During our five
        year agreement with the Institute, we obtain an advantageous status over many of our competitors by gaining access to a wide
        array of resources and knowledge.  The Company incurred research & development expenses of approximately $0.2 million
        and $1.2 million for the years ended June 30, 2019 and 2018, respectively.

    Our
    Growth Strategy

    We
    are committed to enhancing profitability and cash flows through the following strategies:

    ● Focusing
        on High Capacity Utilization.
    We intend to focus on achieving high capacity utilization in order to efficiently operate
        our plant, by increasing capacity utilization at our existing plant or expanding capacity by building new plants to meet existing
        contracts and anticipated increase in demand. As a result, we terminated our leased station in the eastern suburban area of
        Beijing based on slowing demand for railway construction and the suspension of new and ongoing high speed railway projects
        stemming from a changing policy announced by China’s Ministry of Rail and national development and reform commission.

    ● Mergers
        and Acquisitions
    . When capital permits, we intend to capitalize on the challenges that smaller companies are encountering
        in our industry by acquiring complementary companies at favorable prices. We believe that buying rather than building capacity
        is an option that may be attractive to us if replacement costs are higher than purchase prices. We continue to look into acquiring
        smaller concrete manufacturers in China as part of our expansion plans. We have not identified specific targets or entered
        into any Letters-of-Intent with smaller concrete manufacturers at this time.

    ● Vertical
        Integration
    . When capital permits, we plan to acquire smaller companies within the construction industry, develop more
        material recycling centers, and hire additional highly qualified employees. In order to accomplish this, we may need to offer
        additional equity or debt securities. Certain companies we seek to acquire are suppliers of the raw materials we purchase
        to manufacture our products. If we do acquire such companies we will have greater control over our raw material costs.

    ● Supply
        Chain Efficiencies and Scale.
    We intend to streamline our supply chain process and leverage our scale.

    ● Nuevo
        Product Offerings
    . We plan to produce a lightweight aggregate concrete for use in projects and to expand product offerings
        to include pre-cast concrete.

    Our
    Operaciones

    We
    provide materials through our ready-mixed concrete plant in Beijing. We own one concrete plant and its related equipment.

    Products

    Como
    architectural designs become more complex, challenging, and modern in scope, the need for technology driven companies to provide
    high-end specialty concrete mixtures has rapidly accelerated. Increasing demand for state-of-the-art cement mixtures has spurred
    our technological innovation and our ability to provide advanced mixtures of building materials that meet project specific engineering
    and environmental specifications. We produce a range of C10 to C100 concrete materials and specialize in an array of specialized
    ready-mixed concretes tailored to each project’s technical specifications and environmental standards.

    We
    specialize in “ready-mixed concrete”, a concrete mixture made at our facility with complete computerized operating
    systems. Such concrete accounts for nearly three-fourths of all concrete produced. Ready-mixed concrete is mixed on demand and
    is shipped to worksites by concrete mixer trucks.

    Our
    ready-mixed concrete products consist of proportioned mixes we prepare and deliver in an unhardened plastic state for placement
    and shaping into designed forms at the worksite. Selecting the optimum mix for a worksite entails determining not only the ingredients
    with the desired permeability, strength, appearance and other properties after it hardened, but also the ingredients necessary
    to achieve a workable consistency considering the weather and other conditions at the worksite. We believe we can achieve product
    differentiation for the mixes we offer because of the variety of mixes we produce, our volume production capacity and our scheduling,
    delivery and placement reliability.

    We
    produce ready-mixed concrete by combining the desired type of cement, other cementitious materials and gravel and crushed stone
    with water and, typically, one or more admixtures. These admixtures, such as chemicals, minerals and fibers, determine the usefulness
    of the product for particular applications.

    We
    use a variety of chemical admixtures to relieve internal pressure, increase resistance to crack in subfreezing weather, retard
    the hardening process to make concrete more workable in hot weather, strengthen concrete by reducing its water content, accelerate
    the hardening process, reduce the time required for curing, and facilitate the placement of concrete acquiring low water content.

    We
    frequently use various mineral admixtures as supplements to cement, which we refer to as cementitious materials, to alter the
    permeability, strength and other properties of concrete.

    los
    ready-mixed concrete sector in the market is growing at a fast rate, largely due to the Chinese government’s implementation
    of Decree #341 in 2004. This law bans on-site concrete production in over 200 cities across China, with the goal of reducing environmental
    damages from onsite concrete mixing and improving the quality of concrete used in construction. The use of ready-mix concrete
    minimizes worksite noise, dirt and congestion, and most additives used in ready-mix concrete are environmentally safe. Our goal
    is to continue the use of at least 30% recyclable components in our concrete mixtures.

    We
    are building a comprehensive product portfolio that serves the diverse needs of our developing customer base and all unique construction
    and infrastructure projects. While we mainly specialize in ready-mix concrete formulations from controlled low-strength material
    to high-strength concrete, each of them is specifically formulated to meet the needs of each project. We provide both industry
    standard and highly innovative products, including:

    Common
        Industry Mixtures
    (Customized
        to Project)
    Industry
        Leading Mixtures
    Highly
        Technical Blends
    Ready-mixed
        Concrete Blends: C10 to C100
    Compound
        Admixture Concrete
    Controlled
        Low-Strength Material (CLSM)
    Lightweight
        Aggregate Concrete
    High-Strength
        Concrete with Customized Fibers
    Energy-saving
        Phase change thermostat concrete
    Soil
        Cement, Unique Foundation Concrete
    C100
        High Performance Concrete

    Our
    Customers

    por
    the fiscal year ended June 30, 2019, we had two customers, whose sales accounted for more than 10% of our total sales. For the
    fiscal year ended June 30, 2018, we had one customer, whose sales accounted for more than 10% of our total sales. Five customers
    accounted for approximately 52.1% and 39.9% of the Company’s sales for the years ended June 30, 2019 and 2018, respectively.
    The total accounts receivable from these customers amounted to approximately $13.4 million and $10.2 million as of June 30, 2019
    and 2018, respectively.

    Developing
    New Relationships

    Our
    business will be damaged if project contracts with the Chinese government, for which we may act as a sub-contractor, are cancelled.
    Our sales strategy balances these risks by focusing on building new long-term cooperative relationships with some of China’s
    top construction companies in order to enhance our reputation and to enter new markets. Our sales representatives are actively
    building relationships with the Chinese government, general contractors, architects, engineers, and other potential sources of
    new business in target markets. Our sales efforts are further supported by our executive officers and engineering personnel, who
    have substantial experience in the design, formulation and implementation of advanced construction and concrete materials projects.

    Our
    Suppliers

    We
    rely on third party suppliers of the raw materials to manufacture our products. Our top five suppliers accounted for approximately
    34.9% and 36% of the Company’s purchases for the years ended June 30, 2019 and 2018, respectively. The total accounts payable
    to these suppliers amounted to approximately $1.5 million and $0.7 million as of June 30, 2019 and 2018, respectively.

    Sales
    and Marketing

    General
    contractors typically select their suppliers of ready-mixed concrete and precast concrete. In large, complex projects, an engineering
    firm or division within a state transportation or public works department, may influence the purchasing decision, particularly
    if the concrete has complicated design specifications. In connection with large, complex projects and government-funded projects,
    the general contractor or project engineer usually awards supply orders on the basis of either direct negotiation or a competitive
    bidding process. Our marketing efforts target on general contractors, developers, design engineers, architects and homebuilders
    whose focus extends beyond the price of our products to quality, consistency and reducing the in-place cost.

    Our
    marketing efforts are geared toward advancing China-ACMH as the supplier to build China’s most modern and challenging projects.
    The Company is constantly seeking ways to raise its profile and leverage additional publicity. To this end, the Company plans
    to expand its presence at leading construction industry events and in periodicals to build up successful reputation. El primario
    goal is to reinforce the sales efforts by promoting positive testimonials and successful stories from the Company’s high
    profile clients and projects. Our marketing and sales strategies emphasizes on the sale of value-added products and solutions to
    customers.

    Research
    and Development

    Construction
    materials companies are under extreme pressure to respond quickly to industrial demands with new designs and product innovations
    that support rapidly changing technical demand and regulatory requirements. We devote a substantial amount of attention to the
    research and development of advanced construction materials that meet the specific needs of projects while striving to lead the
    industry in value, materials and processes. We have sophisticated in-house R&D and testing facilities, a highly technical
    onsite team, in cooperation with a leading research institution, experienced management and advisory experts. Our research and
    development expenses were approximately $0.2 million for the year ended June 30, 2019, as compared to $1.2 million for the year
    ended June 30, 2018.

    Beijing
    Concrete Institute Partnership

    los
    Beijing Dongfang Jianyu Institute of Concrete Science & Technology, or Beijing Concrete Institute, has 40 employees, with
    five senior research fellows, and 15 mid-level researchers. The Institute and its staff have frequently participated and collaborated
    with national and local government agencies to establish the following industry standards:

    ● Specification
        For Mix Proportion Design of Ordinary Concrete JGJ55-2000
    ● Code
        for Acceptance of Constructional Quality Of Concrete Structures GB 50204-2002
    ● Applied
        Technical Specification of Mineral Admixtures In Concrete DBJ/T01-64-2002
    ● Ready-Mixed
        Concrete GB/T 14902-2003
    ● Practice
        Code for Application of Ready-Mixed Mortar DBJ 01-99-2005
    ● Management
        Specification of Quality for Ready-Mixed Concrete
    ● Technical
        Requirement for Environmental Labeling Products Ready-Mixed Concrete HJ/T412- 2007
    ● High
        Performance Concrete mineral admixtures; GB/T18736-2012
    ● Test
        method for determining cement density GB/T 208-2014

    ● Evaluation
        for Life Cycle Environment-friendly Assessment of concrete products national standard GB/T XXXX- 20XX
    ● Compound
        admixtures for concrete industry standard JG/T XXXX-20XX
    ● los
        evaluation system on clean production of ready-mixed concrete
    ● Safety
        production management regulation of premixed concrete
    ● Technical
        specifications of waster concrete regeneration, commercial standard

    We
    have a close association with the Beijing Concrete Institute and have been able to incorporate many of these research findings
    into our operations, products, and procedures.  We work closely with the institute and, in return for our sponsorships to
    multiple research initiatives, we have been granted exclusive works for the development of the materials used for our existing
    plant’ regional projects.

    We
    are able to use the Research Findings and Technical Publication and Procedures of the Beijing Concrete Institute, University of
    Science and Technology Beijing, Beijing University of Technology, China Academy of Building Research, China Building Materials
    Academy in our business, which provides us with an advantage over many of our competitors. Because of our contracts with the institutes,
    our competitors are unable to commercially utilize the findings. Some of these findings include:

    ● Research
        on Compound Admixture HPC; 3rd Class Award for China Building Materials Science & Technology Progress.
    ● Research
        and Application of C100 HPC; 3rd Class Award for Beijing Science & Technology Progress.
    ● Research
        on pumping Light Aggregate Concrete; Innovation Award for China Building Materials Science& Technology.
    ● Research
        and Application of Green (nontoxic) HPC; First Prize for Beijing Science & Technology Progress.
    ● Construction
        Technology of HPC for the Capital International Airport.
    ● Research
        on Production and Construction Technology of Phase Change Energy-saving Thermostat Concrete and Mortar.
    ● Polycarboxylate
        Series High Performance Water Reducing Agent Compositing Technique.
    ● State
        Swimming Center for Concrete Cracking Control Technology.
    ● Research
        on construction waste recycled materials in concrete; Through the identification of the scientific and technological achievements
        with China Building Materials Science& Technology Progress.
    ● Research
        on the application of tailings waste rocks in the concrete. Through the scientific and technological achievements identification
        by China Building Materials Science & Technology.
    ● los
        research and application of alkali-free & high performance accelerator on concrete; Through the scientific and technological
        achievement identification by China Building Materials Science & Technology.

    En
    addition, we collaborate closely with the institute and its executives who play a strong role in recommending industry standards,
    advising on major infrastructure developments, and creating and maintaining strong connections with leading developers, construction
    companies, and governmental officials.

    Successful
    Innovations

    Some
    of our advanced products and processes are developed through our relationships with research institutes and universities, including:

    C100
    High Performance Concrete

    High
    Strength Concrete is often defined as concrete with a compressive strength greater than 6000 psi (41 MPa). The primary difference
    between high-strength concrete and normal-strength concrete is the compressive strength that represent the maximum resistance
    of a concrete sample to applied pressure. Manufacturing high-strength concrete involves making optimal use of the basic ingredients
    that constitute normal-strength concrete.

    Through
    our collaborative efforts, we have developed a high performance concrete which can be produced at an impermeable grade above P35,
    and can be used as self-waterproofing concrete for structural engineering, as the water-cement (W/C) ratio and carbonized shrinking
    is minimal and the structure is close-grained.

    Only
    a limited number of corporations in the Beijing are equipped with the expertise to produce C100 High Performance Concrete.

    Compound
    Admixture Concrete

    Esta
    compound mineral mixture is a composite of coal powder, mineral powder and mineral activators blended to specific proportions.
    This mixture improves activity, filling, and super-additive effects of the concrete and also improves the compatibility between
    cement and aggregate.

    Lightweight
    Aggregate Concrete & Innovative Pumping Technology

    Esta
    procedure involves a pumping technology of lightweight aggregate. It is a pretreatment method of lightweight aggregate. Setting
    appropriate times and pressure, lightweight aggregate will reach an appropriate saturation state under pressure once it is put
    into a custom designed sealed pressure vessel. Lightweight aggregate concrete was prepared through the above pretreatment method,
    and would dry quicker under pumping pressure without losing consistency. Accordingly, lightweight aggregate concrete will be easily
    pumped when applied which shortens the construction time.

    Energy-saving
    Technologies of Phase Change Thermostat Concrete

    Energy
    conservation concrete may adjust and reflect process temperature, which would solve cracking problem brought about by cement heat
    of hydration in large-scale concrete pours.

    Polycarboxylate
    Series High Performance Water Reducing Agent Compositing Technique

    los
    research and production of water reducing admixture would improve performance while lowering pollution and the environmental impact.
    Super plasticizer Polycarboxylate series which reduces water requirements is an attractive additive in that it enables high strength
    concrete, super-strength concrete, high fluidity and super plasticizer concrete, and self-defense concrete. The water reduction
    of Polycarboxylate may reach 20% to 25%, higher than the current industry standard — the Naphthaline water reducing agent. los
    cost of the water reducing agent is highly competitive, as it may replace Naphthaline to be used for high strength and high performance
    concrete production.

    Application
    of Reused Water in Concrete

    los
    re-use of waste water of a concrete plant to mix concrete is significant as it can reduce production costs, minimize fresh water
    usage and introduce an efficient approach to address industrial waste. The practical application of this effort is a further step
    towards the goal of minimal pollution and emissions.

    Our
    Competition

    Our
    principal market, Beijing, has enjoyed stronger economic growth and a higher demand for construction than other regions of China.
    As a result, we believe that competitors will try to expand their sales and build up their distribution networks in Beijing. Our
    future success depends on our ability to establish and maintain a competitive position in the marketplace.

    We compete primarily on the basis of quality, technological innovation and price. Our main competitors
    include Beijing Construction Engineering Group, BBMG Group Co., LTD, Beijing Uni-Construction Group., and Jidong Concrete Group.
    Essentially all of the contracts we bid on are awarded through a competitive bid process with awards generally made to the lowest
    bidder, though other factors such as shorter completion time or prior experience are often just as important. Within our markets,
    we compete with many national, regional and local construction corporations. Some of these competitors have achieved greater market
    penetration or have greater financial and other resources than us. In addition, we compete with a number of state-owned enterprises,
    which have significantly greater financial resources and competitive advantage than us.

    There
    are approximately 98 concrete mixture stations in the Beijing area. The concrete production industry is highly segmented, with
    no single supplier having greater than a 3% market share.

    Intellectual
    Property

    We
    currently own the following intellectual property rights:

    Name Patent
        No.
    Duration Patent
        Owner
    Un
        ultra-fine powder and its preparation method active regeneration
    ZL
        2013 1 0070164.7
    julio
        9, 2014-July 8, 2034
    Xin
        Ao
    A
        Polycarboxylate and preparation method used recycled aggregate concrete
    ZL
        2013 1 0072014.X
    January
        1, 2014-December 31, 2034
    Xin
        Ao
    Un
        early strength of recycled aggregate concrete superplasticizer
    ZL
        2013 1 0072015.4
    abril
        9, 2014-April 8, 2034
    Xin
        Ao

    Environmental
    Matters

    We
    are obligated to comply with environmental protection laws and regulations promulgated by the Ministry of Construction and the
    State Environmental Protection Administration. Some specific environmental regulations require sealed transportation of dust materials
    and final products, closed storage of sand and gravel, as well as reduction of noise and dust pollution on worksites and encouragement
    of the use of waste materials. The governmental regulatory authorities conduct periodic inspections. We have met all the requirements
    in the past inspections.   We are one of the 10 companies in the industry that have been awarded the honor of “Green
    Concrete Producer” by the PRC government.

    Our
    Labor Force

    Como
    of June 30, 2019, we employed 233 full-time employees. The following table sets forth the number of our full-time employees by
    function as of June 30, 2019.

    Employees/Independent
    Contractors and their Functions

    Management & Administrative Staff 56 24.03 %
    Sales 16 6.87 %
    Technical & Engineering Staff 18 años 7.73 %
    Production Staff 27 11.59 %
    Drivers & Heavy Equipment Operators 46 19.74 %
    Sub-Total 163 69.96 %
    Independent Contractors 70 30.04 %
    Total 233 100.00 %

    Como
    required by applicable PRC law, we have entered into employment contracts with all our officers, managers and employees. We believe
    that we maintain a satisfactory working relationship with our employees and we have not experienced any significant labor disputes
    or any difficulty in recruiting staff.

    En
    addition, we are required by PRC law to cover employees in China with various types of social insurance and believe that we are
    in material compliance with the relevant laws.

    Insurance

    We
    believe our insurance coverage is customary and standard for companies of comparable size in comparable industries in China.

    Re-domicile

    En
    September 26, 2018, we filed a definitive proxy statement to change our place of incorporation from Nevada to the Cayman Islands.
    The re-domicile involved the Company’s merger with a newly formed subsidiary, as a result of which we became a wholly owned
    subsidiary of a Cayman Islands holding company (“CADC Cayman”). Each outstanding share of common stock of the Company
    was converted into the right to receive one ordinary share of CADC Cayman, which was issued by CADC Cayman in connection with
    the merger pursuant to a registered offering. Following the merger, CADC Cayman, together with its subsidiaries, own and continue
    to conduct the Company’s business in substantially the same manner as it was previously being conducted by the Company and
    its subsidiaries. While CADC Cayman will be taxed as a United States corporation, it qualifies as a foreign private issuer for
    purposes of its reporting obligations with the SEC, which has reduced our compliance operating costs. The ordinary shares of CADC
    Cayman are listed on the NASDAQ Stock Market under the symbol “HHT.”

    Restatement
    and Independent Investigation

    En
    October 6, 2018, the Audit Committee of the Board of Directors of the Company, after consultation with the Company’s then
    independent registered public accounting firm, Friedman LLP (“Friedman”) concluded, that the Company’s audited
    financial statements at and for the period ended June 30, 2017 contained in the Company’s Annual Report on Form 10-K originally
    filed with the SEC on September 28, 2018 as well as the unaudited financial statements at and for the periods ended March 31,
    2018, December 31, 2017 and September 30, 2017 contained in the Company’s Quarterly Reports on Form 10-Q originally filed
    on November 15, 2017, February 13, 2018 and May 15, 2018, respectively, should no longer be relied upon. The Company’s review
    of the above mentioned filings revealed that the financial statements in such filings contained errors primarily as a result of
    omission of certain contingencies.

    Como
    a result of such review, the Company has restated the financial statements for the fiscal year ended June 30, 2017 as well as
    those for the fiscal quarters ended March 31, 2018, December 31, 2017 and September 30, 2017.

    Como
    a result of the errors described above, management has concluded that the Company’s internal control over financial reporting
    and its disclosure controls and procedures were not effective as of the ends of each of the applicable restatement periods.

    En
    connection with above finding, the Audit Committee commenced an independent investigation into the reasons that led to the Company’s
    conclusion that the previously filed financials should no longer be relied upon. Specially, the Audit Committee engaged an independent
    investigation team to investigate the circumstances surrounding errors in Company’s financial statements, which primarily
    resulted from the omission of certain actual and contingent legal liabilities. The investigation concluded in mid-November 2018.
    The investigation team found several reasons that appear to have caused, or contributed to, the failures to promptly identify
    and disclose the legal proceedings and contingencies, including, 1) the Head of the Legal Department’s significant lack
    of understanding of the important of timely disclosure of legal proceedings and the Legal Department’s problematic decision-making
    process with regard to reporting of legal proceedings; 2) the Company’s lack of accounting personnel trained in U.S. GAAP;
    3) the Company’s need for a full-time CFO; 4) the ongoing lack of communication and coordination between executive management
    and the various departments within the Company; and 5) the Company’s failures to timely address significant deficiencies
    and material weaknesses in the Company’s internal control over financial reporting.

    Como
    of the date of this Annual Report, the Company has completed its process of conducting a comprehensive review of the issues
    identified by the investigation team and has taken all remedial measures recommended by the Audit Committee within its
    resources to cure the majority of its material weaknesses in its internal and disclosure control
    procedures.

    Matters
    relating to or arising from the Audit Committee investigation and the associated material weaknesses identified in our internal
    control over financial reporting, including adverse publicity, have caused us to incur significant legal, accounting and other
    professional fees and other costs, have exposed us to greater risks associated with other civil litigation, regulatory proceedings
    and government enforcement actions, have diverted resources and attention that would otherwise be directed toward our operations
    and implementation of our business strategy and may have impacted our ability to attract and retain customers, employees and vendors.

    Regulations

    los
    Company has been in compliance with all registrations and requirements for the issuance and maintenance of all licenses and certificates
    required by the applicable governing authorities, including the Ministry of Construction and the Beijing Administration of Industry
    & Commerce. The Ministry of Construction awards Level II and Level III qualifications to concrete producers in the PRC construction
    industry, based on criteria such as production capacity, technical qualifications, registered capital and capital equipment, as
    well as performance on their past projects. Level II companies are licensed to produce concrete of all strength levels as well
    as special concretes, and Level III producers are licensed to produce concrete with strength level C60 and below. We are currently
    a Level II concrete producer.

    Adicionalmente,
    to make improvements at our currently existing plant, we do not need to apply for regulatory approval. However, should we build
    new concrete plants, we will need to (i) apply for a business license from the local Administration of Industry and Commerce,
    (ii) receive environmental approval from the local Environmental Protection Bureau in the relevant district area, and (iii) apply
    for an Industry Qualification Certificate from the local Municipal Construction Committee. The time estimated to receive each
    of these approvals is approximately one month. In the past, we have not been rejected by any of these three regulators for approval.

    Organizational
    Structure

    We
    own all of the issued and outstanding capital stock of Xin Ao Construction Materials, Inc., or “BVI-ACM”, a British
    Virgin Islands corporation, which in turn owns 100% of the outstanding capital stock of Beijing Ao Hang Construction Materials
    Technology Co., Ltd., or “China-ACMH”, a company incorporated under the laws of China. On November 28, 2007, China-ACMH
    entered into a series of contractual agreements with Beijing Xin Ao Concrete Group Co., Ltd., or “Xin Ao”, a company
    incorporated under the laws of China, and its two shareholders, in which China-ACMH effectively took over management of the business
    activities of Xin Ao and has the right to appoint all executives and senior management and the members of the board of directors
    of Xin Ao. The contractual arrangements are comprised of a series of agreements, including an Exclusive Technical Consulting and
    Services Agreement and an Operating Agreement, through which China-ACMH has the right to advise, consult, manage and operate Xin
    Ao for an annual fee in the amount of Xin Ao’s yearly net profits after tax. Additionally, Xin Ao’s shareholders have
    pledged their rights, titles and equity interest in Xin Ao as security for China-ACMH to collect technical consulting and services
    fees provided to China-ACMH through an Equity Pledge Agreement. In order to further reinforce China-ACMH’s rights to control
    and operate Xin Ao, Xin Ao’s shareholders have granted China-ACMH the exclusive right and option to acquire all of their
    equity interests in Xin Ao through an Option Agreement.

    On August 20, 2018, CACM Group NY, Inc.
    (“CACM”) was incorporated in the State of New York and is wholly owned by Huitao Technology Co., Ltd. The establishment
    of CACM is to expand the Company’s construction material business in New York. As of the date of the report, CACM has not
    commenced any operations.

    En
    December 31, 2018, we consummated a second reincorporation merger pursuant to which we merged with and into our whole-owned subsidiary,
    China Advanced Construction Materials Group, Inc., a newly formed Cayman Islands company and the surviving entity in the merger,
    pursuant to the terms and conditions of an Agreement and Plan of Merger adopted in July 2018. As a result of the reincorporation,
    the Company is now governed by the laws of the Cayman Islands.

    Organizational
    Structure Chart

    los
    following diagram illustrates our corporate structure, including our subsidiaries and consolidated affiliated entities, as of
    the date of this report:

    Property,
    Plants and Equipment

    There
    is no private land ownership in China. Individuals and companies are permitted to acquire land use rights for specific purposes.
    We lease our 44,041 square meter facility located at Jia 1, SanTaiShan, XiaoHongMen County, ChaoYang District, Beijing, China,
    from Beijing SanTaiShan Chemical Trading & Logistics Co., who was granted land use rights from the PRC government. The lease
    provides for a four-year term beginning on October 1, 2013, with the option to extend following expiration. The lease was extended
    to September 30, 2022. The annual rent on the property is approximately $409,000. We also have a lease agreement for roadway access
    to the west side entry of the concrete service plant with an unrelated party, which will expire on June 30, 2019 and is currently
    under negotiation for renewal terms, with annual payment of approximately $15,000. In addition, we have a lease agreement for
    office space from Mr. Weili He, the Company’s Interim Chief Financial Officer, through October 31, 2023, with annual payments
    of approximately $24,000. We also have a lease agreement for an office space in New York through May 31, 2019, with annual
    payments of $27,600, and the lease has been extended from June 1, 2019 to May 31, 2020 with annual payments of $28,980.

    We
    have an extensive fleet of 78 transit mounted concrete mixers, 10 pump trucks, and we have access to an additional 11 concrete
    mixers and 5 pump truck vehicles for lease in Beijing depending on specific project requirements.  More than half of the
    vehicles are equipped with GPS and tracking devices from the plant central dispatch center in order to optimize capacity utilization,
    production and delivery schedules.

    Legal
    Proceedings

    From
    time to time, the Company is a party to various legal actions. The majority of these claims and proceedings relate to or
    arise from, commercial disputes, labor contract complaints and sales contract complaints. The Company accrues costs related
    to these matters when they become probable and as a result the amount of loss can be reasonably estimated (See Dispute
    Matters Arising in the Ordinary Course of Business for more information). In determining whether a loss from a claim is
    probable, and if it is possible to estimate the loss, the Company reviews and evaluates its litigation and regulatory matters
    on at least a quarterly basis in light of potentially relevant factual and legal developments. If the Company determines a
    favorable outcome is probable, or that the amount of loss cannot be reasonably estimated, the Company does not accrue costs
    for a potential litigation loss. In those situations, the Company discloses an estimate of the probable losses or a range of
    possible losses, if such estimates can be made as indicated below (See Legal Matters). Currently, except as otherwise noted
    below, the Company does not believe that it is possible to estimate the potential losses incurred or a range of reasonably
    possible losses related to the outstanding claims. Legal costs incurred in connection with loss contingencies are expensed as
    incurred.

    As of June 30, 2019, the Company’s
    VIE, Xin Ao, was subject to several civil lawsuits for which the Company estimated that it is more than likely to pay judgments
    in the amount of approximately $6.6 million (including interest and penalties of $1.3 million). These amounts are presented in
    the accompanying consolidated balance sheets (See Accrued Contingent Liabilities). During the years ended June 30, 2019, 2018
    and 2017, additional estimated claims charges of approximately $3.5 million, $2.8 million and $1.3 million, on some of the remaining
    claims are presented in the accompanying consolidated statements of operations under the caption “Estimated claims charges,”
    respectively.

    In addition, the Company is in default of its bank loan agreement for which the bank obtained a court
    order demanding the immediate repayment of the debt in May 2019. The balance due to the bank is approximately $24.7 million as
    of June 30, 2019. The Company has not made the repayment.

    Como
    of the filing of this Report, the Company’s management does not expect any other material liability from the disposition
    of claims from litigation individually, or in the aggregate that would have a material adverse impact on the Company’s consolidated
    financial position, results of operations and cash flows.

    Due
    to the Company’s operations in the PRC and the legal environment in the PRC, it is possible that the Company’s VIE,
    Xin Ao could be named as a defendant in additional litigation based upon the guarantees of Mr. Han and Mr. He and/or their related
    parties.

    (i) Disputes
        Arising in the Ordinary Course of Business

    As of June 30, 2019, the Company had approximately $6.6 million in accrued contingent liabilities, net
    of amounts paid by a related party of approximately $2.4 million, and approximately $3.5 million of additional estimated claims
    charges for the year ended June 30, 2019. As of June 30, 2019, further details regarding the type of litigation disputes and accrued
    costs associated with the claims are summarized as follows:

    Dispute matter Claim
    amount as of June 30,
    2019
    Interest and penalties Total claim amount as of June 30,
    2019
    1) Guarantees PS 2,155,740 PS 352,411 PS 2,508,151
    2) Sales 20,177 9,284 29,461
    3) Purchases 1,367,237 175,069 1,542,306
    4) Leases 3,808,038 670,914 4,478,952
    5) Labor 26,204 – 26,204
    6) Others 307,222 135,866 443,088
    Total PS 7,684,618 PS 1,343,544 9,028,162
    Payments made by related party (2,436,977 )
    Accrued contingent liabilities PS 6,591,185

    As of June 30, 2019, the Company’s
    VIE, Xin Ao, was subject to several civil lawsuits with potential judgments of approximately $26.7 million and the likelihood
    of the outcome of these lawsuits cannot be determined as of the date of this report. These lawsuits involved with the Company
    were mainly due to the personal guarantees by Mr. Xianfu Han, and Mr. Weili He, the Company’s shareholders and former officers,
    and of which they are also the shareholders of Xin Ao. Because Mr. Han and Mr. He were the controlling shareholders of Xin Ao,
    the plaintiffs included Xin Ao in their joint complaints. Xin Ao was not involved in some of the lawsuits but named as a joint
    defendant in the lawsuits. As a result, Xin Ao might have exposure to the pending and additional judgements in the future under
    PRC laws.

    En
    September 28, 2018, Mr. Han and Mr. He signed an agreement with the Company to indemnify the Company for these liabilities and
    personally become responsible for all of the pending potential judgement amounts from these related civil lawsuits. Both Mr. Han
    and Mr. He agreed to liquidate their personal assets or their ownership interest in their privately held companies to pay for
    any of the pending potential judgement amounts of approximately $26.7 million.

    En
    November 14, 2019, Mr. Han and Mr. He entered into an amendment No. 2 to the indemnification agreement to clarify the indemnification
    terms which Mr. Han and Mr. He’s certain actions including but not limited to personal guarantees, loans or investments
    in their own name to other entities which has caused Xin Ao to be involved as a co-defendant in certain legal proceedings. señor.
    Han and Mr. He have agreed to unconditionally indemnify Xin Ao for all losses, damages, legal fees, expenses or other costs related
    to the legal proceedings whereby Xin Ao was named as a co-defendant or defendant due to Mr. Han and Mr. He being a shareholder
    of Xin Ao. The indemnification for the amended terms are irrevocable. In addition, Mr. Han and Mr. He agreed to unconditionally
    indemnify Xin Ao for all the losses, damages, legal fees, expenses and other costs, including additional interest, related to
    the legal proceedings accrued and contingencies determined in the future.

    los
    type of litigation disputes with contingencies associated are summarized as follows as of June 30, 2019:

    Dispute matter Claim
    amount as of
    June 30,
    2019
    Interest and penalties Total claim amount as of
    June 30,
    2019
    1) Guarantees PS 59,127,585 PS 10,171,070 PS 69,298,655
    2) Purchases 2,771,981 71,649 2,843,630
    3) Leases 8,852,874 – 8,852,874
    4) Labor 227,963 – 227,963
    Total PS 70,980,403 PS 10,242,719 81,223,122
    Settled claims (54,474,782 )
    Remaining claims amount PS 26,748,340

    los
    major legal cases are summarized as follows:

    1) Claims
    Resulting from Executives’ Personal Guarantee to Affiliated Entities

    (a) Mr. Xianfu Han, the former CEO and director of the Company and a shareholder of Xin Ao, Mr. Weili He,
    the former interim CFO and director of the Company and a shareholder of Xin Ao, and Xin Ao (the “Defendants”) were
    parties to a lawsuit filed on June 23, 2017, by China Cinda Asset Management Co., Ltd. Beijing Branch (“Cinda Beijing Branch”)
    in the Beijing First Intermediate People’s Court (the “Beijing Intermediate Court”) to seek compensatory damages,
    liquidated damages, costs, and attorney’s fees for default in a certain loan repayment. The loan agreement was entered into
    by and between Xin Ao Ecological Construction Materials Co., Ltd. (“Borrower”) and Cinda Beijing Branch dated as of
    June 23, 2014 with Mr. Han and Mr. He acting as the guarantors for such loans (the “Guarantors”). Mr. Han and Mr. He
    together are the controlling shareholders of the Borrower, holding an aggregate of 60% equity interests of the Borrower. The aggregate
    amount of the loan was approximately $42.0 million (RMB 288,506,497) with interest at 12.8% per annum (the “Loan”).
    Cinda Beijing Branch alleged that since the Borrower breached its obligation to make the repayment of the Loan on the maturity
    date, the Guarantors, along with Xin Ao and those entities owned or controlled by the Guarantors, should be brought into the lawsuit
    as co-defendants (the “Defendants”). On July 5, 2017, Beijing Intermediate Court ruled in favor of Cinda Beijing Branch
    and issued a judgment for execution to freeze the Defendants’ assets, an aggregate amount of approximately $44.4 million
    (RMB 304,972,608) which shall be used for the repayment of the Loan, the liquidated damages, the interest on the Loan, and other
    costs and expenses undertaken by Cinda Beijing Branch. Following the mediation, China Cinda Asset Management Co., Ltd. (“Cinda”),
    two shareholders of Da Tong Lianlv Technologies Co., Ltd. (“Datong Lianlv”), Beijing Ao Huan Fund Management Co., Ltd.
    (“Ao Huan”), and Shou Tai Jin Xin (Chang Xing) Investment Management Co., Ltd (“Jin Xin”) entered into
    a certain limited partnership agreement (the “Partnership Agreement”) on December 22, 2017 to settle the lawsuit. Datong
    Lianlv is an affiliate of the Company and Xin Ao. Cinda is the parent company of Cinda Beijing Branch. As provided in the Partnership
    Agreement, the distributions of the limited partnership shall be allocated to Cinda first, who made a capital contribution in the
    form of its rights, title and interests in and to the repayment of the Loan in an aggregate amount of approximately $46.9 million
    (RMB 322,435,300) (the “Capital Contribution”). Pursuant to the Partnership Agreement, payment shall be made until
    Cinda has received an amount equal to the aggregate of its unreturned Capital Contributions and a cumulative distribution equal
    to 7.5% of all distributions made. Datong Lianlv made its capital contribution in cash in an aggregate amount of approximately
    $21.8 million (RMB 150,000,000) along with its shareholders consent to transfer 99% of Datong Lianlv’s equity interests to
    the limited partnership. The PRC legal counsel of Xin Ao indicated that Cinda and Cinda Beijing Branch orally confirmed that this
    claim was fully settled in the form of the Partnership Agreement. In February 2018, the Cinda Beijing Branch filed an enforcement
    order with the court as the partnership had not been formed at that time. The partnership was subsequently formed in March 2018. In December 2018, a new management team of the Cinda Beijing Branch asked to review all litigation, including
    this case as they were not fully aware of the resolution. On December 28, 2018, the Court re-executed their prior order against
    Xin Ao and other defendants. Accordingly, Xin Ao and other defendants remain liable due to court ruling and remain subject to continuous
    execution orders as long as the plaintiff initiates execution orders against Xin Ao and other defendants in the future. No attempt
    to collect payment from Xin Ao has been made since the enforcement order was filed in February and December 2018. Based upon the
    legal opinion issued by the Company’s PRC legal counsel, Xin Ao believes a favorable outcome is probable and has no exposure
    for the pending judgements as the enforcement order has been resolved with the establishment of the Partnership.

    (b) On July 11, 2018, Chengde County Rural Cooperatives Credit Union (the “Credit Union”) filed
    an arbitration demand (“Arbitration Demand”) with the People’s Court of Shuangqiao District, Chengde, Hebei Province
    (“Shuangqiao Court”) against certain entities and individuals (collectively the “Respondents”) including
    Xin Ao and Chengde Tianhang Concrete Co Ltd. (“Chengde Tianhang”) and Chengde Kaixuan Real Estate Development Co. Ltd.
    (“Chengde Kaixuan”) in connection with Chengde Tianhang’s potential default in its loan repayment. In accordance
    with the loan agreement, Mr. Weili He and Mr. Xianfu Han together acted as the guarantors for such loan. In addition, Mr. Han and
    Mr. He were the controlling shareholders and officers of Xin Ao. They are also the shareholders of Chengde Tianhang. Mr. Han
    and Mr. He were therefore named as co-respondents in the Arbitration Demand, where the Bank sought property preservation. Shuangqiao
    Court, accepting the Arbitration Demand of the Bank, rendered a decision to seize the bank deposits or equivalents of Respondent
    in an aggregate amount of approximately $3.8 million (RMB 26,000,000). Currently, none of the Company’s funds on deposit
    have been seized.

    (c) On October 9, 2017, Yong Fan filed a lawsuit against Beijing Lianlv Technology Group Co. Ltd (“Beijing
    Lianlv”), Xin Ao, and Mr. Weili He, in connection with Beijing Lianlv’s failure to pay off the principal and interest
    of approximately $0.4 million (RMB 2,927,400) under its loan agreement (the “Loan Agreement”). Given that Mr. Weili
    He acted as the guarantor for such loan, Mr. He was brought into the lawsuit as one of the co-defendants. Since Mr. He is
    one of the controlling shareholders of Xin Ao, Xin Ao was also brought into the lawsuit as one of the co-defendants. The Court
    rendered a judgement in May 2018, ruling that

    1) Beijing Lianlv shall pay Yong Fan approximately $0.4 million (RMB 2,895,000) as principal of the loan
    and approximately $5,000 (RMB 32,400) as interest on the loan. As of the date of this report, Beijing Lianlv has not made any payment
    and the Company is currently in the process of appealing the judgement;

    2) Xin
        Ao and Mr. Weili He are entitled to the right of recourse to Beijing Lianlv.

    (a) Nanling Yirui Materials Supplier Co., Ltd. (Nanling Yirui”) filed a lawsuit against Sihong Jinghong
    Sheng Concrete Co., Ltd. (“Sihong”) on October 23, 2017 in the People’s Court in Nanling County, Anhui Province,
    to seek compensatory damages, interest and attorney’s fees. A Raw Material Purchase Agreement was entered into by and between
    Nanling Yirui and Sihong on April 30, 2017. The purchase price of raw materials supplied by Nanling Yirui was approximately $0.5
    million (RMB 3,452,799), the payment of which was overdue. Mr. Xianfu Han and Mr. Weili He are the shareholders of Sihong. Since
    Mr. Han and Mr. He were the controlling shareholders of Xin Ao, Xin Ao was also brought into the lawsuit as a co-defendant. los
    Court rendered a final judgement in June 2018 in favor of Nanling Yirui. As of the date of the report, Sihong has not made any
    payment. On November 12, 2018, the court executed a demand and froze Xin Ao’s bank deposit of approximately $0.5 million
    (RMB 3,489,727). The Company appealed for the execution and explained that Xin Ao was not involved in the transaction. The Court
    granted the appeal. Currently, none of the Company’s funds on deposit have been seized.

    (b) On August 8, 2018, Shenzhen High-tech National Finance Education Information Technology Co., Ltd. (“Shenzhen
    High-tech”) filed an arbitration demand (“Arbitration Demand”) with People’s Court of Haidian District,
    Beijing against Tangshan Yitong Netcom Logistics Co., Ltd. (“Tangshan Yitong”), Tangshan Xinglong, Ruihai Dong and
    Xin Ao (collectively the “Respondents”) in connection with Tangshan Yitong’s breach of a finance lease agreement
    by failing to pay the rent for a total of approximately $1.8 million (RMB 12,656,282) from September 3, 2014 to September 2, 2017.
    In accordance with the finance agreement, Xin Ao, as the guarantor on such agreement, was named as co-respondent to the Arbitration
    Demand. The case is still preliminary review by the court. Based upon the opinion of the Company’s internal legal counsel,
    Xin Ao believes a favorable outcome is probable.

    (a) On January 29, 2018, Xugong Group Construction Equipment Co., Ltd. (“Xugong”) filed a lawsuit
    with People’s Court of Xuzhou Economic and Technological Development Zone District, Jiangsu (“Xuzhou Court”)
    against Xin Ao and Jingshengding (collectively the “Respondents”) in connection with Xin Ao’s breach of a finance
    lease agreement signed on June 19, 2012 by failing to pay the rent of five concrete pump trucks together with default interests
    for a total of approximately $0.4 million (RMB 2,593,839). The case is still under preliminary review by the court. Based upon
    the opinion of the Company’s internal legal counsel, Xin Ao believes a favorable outcome is probable.

    (b) On January 24, 2019, Citic Futong Finance Lease Co., Ltd. (“Citic Futong”) filed an arbitration
    demand (“Arbitration Demand”) with People’s Court of Dongcheng District, Beijing (“Dongcheng Court”)
    against Tianjin Hump Investment Co., Ltd. (“Tianjin Hump”) and Xin Ao (collectively the “Respondents”)
    in connection with Tianjin Hump’s breach of a finance lease agreement by failing to pay the rent of a mineral waste grind
    production line for a total of approximately $8.2 million (RMB 56,250,000) from September 3, 2014 to September 1, 2017. In accordance
    with the finance lease agreement, Xin Ao, as the guarantor on such lease, was named as co-respondent to the Arbitration Demand.
    After investigation, Dongcheng Court rendered that the original finance lease agreement is invalid and Xin Ao does not need to
    make any payment. The plaintiff appealed, and Dongcheng Court rejected the plaintiff’s arbitration demand again and suspended
    the trail on October 22, 2019 due to lack of evidence. The plaintiff can apply for retrial if they can provide enough evidence
    in the future.

    During 2017, Sihong Jinghong
    Sheng Concrete Co., Ltd. (“Sihong”) was subject to certain labor disputes. The potential total amounts of judgment
    is approximately $0.2 million (RMB 1,702,000). Since Mr. Xianfu Han and Mr. Weili He were the controlling shareholders of Xin Ao,
    Xin Ao was also brought into the lawsuit as a co-defendant. As of the date of the report, Sihong has not made any payment.

    ITEM
    4A.
    UNRESOLVED
        STAFF COMMENTS

    No
    Applicable

    ITEM
    5.
    OPERATING
        AND FINANCIAL REVIEW AND PROSPECTS

    los
    following discussion and analysis of our financial condition and results of operations should be read in conjunction with our
    consolidated financial statements that appear in this annual report. In addition to historical consolidated financial information,
    the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results
    could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these
    differences include those discussed below and elsewhere in this annual report, particularly in “Risk Factors.” All
    amounts in included in the fiscal years ended June 30, 2019, 2018 and 2017 (“Annual Financial Statements”) are derived
    from our audited consolidated financial statements included elsewhere in this annual report. These Annual Financial Statements
    have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.

    5A.
    Operating Results

    Overview

    We
    are a holding company whose primary business operations are conducted through our wholly-owned subsidiaries CACM Group NY, Inc.
    (“CACM”), Xin Ao Construction Materials, Inc. (“BVI-ACM”), Beijing Ao Hang Construction Material Technology
    Co., Ltd. (“China-ACMH”), and our variable interest entity, Beijing XinAo Concrete Group (“Xin Ao”) and
    its subsidiaries. We engage in the production and supply of advanced construction materials for large-scale commercial, residential,
    and infrastructure developments, and are primarily focused on producing and supplying a wide range of advanced ready-mix concrete
    materials for highly technical, large-scale, and environmentally-friendly construction projects that are only sold in the People’s
    Republic of China (“PRC”).

    During
    the years ended June 30, 2019, 2018 and 2017, we supplied materials and provided services to our projects through one ready-mixed
    concrete plant in Beijing.

    Our
    management believes that we have the ability to capture a greater share of the Beijing market via expanding relationships and
    networking, signing new contracts, and continually developing market-leading innovative and eco-friendly ready-mix concrete products.

    Principal
    Factors Affecting Our Financial Performance

    We
    believe that the following factors will continue to affect our financial performance:

    – Large-Scale Contractor
        Relationships. We have contracts with major construction contractors that are constructing key infrastructure, commercial
        and residential projects. Our sales efforts focus on large-scale projects and large customers which place large recurring
        orders and present less credit risk to us. For the years ended June 30, 2019, we had two customers accounting for approximately
        25.1% and 13.5% of total sales. Should we lose any large-scale customers in the future and are unable to obtain additional
        customers, our revenues will suffer.
    – Experienced Management.
        Management’s technical knowledge and business relationships give us the ability to secure major infrastructure projects,
        which provides us with leverage to acquire less sophisticated operators, increase production volumes, and implement quality
        standards and environmentally sensitive policies. If there were to be any significant turnover in our senior management, it
        could deplete the institutional knowledge held by our existing senior management team.
    – Innovation Efforts.
        We strive to produce the most technically and scientifically advanced products for our customers and maintain close relationships
        with Tsinghua University, Xi’an University of Architecture and Technology and Beijing Dongfang Jianyu Institute of Concrete
        Science & Technology. We entered into technical service contracts with these research institutes to further improve our
        production and products. If our research and development efforts are not sufficient to adapt to the change in technology in
        the industry, our products may not compete effectively.
    – Competition. Our
        competition includes a number of state-owned and large private PRC-based manufacturers and distributors that produce and sell
        products similar to ours. We compete primarily on the basis of quality, technological innovation and price. Essentially, all
        of the contracts on which we bid are awarded through a competitive bidding process, with award contracts often being made
        awarded to the lowest bidder, though other factors such as shorter schedules or prior experience with the customer are often
        just as important. Within our markets, we compete with many national, regional and local state- owned and private construction
        entities some of which have achieved greater market penetration or have greater financial and other resources than us. En
        addition, there are a number of larger national companies in our industry that could potentially establish a presence in our
        markets and compete with us for contracts. If we are unable to compete successfully in our markets, our relative market share
        and profits could be reduced.

    Comparison
    of the years ended June 30, 2019 and 2018

    Revenue.
    Our revenue is primarily generated from sales of our advanced ready-mix concrete products. For the year ended June 30, 2019, we
    generated revenue of approximately $43.6 million, as compared to approximately $45.7 million during the year ended June 30, 2018,
    a decrease of approximately $2.1 million, or 5%. The decrease was primarily due to the depreciation of Chinese Reminbi (“RMB”)
    against the U.S. dollar of 4.9%. The decrease in revenue was also caused by 2.5% decrease of sales volume. Starting on November
    15, 2017, certain districts of the local government implemented the suspension or production limitation policy on some of our
    customers. Additionally, there were fewer construction jobsites in Beijing area as compared with the same period of last year,
    which caused the demand of concrete products to decrease. The decrease was partially offset by the increase of unit price which
    was due to the increase of our unit cost.

    Cost
    of Revenue
    . Cost of revenue, which consists of direct labor, rentals, depreciation, other overhead and raw materials,
    including inbound freight charges, was approximately $39.1 million for the year ended June 30, 2019, as compared to approximately
    $39.0 million for the year ended June 30, 2018, an increase of approximately $71,000, or 0.2%. The increase in cost of revenue
    was primarily caused by unit price inflation of our raw materials, such as stone, slag powder and mine powder for the year ended
    June 30, 2019, as compared to the same period in 2018. Additionally, the unit price of sand increased most among all the raw materials.
    The government started to enhance the sand mining management along the Yangtze River to protect the environment in July 2018 which
    caused the supply of sand to decrease. The unit price of sand is expected to keep going up, and we are working on finding a suitable
    substitute for sand to increase our gross margin.

    Gross
    Profit
    . Gross profit was approximately $4.6 million for the year ended June 30, 2019, as compared to approximately $6.7
    million of gross profit for the year ended June 30, 2018, a negative change of approximately $2.1 million, which was primarily
    due to the decrease of sale volume of concrete and the increase of unit production cost during the year ended June 30, 2019 as
    compared to the same period in 2018 for the reasons as discussed above.

    Provision
    for Doubtful Accounts
    . We made a provision of doubtful accounts charge of approximately $2.6 million for the year ended
    June 30, 2018 as compared to provision of doubtful accounts charge of approximately $2.2 million during the year ended June 30,
    2017, an increase of approximately $0.4 million, or 17%. The change was attributable to the fact that we collected less of our
    aged accounts receivable and other receivables that were over 720 days past due during the year ended June 30, 2019 as compared
    to the same period in 2018 and we correspondingly resulted in more provision for doubtful accounts in accordance with our allowance
    policy in 2019. The increase was offset by a recovery of doubtful accounts of prepayments – related party as we have received
    most inventories we made prepayments for from the related party.

    Selling,
    General and Administrative Expenses
    . Selling, general and administrative expenses consist of sales commissions, advertising
    and marketing costs, office rent and expenses, costs associated with staff and support personnel who manage our business activities,
    and professional fees paid to third parties. We incurred selling, general and administrative expenses of approximately $7.3 million
    for the year ended June 30, 2019 as compared to approximately $6.7 million for the year ended June 30, 2018, an increase of approximately
    $0.6 million. The increase was primarily due to a $0.2 million increase in legal expenses, a $0.2 million increase in consulting
    fees, a $0.1 million increase in repairs and maintenance expense and $0.1 million increase in meals and entertainment expense
    as compared to the year ended June 30, 2018.

    Research
    and Development Expenses
    . Research and development expenses were approximately $0.2 million for the year ended June 30,
    2019 as compared to $1.2 million for the same period in 2018. We decreased our research and development expenditures during this
    period as we deemed the quality of our products is competitive in the market and we can spend minimum research and development
    cost to remain competitive with the quality of our products.

    Loss
    from Operations.
    We incurred a loss from operations of approximately $8.8 million and a loss of approximately $3.3 million
    for the years ended June 30, 2019 and 2018, respectively. The negative change of approximately $5.5 million was primarily due
    to the reasons previously discussed.

    Otro
    Income (Expense), Net
    . Our other income (expense) consists of interest income (expense), finance expense and other non-operating
    income (expense). We had other expense of approximately $4,000 and other income of approximately $112,000 during the years ended
    June 30, 2019 and 2018, respectively. We earned interest income of approximately $2,000 and $6,000 for the years ended June 30,
    2019 and 2018, respectively. Approximately $2.0 million and $1.4 million of interest expense was recorded for the years ended
    June 30, 2019 and 2018, and approximately $13,000 and $5,000 of finance expense was recorded for the years ended June 30, 2019
    and 2018. Approximately $3.5 million and $2.8 million of estimated claims charges and its related interest charges were recorded
    for the years ended June 30, 2019 and 2018 due to legal actions related to several lawsuits against Xin Ao.

    Provision
    for Income Taxes.
    We did not incur income tax expense for the years ended June 30, 2019 and 2018 as we had net operating
    losses.

    Net
    Loss.
    We incurred net loss of approximately $14.4 million for the year ended June 30, 2019, as compared to a net loss
    of approximately $7.4 million for the year ended June 30, 2018. This change was the result of the combination of the changes as
    discussed above.

    Comparison
    of the years ended June 30, 2018 and 2017

    Revenue.
    Our revenue is primarily generated from sales of our advanced ready-mix concrete products. For the year ended June 30, 2018, we
    generated revenue of approximately $45.7 million, as compared to approximately $45.0 million during the year ended June 30, 2017,
    an increase of approximately $0.7 million, or 2%. The increase in revenue was principally due to increased selling unit price
    by 21.7% resulting from the turnaround of the concrete industry. In late 2017, the local government shut down a number of small
    and non-qualified concrete manufactures, which led to less competition in the industry and drove up the selling price of the concrete
    as the supply of concrete was reduced. The increase was also due to the appreciation of Chinese Reminbi (“RMB”) against
    the U.S. dollar of 4.5%. The increase in revenue was offset by 20.3% decrease of sales volume due to the suspension or production
    limitation policy enforced by certain districts of the local government on some of our customers starting on November 15, 2017.
    The policy prohibits construction jobsites in certain areas from producing industrial waste or dust to aggravate winter haze weather
    during the winter time. Our production returned to normal levels on March 15, 2018 after the suspension and production limitations
    were removed from our customers.

    Cost
    of Revenue
    . Cost of revenue, which consists of direct labor, rentals, depreciation, other overhead and raw materials,
    including inbound freight charges, was approximately $39.0 million for the year ended June 30, 2018, as compared to approximately
    $43.9 million for the year ended June 30, 2017, an decrease of approximately $4.9 million, or 11%. The decrease in cost of revenue
    was primarily associated with the decrease in our sales volume mainly due to the suspension or production limitation policies
    as discussed above partially offset by the increase of unit production costs of 6.5%, which was principally caused by unit price
    inflation of our raw materials, such as cement, stone, slag powder and mine powder for the year ended June 30, 2018, as compared
    to the same period in 2017.

    Gross
    Profit
    . Gross profit was approximately $6.7 million for the year ended June 30, 2018, as compared to approximately $1.1
    million of gross profit for the year ended June 30, 2017, a positive change of approximately $5.6 million, which was primarily
    due to the increase of our selling price of concrete at a higher rate than the slight increase of unit production cost during
    the year ended June 30, 2018 as compared to the same period in 2017 for the reasons as discussed above.

    Provision
    for Doubtful Accounts
    . We made a provision of doubtful accounts charge of approximately $2.2 million for the year ended
    June 30, 2018 as compared to provision of doubtful accounts charge of approximately $3.4 million during the year ended June 30,
    2017, a decrease of approximately $1.2 million, or 35%. The change was attributable to the fact that we collected more of our
    aged accounts receivable and other receivables that were over 720 days past due during the year ended June 30, 2018 as compared
    to the same period in 2017 and we correspondingly resulted in recovery for doubtful accounts in accordance with our allowance
    política. The decrease was offset by an increase of the provision of doubtful accounts of prepayments – related party as the
    related party is being named as a joint defendant in one of our civil lawsuits, so we made approximately $0.3 million allowance
    for prepayments – related party.

    Selling,
    General and Administrative Expenses
    . Selling, general and administrative expenses consist of sales commissions, advertising
    and marketing costs, office rent and expenses, costs associated with staff and support personnel who manage our business activities,
    and professional fees paid to third parties. We incurred selling, general and administrative expenses of approximately $6.7 million
    for the year ended June 30, 2018 as compared to approximately $5.7 million for the year ended June 30, 2017, an increase of approximately
    $1.0 million. The increase was primarily due to a $0.1 million increase in legal expenses and $1.1 million increase in compensation
    expense. The increase was offset by $0.1 million decrease in social insurance expense and $0.1 million decrease in meals and entertainment
    expense as compared to the year ended June 30, 2017.

    Research
    and Development Expenses
    . Research and development expenses were approximately $1.2 million for the year ended June 30,
    2018 as compared to $0.8 million for the same period in 2017. We increased our research and development expenditures during this
    period as we worked to improve our competitive advantage with respect to our products.

    Loss
    from Operations.
    We incurred a loss from operations of approximately $3.3 million and a loss of approximately $8.8 million
    for the years ended June 30, 2018 and 2017, respectively. The decrease of approximately $5.5 million was primarily due to the
    reasons previously discussed.

    Otro
    Income (Expense), Net
    . Our other income (expense) consists of interest income (expense), finance expense and other non-operating
    income (expense). We had other income of approximately $112,000 and $407,000 during the years ended June 30, 2018 and 2017, respectively.
    We earned interest income of approximately $6,000 and $30,000 for the years ended June 30, 2018 and 2017, respectively. Approximately
    $1,360,000 and $831,000 of interest expense was recorded for the years ended June 30, 2018 and 2017, and approximately $5,000
    and $604,000 of finance expense was recorded for the years ended June 30, 2018 and 2017. Approximately $2.8 million and $1.3 million
    of estimated claims interest charges were recorded for the years ended June 30, 2018 and 2017 due to legal actions related to
    several lawsuits against Xin Ao.

    Provision
    for Income Taxes.
    We did not incur income tax expense for the years ended June 30, 2018 and 2017 as we had net operating
    losses.

    En
    December 22, 2017, the “Tax Cuts and Jobs Act” (“The Act”) was enacted. Under the provisions of the Act,
    the U.S. corporate tax rate decreased from 35% to 21%. As we have a June 30 fiscal year-end, the lower corporate income tax rate
    will be phased in, resulting in a U.S. statutory federal rate of approximately 28% for our fiscal year ending June 30, 2018, and
    21% for subsequent fiscal years. Accordingly, we have remeasured our deferred tax asset for net operating loss carryforward in
    the U.S at the lower enacted tax rate of 21%. However, this remeasurment has no effect on our income tax expense as we have provided
    a 100% valuation allowance on our deferred tax assets previously.

    Adicionalmente,
    the Tax Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future
    foreign earnings are subject to U.S. taxation. However, this one-time transition tax had no effect on our income tax expense as
    we have no undistributed foreign earnings through June 30, 2018 as we have cumulative foreign losses as of June 30, 2018.

    Net
    Loss.
    We incurred net loss of approximately $7.4 million for the year ended June 30, 2018, as compared to a net loss of
    approximately $11.0 million for the year ended June 30, 2017. This change was the result of the combination of the changes as
    discussed above.

    5.B.
    Liquidity and Capital Resources

    Como
    of June 30, 2019, we had cash and cash equivalents of approximately $28,000, which was held by our consolidated subsidiaries and
    VIE located outside the U.S. We would be required to accrue and pay U.S. taxes if we were to repatriate these funds. Any company
    which is registered in mainland PRC must apply to the State Foreign Exchange Administration for approval in order to remit foreign
    currency to any foreign country. We currently do not intend to repatriate to the U.S. the cash and short-term investments held
    by our foreign subsidiaries. However, if we were to repatriate funds to the U.S., we would assess the feasibility and plan any
    transfer in accordance with foreign exchange regulations, taking into account tax consequences. As we conduct all of our operations
    in the PRC, the restriction on the conversion of cash and short-term investments held in RMB to other currencies should not affect
    our liquidity.

    In assessing our liquidity, we monitor and
    analyze our cash on-hand and our operating and capital expenditure commitments. Our liquidity needs are to meet our working capital
    requirements, operating expenses and capital expenditure obligations.

    We engage in the production of advanced
    construction materials for large-scale infrastructure, commercial and residential developments. Our business is capital intensive
    and we are highly leveraged. Debt financing in the form of short term bank loans, loans from related parties and bank acceptance
    notes have been utilized to finance the working capital requirements and the capital expenditures of us. Our working deficit was
    approximately $1.1 million as of June 30, 2019. As of June 30, 2019, we had cash on-hand of approximately $0.3 million, with remaining
    current assets mainly composed of accounts receivable and prepayments and advances.

    Although we believe that we can realize
    our current assets in the normal course of business, our ability to repay our current obligations will depend on the future realization
    of our current assets. Management has considered our historical experience, the economic environment, trends in the construction
    industry in the PRC, the expected collectability of its accounts receivable and other receivables and the realization of the prepayments
    on inventory, and provided an allowance for doubtful accounts as of June 30, 2019. We expect to realize the balance of its current
    assets, net of the allowance for doubtful accounts within the normal operating cycle of twelve months.

    However, we are involved in various lawsuits,
    claims and disputes related to our operations and the personal guarantees of our officers to affiliated entities owned by them.
    We are actively defending these actions and attempting to mitigate our exposure to any liability in excess of the current provision
    of approximately $6.6 million, (see Note 14 in the accompanying notes to the consolidated financial statements). The ultimate
    outcome of these pending actions cannot presently be determined, but currently management is of the opinion that any potential
    additional liability would not have a material impact on our consolidated financial position. Nevertheless, due to the uncertainties
    with litigation, the PRC legal system, claims and disputes, it is at least reasonably possible that management’s view of
    the outcome could change in the near term.

    Furthermore, as of June 30, 2019, our VIE,
    Xin Ao, was subject to several civil lawsuits with potential judgments in the amount of approximately $26.7 million (see Note 14
    in the accompanying notes to the consolidated financial statements) and the likelihood of the outcome of these lawsuits cannot
    presently be determined. These lawsuits involve us principally due to the personal guarantees by Mr. Xianfu Han, and Mr. Weili
    He, our shareholders and former officers. Because Mr. Han and Mr. He were the controlling shareholders of Xin Ao, the plaintiffs
    included Xin Ao in their joint complaints. Xin Ao was not involved in most of the lawsuits but named as a joint defendant in the
    lawsuits. As a result, Xin Ao might have exposure to any judgements in the future under PRC laws. Mr. Han and Mr. He have
    agreed to indemnify us for any amounts Xin Ao may have to pay.  Should the outcome of these lawsuits require Xin Ao to pay
    because the other co-defendants of the lawsuits and Mr. Han and Mr. He were unable to liquidate their personal assets or their
    ownership interest in their privately held companies timely to pay for the judgements, our working deficit as of June 30, 2019
    could be increased from approximately $1.1 million to a net working deficit of approximately $27.8 million.

    In addition, the Company is in default
    of its bank loan agreement for which the bank obtained a court order demanding the immediate repayment of the debt in May 2019.
    The balance due to the bank is approximately $24.7million as of June 30, 2019. The Company has not made the repayment.

    Our management has considered whether there
    is a going concern issue due to our recurring losses from operations, the default of the Company’s bank loans, the estimated
    claims charges and the possible additional exposure for pending actions against us which is presently unknown. Management has determined
    there is substantial doubt about our ability to continue as a going concern. If we are unable to generate significant revenue,
    defer payment or the replacement of our current bank loans and secure additional financing or resolve any pending estimated claim
    charges, we may be required to cease or curtail our operations. Our financial statements do not include adjustments that might
    result from the outcome of this uncertainty.

    Management is trying to alleviate the going
    concern risk through equity financing, obtaining financial support, the continued forbearance of the bank, and credit guarantee
    commitments from our officers/shareholders (See Note 8 – Related party transactions) and debt restructuring for most litigation
    liabilities.

    los
    following table provides summary information about our net cash flow for financial statement periods presented in this report:

    For the Years Ended June 30,
    2019 2018 2017
    Net cash (used in) provided by operating activities PS (1,076,142 ) PS 2,450,018 PS 1,700,657
    Net cash used in investing activities (135,705 ) (138,151 ) (210,962 )
    Net cash provided by (used in) financing activities 522,667 (5,795,823 ) (2,056,169 )
    Effect of exchange rate change on cash (62,024 ) 149,203 (104,673 )
    Net change in cash and cash equivalents PS (751,205 ) PS (3,334,753 ) PS (671,147 )

    Principal
    demands for liquidity are for working capital and general corporate purposes.

    Operating
    Activities

    Net cash used in operating activities totaled approximately $1.1 million for the years ended June 30,
    2019, which was attributable to a net loss of $14.4 million and adjustments to reconcile the net loss to net cash used in operating
    activities of approximately $8.3 million, including adjustments for approximately $1.1 million of depreciation, approximately $4.6
    million of stock compensation expense, approximately $2.6 million of a provision for doubtful accounts, and the increase of accounts
    receivable of approximately $6.0 million, excluding a non-cash offset of $9.4 million, payments of other receivables of approximately
    $1.4 million, payments of prepayments and advances of approximately $6.3 million, excluding a non-cash offset of $5.0 million,
    decrease of customer deposits of approximately $0.2 million and decrease of taxes payable of approximately $0.1 million. Net cash
    outflow was primarily offset by the decrease of prepayment – related party of $2.5 million as we have already secured enough
    materials for production from third parties, increase of accounts payable of approximately $10.4 million, excluding a non-cash
    offset of $3.2 million, addition of approximately $0.5 million other payables-shareholders, and an increase of approximately $5.7
    million in accrued liabilities and contingent liabilities, excluding a non-cash offset of $1.2 million.

    Net cash provided by operating activities
    totaled approximately $2.5 million for the year ended June 30, 2018, which was attributable to a net loss of $7.4 million and adjustments
    to reconcile the net loss to net cash provided by operating activities of $4.8 million, including adjustments for $1.2 million
    of depreciation, $1.4 million of stock compensation expense, and $2.2 million of a provision for doubtful accounts. Net cash from
    changes in operating assets and liabilities resulted in a net cash inflow, which mainly included cash inflow for decrease of inventories
    of $0.2 million, decrease of other receivables of $1.5 million, reduction of prepayments and advances of $16.0 million from third
    parties and reduction of prepayments and advances of $4.2 million from a related party as we have already secured enough materials
    for production, the addition of $1.0 million in customer deposits, excluding non-cash offset of $0.7 million, addition of $0.7
    million other payables-shareholders, excluding a non-cash offset of $1.0 million and an increase of $2.8 million in accrued liabilities
    and contingent liabilities, excluding a non-cash offset of $2.5 million. Net cash inflow was primarily offset by an increase of
    accounts receivable of $4.6 million, excluding a non-cash offset of $6.9 million, payments of accounts payable $12.8 million, excluding
    non-cash offset of $6.9 million, payments of other payables of $3.9 million, excluding a non-cash offset of $0.1 million, as we
    had sufficient cash flow to pay down our accounts payable and other payables when due.

    Net cash provided by operating activities
    totaled approximately $1.7 million for the year ended June 30, 2017, which was primarily attributable to the net loss of $11.0
    million, which was offset by the adjustments to reconcile to net cash provided by operating activities of $1.7 million, including
    adjustments for $1.2 million of depreciation, $0.3 million of stock compensation expense, and $3.4 million provision for doubtful
    accounts as well as $7.9 million cash inflow from a change in operating assets and liabilities. Net cash from changes in operating
    assets and liabilities resulted in a net cash inflow, which mainly included cash inflow for reduction in inventories of $0.4 million,
    collection of other receivables of $7.5 million as we increased our efforts on other receivables collections, reduction of prepayments
    and advances net of $12.3 million as we have already secured enough materials for production, additional accounts payable of $0.01
    million, excluding non-cash offset of $1.5 million, as we were in waiting for our accounts receivable collection and maturities
    of notes receivable to repay our vendors, and additional other payables, including related party payables, of $4.1 million, due
    to accrued research and development expenses, accrued salary and rental expense payable to our related parties, and was primarily
    offset by additional accounts receivable of $13.5 million, excluding a non-cash offset of $1.5 million, due to delays in the receipt
    of customer payments, a reduction of customer deposits of approximately $3.6 million and increased accrued liabilities and contingent
    liabilities of $0.6 million.

    Investing
    Activities

    Net
    cash used in investing activities was approximately $0.1 million for the year ended June 30, 2019, which was primarily attributable
    to the purchase of equipment.

    Net
    cash used in investing activities was approximately $0.1 million, excluding $0.1 million non-cash offset of $0.1 million, for
    the year ended June 30, 2018, which was primarily attributable to the purchase of equipment.

    Net
    cash used in investing activities was approximately $0.2 million for the year ended June 30, 2017, which was primarily attributable
    to the purchase of equipment.

    Financing
    Activities

    Net
    cash provided by financing activities totaled approximately $0.5 million for the year ended June 30, 2019, which was primarily
    attributable to approximately $5.0 million in new bank loans, approximately $1.0 million for the sale of ordinary share and approximately
    $24,000 for the borrowings received from shareholders. Net cash inflow was offset by approximately $5.4 million in repayments
    of bank loans.

    Net cash used in financing activities totaled
    approximately $5.8 million for the year ended June 30, 2018, which was primarily attributable to $26.6 million for the repayments
    of bank loans, $14.6 million for the repayments of notes payable. Net cash outflow was offset by $34.7 million in new bank loans,
    $0.1 million borrowings from shareholders, excluding non-cash offset of $1.0 million and receipt of $0.6 million common stock.

    Net cash used in financing activities totaled
    approximately $2.1 million for the year ended June 30, 2017, which was primarily attributable to $20.7 million in cash proceeds
    from bank loans and bank guarantees, $30.4 million in proceeds from notes payable and $0.1 million in borrowing from shareholders,
    which was offset by $19.2 million for the repayment of bank loans and bank guarantees and $34.1 million for the repayment of notes
    payable.

    5.C.
    Research and Development, Patents and Licenses, etc.

    Research
    and Development

    During
    the years ended June 30, 2019, 2018 and 2017, we had research and development expenses of approximately $0.2 million, $1.2 million
    and $0.8 million, respectively.

    5.D.
    Trend Information

    Otro
    than as disclosed elsewhere in this annual report and below, we are not aware of any trends, uncertainties, demands, commitments
    or events that are reasonably likely to have a material effect on our revenues, income from continuing operations, profitability,
    liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future
    operating results or financial condition.

    Contingencies

    los
    Company has been and continues to be a party to various legal actions. The majority of these claims and proceedings relate to
    or arise from, commercial disputes, labor contract complaints and sales contract complaints. The Company accrues costs related
    to these matters when they become probable and as a result the amount of loss can be reasonably estimated (See Dispute Matters
    Arising in the Ordinary Course of Business for more information). In determining whether a loss from a claim is probable, and
    if it is possible to estimate the loss, the Company reviews and evaluates its litigation and regulatory matters on at least a
    quarterly basis in light of potentially relevant factual and legal developments. If the Company determines a favorable outcome
    is probable, or that the amount of loss cannot be reasonably estimated, the Company does not accrue costs for a potential litigation
    loss. In those situations, the Company discloses an estimate of the probable losses or a range of possible losses, if such estimates
    can be made as indicated below (See Legal Matters). Currently, except as otherwise noted below, the Company does not believe that
    it is possible to estimate the potential losses incurred or a range of reasonably possible losses related to the outstanding claims. 
    Legal costs incurred in connection with loss contingencies are expensed as incurred.

    As of June 30, 2019, the Company’s VIE, Xin Ao, was subject to several civil lawsuits for which
    the Company estimated that it is more than likely to pay judgments in the amount of approximately $6.6 million (including interest
    and penalty of $1.3 million and exclusive of the Company’s $24.7 million bank debt in default). These amounts are presented
    in the accompanying consolidated balance sheets (See Accrued Contingent Liabilities). During the years ended June 30, 2019, 2018
    and 2017, additional estimated claims charges of approximately $3.5 million, $2.8 million and $1.3 million, respectively, on some
    of the remaining claims is presented in the accompanying consolidated statements of operations under the caption “Estimated
    claims charges”.

    Como
    of the date of this 20-F, the Company’s management does not expect any other material liability from the disposition of
    claims as of the date of this 20-F report from litigation individually, or in the aggregate that would have a material adverse
    impact on the Company’s consolidated financial position, results of operations and cash flows.

    Due
    to the Company’s operations in the PRC and the legal environment in the PRC, it is possible that the Company’s VIE,
    Xin Ao could be named as a defendant in the litigation based upon the guarantees of Mr. Han and Mr. He and/or their related parties.

    Legal
    matters

    Como
    of June 30, 2019, the Company’s VIE, Xin Ao, was subject to several civil lawsuits with potential judgments of approximately
    $26.7 million and the likelihood of the outcome of these lawsuits cannot be determined as of the date of this report. These lawsuits
    involved with the Company were mainly due to the personal guarantees by Mr. Xianfu Han, and Mr. Weili He, the Company’s
    shareholders and officers, because they are also the shareholders of our VIE, Xin Ao. Because Mr. Han and Mr. He are the shareholders
    of Xin Ao, the plaintiffs included Xin Ao in the joint complaints. Xin Ao was not involved in most of the lawsuits but named as
    a joint defendant in the lawsuits. As a result, Xin Ao might have exposure to the pending judgements in the future.

    los
    type of litigation disputes with contingencies associated are summarized as follows as of June 30, 2019:

    Dispute matter Claim
    amount as of June 30,
    2019
    Interest and penalties Total claim amount as of June 30,
    2019
    1) Guarantees PS 59,127,585 PS 10,171,070 PS 69,298,655
    2) Purchase 2,771,981 71,649 2,843,630
    3) Leases 8,852,874 – 8,852,874
    4) Labor 227,963 – 227,963
    Total PS 70,980,403 PS 10,242,719 81,223,122
    Settled claims (54,474,782 )
    Remaining claims amount PS 26,748,340

    5.E.
    Off-Balance Sheet Arrangements

    Otro
    than as disclosed elsewhere in this annual report, we have not entered into any financial guarantees or other commitments to guarantee
    the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to its shares
    and classified as shareholder’s equity or that are not reflected in its consolidated financial statements. Furthermore,
    we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity
    or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing,
    liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

    5.F.
    Tabular Disclosure of Contractual Obligations

    los
    following table summarizes our contractual obligations as of June 30, 2019:

    Payments due by period
    Contractual obligations Total Less than 1 year 1 – 3 years 3 – 5 years More than 5 years

    Short term loans-banks-in default

    PS 24,686,899 PS 24,686,899 PS – PS – PS –
    Operating lease obligations 1,459,000 459,000 866,000 134,000 –
    Total PS 26,145,899 PS 25,145,000 PS 866,000 PS 134,000 PS –

    ITEM
        6.
    DIRECTORS,
        SENIOR MANAGEMENT AND EMPLOYEES

    6.A.
    Directors, Executive Officers and Key Employees

    los
    following table sets forth information regarding our executive officers and directors as of the date of this report.

    Directors
                                             and Executive Officers

    Años

    Position/Title

    Yang
        (Sean) Liu
    40 Chief
        Executive Officer, Chairman of the Board
    Lili
        Jiang
    29 Chief
        Financial Officer and Director
    Yan
        Zhang
    37 Independent
        Director
    Wei
        Pei
    35 Independent
        Director
    Xiaoyuan
        Zhang
    31 Independent
        Director

    Biografía

    Yang
    (Sean) Liu

    señor.
    Liu has been serving as the Chairman and Chief Executive Officer of the Company since March 28, 2019. He had served as the President
    of MagniFinTech (“Magni”) from May 2017 to March 28, 2019 and served as CEO of Wave Sync Corporation from July 2017
    to August 2018. Prior to joining Magni, Mr. Liu served as the Murex Regional Manager at UBS from November 2015 to May 2017. From
    June 2008 to November 2015, Mr. Liu served as a Senior Consultant, Client Coordinator and Single-point of Contact at Murex North
    America. Mr. Liu has a Bachelor’s degree in Engineering from Tsinghua University in China, as well as two Master’s
    degrees in Financial Mathematics and Electrical Engineering from New Mexico State University.

    Lili
    Jiang

    Ms.
    Jiang has been serving as the Chief Financial Officer and Director of the Company since March 28, 2019. She had served as the
    Manager of the Overseas Medical Business Department of Aolan Health Management Co., Ltd (“Aolan”) from May 2016 to
    March 28, 2019. Prior to joining Aolan, Ms. Jiang was the Business Executive Assistant at the Australian Embassy in China from
    July 2011 to April 2016. She is a Certified Public Accountant in Australia. Ms. Jiang has a Bachelor’s degree in Accounting
    and Finance from Sydney Technical University in Australia, and a Master’s degree in Economics in Finance from University
    of New South Wales in Sydney, Australia.

    Yan
    Zhang

    señor.
    Zhang became a member of our Board of Directors on June 28, 2019. Ms. Zhang served as the Manager of the Shanghai Representative
    Office of AL.EA. Consulting S.r.l. since March 2018. She had served as the Purchasing Manager of Datatool Information Technology
    Co., Ltd. (“Datatool”) from December 2014 to November 2017. Prior to joining Datatool, Ms. Zhang served as the Sourcing
    Supervisor at ACS Auxiliary Equipment (Suzhou) from October 2005 to September 2014. Ms. Zhang has a Bachelor’s degree in
    Food Science and Technology from Huai Hai Institute of Technology in China.

    Wei
    Pei

    señor.
    Pei became a member of our Board of Directors on March 21, 2018. Mr. Pei has served as the Administrative Director of Wanda Picture
    Television & Media Co. since January 2017, responsible for the HR department and administrative office. He also assists the
    management work of some filming development projects of the Company. Before that, he worked at the Wanda Hotel Construction Co.
    since March 2010 in charge of the HR, project management and organizational work. Mr. Pei graduated from Harbin Institute of Technology
    with a bachelor degree in Business Management in 2006.

    Xiaoyuan
    Zhang

    Ms.
    Zhang became a member of our Board of Directors on July 19, 2019. Ms. Zhang has served as the Chief Financial Officer and Treasurer
    of Senmiao Technology Limited (Nasdaq: AIHS) since September 2018. From October 2010 to September 2018, Ms. Zhang served as Senior
    Auditor and Assurance Manager of Ernst & Young Hua Ming LLP, Chengdu Branch, where she participated in audits of several public
    companies listed in China, Hong Kong and Singapore, as well as large state-owned and foreign investment enterprises. Ms. Zhang
    received her dual bachelor’s degrees in accounting and law from Southwestern University of Finance and Economics in Chengdu,
    China. Ms. Zhang is an intermediate accountant and a Certified Public Accountant of the Chinese Institute of Certified Public
    Accountants.

    6.B.
    Compensation

    los
    following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to our principal
    executive officer and our other most highly paid executive officer (the “named executive officers”) for services rendered
    in all capacities during the noted periods. No other executive officers received total annual salary and bonus compensation in
    excess of $100,000 during the fiscal years ended June 30, 2019 and 2018.

    Non-
    Equity Non-
    Incentive Qualified
    Plan Deferred All
    Name and Year Stock Option Compensation Compensation Otro
    Principal Ended Salario Prima Premios Premios Earnings Earnings Compensation Total
    Position June 30 ($) ($) ($) ($) ($) ($) ($) ($)
    Xianfu Han, 2019 270,000 – – – – – – 270,000
    Former Chairman and
    CEO (1)
    2018 360,000 – – – – – – 300,000
    Weili He, Former Vice 2019 270,000 – – – – – – 270,000
    Chairman, interim CFO and COO (2) 2018 360,000 – – – – – – 300,000
    Yang (Sean) Liu, Chairman and CEO (3)

    2019

    2018

    87,900 87,900
    Lili Jiang, Director and
    CFO (4)
    2019
    2018
    87,900 87,900

    (1) señor.
        Han became our Chief Executive Officer on April 29, 2008. He was entitled to an annual salary of $300,000 for service as our
        Chief Executive Officer from July 1, 2014 to June 30, 2017 and increased to an annual salary of $360,000 from July 1, 2017
        to June 30, 2020. Mr. Han resigned from his positions as CEO and Chairman on March 28, 2019.

    (2) señor.
        He became our Chief Operating Officer on April 29, 2008, and became our Interim Chief Financial Officer on September 21, 2012.
        He was entitled to an annual salary to $300,000 for service as our Interim Chief Financial Officer from July 1, 2014 to June
        30, 2017 and increased to $360,000 from July 1, 2017 to June 30, 2020. Mr. He resigned from his positions as Interim Chief
        Financial Officer, Chief Operating Officer, and Vice Chairman on March 28, 2019.
    (3) señor.
        Liu became our Chief Executive Officer and Chairman on March 28, 2019. He is entitled to an annual compensation of 120,000
        ordinary shares of the Company.
    (4) Ms.
        Jiang became our Chief Financial Officer and Director on March 28, 2019. She is entitled to an annual compensation of 120,000
        ordinary shares of the Company.

    los
    executive directors agreed not to receive any compensation for serving on the board.  The following table represents compensation
    earned by our non-executive directors in fiscal year ended June 30, 2019.

    Fees
    Earned or
    Paid in
    Efectivo
    Stock
    Premios
    Option
    Premios

    Non-equity incentive plan

    compensation

    Nonqualified deferred

    compensation earnings

    All other

    compensation

    Total
    Name ($) ($) ($) ($) ($) ($) ($)
    Tao Jin (1) PS 25,000 PS – – – – – PS 25,000
    Wei Pei (2) PS 25,000 – – – – – PS 25,000
    Jiehui Fan (3) PS 30,000 – – – – – PS 30,000
    Xiaoyuan Zhang (4)
    Yan Zhang (5)

    (1) En
        May 4, 2011, we entered into a director agreement with Tao Jin pursuant to which he is entitled to receive, annually, a cash
        compensation of $25,000 in cash. Mr. Tao Jin resigned on June 28, 2019.
    (2) En
        March 21, 2017, we entered into a director agreement with Mr. Wei Pei pursuant to which he is entitled to receive annual compensation
        of $25,000.
    (3) En
        June 12, 2018, we entered into a director agreement with Ms. Jiehui Fan pursuant to which she is entitled to receive annual
        compensation of $30,000. Ms. Fan resigned as a Director on July 19, 2019.
    (4) En
        July 19, 2019, we entered into a director agreement with Ms. Xiaoyuan Zhang pursuant to which she is entitled to receive annual
        compensation of $10,000.
    (5) En
        June 28, 2019, we entered into a director agreement with Ms. Yan Zhang pursuant to which she is entitled to receive annual
        compensation of 10,000 ordinary shares

    6.C.
    Board Practices

    Terms
    of Directors and Officers

    Our
    officers are elected by and serve at the discretion of the Board and the shareholders voting by ordinary resolution. Our directors
    are not subject to a set term of office and hold office until the next general meeting called for the election of directors and
    until their successor is duly elected or such time as they die, resign or are removed from office by a shareholders’ ordinary
    resolution or the unanimous written resolution of all shareholders A director will be removed from office automatically if, among
    other things, the director becomes bankrupt or makes any arrangement or composition with his creditors generally or is found to
    be or becomes of unsound mind.

    Audit
    Committee

    Xiaoyuan
    Zhang, Yan Zhang and Wei Pei are members of our Audit Committee, and Xiaoyuan Zhang serves as the chairwoman. All members of our
    Audit Committee satisfy the independence standards promulgated by the SEC and by Nasdaq as such standards apply specifically to
    members of audit committees.

    Our
    Audit Committee performs several functions, including:

    ● selecting our independent auditors and pre-approving all
    auditing and non-auditing services permitted to be performed by our independent auditors;

    ● reviewing with our independent auditors any audit problems
    or difficulties and management’s response;

    ● reviewing and approving all proposed related-party transactions,
    as defined in Item 404 of Regulation S- K under the Securities Act of 1933, as amended;

    ● discussing the annual audited financial statements with
    management and our independent auditors;

    ● reviewing major issues as to the adequacy of our internal
    controls and any special audit steps adopted in light of significant internal control deficiencies;

    ● annually reviewing and reassessing the adequacy of our
    audit committee charter;

    ● meeting separately and periodically with management and
    our independent auditors;

    ● reporting to the Board; y

    ● such other matters that are specifically delegated to our
    audit committee by the Board from time to time.

    Compensation
    Committee

    Xiaoyuan
    Zhang, Yan Zhang and Wei Pei are members of our Compensation Committee, and Yan Zhang serves the chairwoman. All members of our
    Compensation Committee are qualified as independent under the current definition promulgated by Nasdaq. The Compensation Committee
    is responsible for, among other things:

    ● reviewing and approving the total compensation package
    for our senior executives; y

    ● reviewing periodically, and approving, any long-term incentive
    compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

    Corporate
    Governance and Nominating Committee

    Xiaoyuan
    Zhang, Yan Zhang and Wei Pei are members of our Nominating and Corporate Governance Committee and Wei Pei is the chairman. All
    members of our Nominating and Corporate Governance Committee are qualified as independent under the current definition promulgated
    by Nasdaq. The Nominating and Corporate Governance Committee is responsible for, among other things:

    ● identify qualified individuals to become Board members,
    consistent with criteria approved by the Board, and to recommend that the Board select, the director nominees for the next annual
    meeting of shareholders;

    ● develop and recommend to the Board a set of corporate governance
    guidelines applicable to the Company; y

    ● to oversee the evaluation of the Board and management.

    6.D.
    Employees

    Ver
    the section entitled “Employees” in Item 4 above.

    6.E.
    Share Ownership

    Como
    of November 14, 2019, 7,574,626 of our ordinary shares were issued and outstanding. Holders of our ordinary shares are entitled
    to vote together as a single class on all matters submitted to shareholders for approval. No holder of ordinary shares has different
    voting rights from any other holders of ordinary shares. We are not aware of any arrangement that may, at a subsequent date, result
    in a change of control of our company.

    Beneficial
    ownership is determined in accordance with the rules and regulations of the SEC. The percentages of shares beneficially owned
    in the table below are based on 7,574,626 ordinary shares outstanding as of November 14, 2019.

    los
    following table sets forth information with respect to the beneficial ownership of our ordinary shares as of November 14, 2019
    by:

    ● each
    of our directors and executive officers; y

    ● each
    person known to us to beneficially own more than 5% of our outstanding ordinary shares.

    Ordinary Shares
    Beneficially Owned
    As of November 14,
    2019
    Name of Beneficial Owners(2) Number

    %(1)

    Directors and Executive Officers:
    Yang (Sean) Liu 120,000 1.58 %
    Lili Jiang 120,000 1.58 %
    Xiaoyuan Zhang – –
    Yan Zhang – –
    Wei Pei – –
    All directors and officers as a group (five individuals) 240,000 3.17 %
    5% shareholders:
    Hou Sing International Business Limited(3) 2,480,000 32.74 %

    (1) Applicable
        percentage of ownership is based on 7,574,626 ordinary shares outstanding together with securities exercisable or convertible
        into ordinary shares within sixty (60) days as of the date hereof for each shareholder.

    (2) Unless otherwise noted, the business address of each of the following entities or individuals is 9 North West Fourth Ring Road, Yingu Mansion Ste 1708, Haidian District, Beijing 100190.
    (3) The business address of Hou Sing International Business Limited is Times Square, 1 Matheson St, Unit 6, Room 901, Causeway Bay, Hong Kong.

    ITEM 7. MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

    7.A.
    Major Shareholders

    Ver
    Item 6.E., “Share Ownership,” for a description of our major shareholders.

    7.B.
    Related Party Transactions

    Except
    as discussed below, since the beginning of the 2012, there have not been any transactions, nor is there any currently proposed
    transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds $120,000, and in which any
    related person had or will have a direct or indirect material interest (other than compensation described under “Executive
    Compensation”).

    Prepayment – related party

    Mr. Xianfu Han, and Mr. Weili He, the Company’s
    shareholders and former officers, are holding positions as president and director of Ningbo Lianlv Investment Ltd., respectively.
    This company owns 99% of the shares of Beijing Lianlv Technical Group Ltd. (“Beijing Lianlv”), the Company’s
    supplier. As of June 30, 2019 and 2018, the Company prepaid $456,399 and $3,027,409 to Beijing Lianlv, before any allowance, for
    inventory purchases, respectively.

    Due to Beijing Lianlv being named as a
    joint defendant in one of the civil lawsuits of the Company, the Company provided a provision of 5% of an allowance for doubtful
    accounts for Beijing Lianlv’s prepayment that are aged from six months to one year and 10% for the balance beyond one year.
    As of June 30, 2019 and 2018, the Company made $0 and $0.3 million allowance for prepayment – related party, respectively.

    Other receivable – related party

    This balance represents litigation against
    Xin Ao who entered into a capital lease agreement on behalf of Beijing Lianlv, an entity whose shareholders are Mr. Han and Mr.
    He. The balance was indemnified by Mr. Han and Mr. He in November 2019. As of June 30, 2019 and 2018, other receivable –
    related party from Beijing Lianlv was $165,075 and $1,397,042, respectively.

    Other payables – related parties

    Mr. Xianfu Han, Mr. Weili He have advanced
    funds to BVI-ACM for working capital purposes. The advances are non-interest bearing, unsecured, and are payable in cash on demand.
    They and their spouses have also guaranteed certain short-term loans payable and notes payable of the Company (see Note 7).

    Other payables – related parties
    consisted of the following:

    June 30,
    2019
    June 30,
    2018
    Xianfu Han PS 361,336 PS 91,336
    Weili He 396,401 104,428
    PS 757,737 PS 195,763

    Loans payable – employees

    Na Wang and Wei Zhang, employees of the
    Company, have settled certain liabilities on behalf of the Company with its vendors and advanced funds to the Company for working
    capital purposes. The settlement amount and advances are non-interest bearing, unsecured, and are payable in cash on demand.

    June 30,
    2019
    June 30,
    2018
    Na Wang PS 2,341,932 PS –
    Wei Zhang 2,251,942 –
    PS 4,593,874 PS –

    7.C.
    Interests of Experts and Counsel

    No
    applicable.

    ITEM
        8)
    FINANCIAL
        INFORMATION

    Consolidated
    Statements and Other Financial Information

    los
    financial statements required by this item may be found at the end of this Annual Report on 20-F, beginning on page F-1.

    Legal
    Proceedings

    Ver
    “Item 4. Information on the Company — B. Business Overview — Legal Proceedings.”

    Dividends

    We
    have never declared or paid any dividend on our ordinary shares and we do not anticipate paying any dividends on our ordinary
    shares in the future. We currently intend to retain all future earnings to finance our operations and to expand our business.

    No
    Significant Changes

    Except
    as disclosed elsewhere in this annual report, no other significant changes to our financial condition have occurred since
    the date of the annual financial statements contained herein.

    ITEM
        9)
    THE
        OFFER AND LISTING

    9.A.
    Offer and Listing Details

    Our
    ordinary shares are listed for trading on the NASDAQ Capital Market under the symbol “HHT.” The shares began trading
    on February 25, 2013 on the NASDAQ Capital Market.

    9.B.
    Plan of Distribution

    No
    Applicable.

    9.C.
    Markets

    Our
    ordinary shares are currently traded on the NASDAQ Capital Market.

    9.D.
    Selling Shareholders

    No
    Applicable.

    9.E.
    Dilution

    No
    Applicable.

    9.F.
    Expenses of the Issuer

    No
    Applicable.

    ITEM
        10)
    ADDITIONAL
        INFORMATION

    10.A.
    Share Capital

    No
    Applicable.

    10.B.
    Memorandum and Articles of Association

    We
    are a Cayman Islands exempted company with limited liability and our affairs are governed by our Memorandum and Articles, the
    Companies Law, the common law of the Cayman Islands, our corporate governance documents and rules and regulations of the stock
    exchange on which are shares are traded.

    Como
    of the date hereof, the authorized share capital of the Company is $75,000 divided into 75,000,000 Ordinary Shares with a nominal
    or par value of USD 0.001 each. As of the date hereof, 7,574,626 Ordinary Shares are issued and outstanding. All of our issued
    and outstanding Ordinary Shares are fully paid.

    Ordinary
    Shares

    los
    following are summaries of material provisions of our Memorandum and Articles, corporate governance policies and the Companies
    Law insofar as they relate to the material terms of our Ordinary Shares.

    Objetos
    of Our Company

    Under
    our Memorandum and Articles, the objects of our Company are unrestricted and we have the full power and authority to carry out
    any object not prohibited by the law of the Cayman Islands.

    Compartir
    Capital

    los
    holders of our Ordinary Shares are entitled to one vote for each such share held and shall be entitled to notice of any shareholders’
    meeting, and, subject to the terms of Memorandum and Articles, to vote thereat.

    Dividends

    los
    holders of our Ordinary Shares are entitled to such dividends as may be declared by our Board of Directors subject to the Companies
    Law and to our Memorandum and Articles.

    Voting
    Rights

    En
    respect of all matters subject to a shareholders’ vote, each Ordinary Share is entitled to one vote. Voting at any shareholders’
    meeting is by show of hands unless a poll is demanded by the chairman or persons holding certain amounts of shares as set forth
    in the Memorandum and Articles. Actions that may be taken at a general meeting also may be taken by a unanimous resolution of
    the shareholders in writing.

    No
    business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds
    to business; two members present in person or by proxy shall be a quorum provided always that if the Company has one member of
    record the quorum shall be that one member present in person or by proxy. An ordinary resolution to be passed at a general meeting
    requires the affirmative vote of a simple majority of the votes cast.

    A
    special resolution of members is required to change the name of the Company, approve a merger, wind up the Company, amend the
    Memorandum and Articles and reduce the share capital.

    Transfer
    of Ordinary Shares

    Subject
    to the restrictions set out below, any of our shareholders may transfer all or any of his, its or her Ordinary Shares by an instrument
    of transfer in the usual or common form or any other form approved by our Board of Directors or in a form prescribed by the stock
    exchange on which our shares are then listed.

    Our
    Board of Directors may, in its sole discretion, decline to register any transfer of Ordinary Shares whether or not it is fully
    paid up to the total consideration paid for such shares. Our directors may also decline to register any transfer of Ordinary Shares
    if (a) the instrument of transfer is not accompanied by the certificate covering the shares to which it relates or any other evidence
    as our Board of Directors may reasonably require to prove the title of the transferor to, or his/her right to transfer the shares;
    or (b) the instrument of transfer is in respect of more than one class of shares.

    If
    our directors refuse to register a transfer, they shall, within two months after the date on which the instrument of transfer
    was lodged, send to the transferee notice of such refusal.

    los
    registration of transfers may be suspended and the register closed at such times and for such periods as our Board of Directors
    may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register
    closed for more than 30 days in any year.

    Winding-Up/Liquidation

    En
    a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of shares), a liquidator may
    be appointed to determine how to distribute the assets among the holders of the Ordinary Shares. If our assets available for distribution
    are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders
    proportionately; a similar basis will be employed if the assets are more than sufficient to repay the whole of the capital at
    the commencement of the winding up.

    Calls
    on Ordinary Shares and Forfeiture of Ordinary Shares

    Our
    Board of Directors may from time to time make calls upon shareholders for any amounts unpaid on their Ordinary Shares in a notice
    served to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called
    upon and remain unpaid on the specified time are subject to forfeiture.

    Redemption
    of Shares

    We
    may issue shares on terms that are subject to redemption, at our option or at the option of the holders, on such terms and in
    such manner as may be determined by our Board of Directors.

    Inspection
    of Books and Records

    Directors
    shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations
    the accounts and books of the Company or any of them shall be open to the inspection of members not being Directors and no member
    (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by
    Companies Law or authorized by the Directors or by the Company in a general meeting. However, the Directors shall from time to
    time cause to be prepared and to be laid before the Company in a general meeting, profit and loss accounts, balance sheets, group
    accounts (if any) and such other reports and accounts as may be required by Companies Law. (See “Where You Can Find More
    Information”)

    Issuance
    of Additional Shares

    Our
    Memorandum and Articles authorize our Board of Directors to issue additional Ordinary Shares from time to time as our Board of
    Directors shall determine, to the extent there are available authorized but unissued shares.

    Our
    Memorandum and Articles also authorizes our Board of Directors to establish from time to time one or more series of preferred
    shares and to determine, subject to compliance with the variation of rights of shares provision in the Memorandum and Articles,
    with respect to any series of preferred shares, the terms and rights of that series, including:

    ● el
        designation of the series;
    ● el
        number of shares of the series;
    ● el
        dividend rights, dividend rates, conversion rights, voting rights; y
    ● el
        rights and terms of redemption and liquidation preferences.

    Our
    Board of Directors may, issue preferred shares without action by our shareholders to the extent there are authorized but unissued
    shares available.

    Anti-Takeover
    Provisions

    Some
    provisions of our Memorandum and Articles may discourage, delay or prevent a change of control of our Company or management that
    shareholders may consider favorable, including provisions that:

    ● authorize
        our Board of Directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges
        and restrictions of such preferred shares without any further vote or action by our shareholders (subject to variation of
        rights of shares provisions in our Memorandum and Articles); y
    ● limit
        the ability of shareholders to requisition and convene general meetings of shareholders. Our Memorandum and Articles allow
        our shareholders holding shares representing in aggregate not less than twenty percent of our paid up share capital (as to
        the total consideration paid for such shares) in issue to requisition an extraordinary general meeting of our shareholders,
        in which case our directors are obliged to call such meeting and to put the resolutions so requisitioned to a vote at such
        meeting.

    Sin embargo,
    under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our Memorandum and Articles
    for a proper purpose and for what they believe in good faith to be in the best interests of our Company.

    General
    Meetings of Shareholders and Shareholder Proposals

    Our
    shareholders’ general meetings may be held in such place within or outside the Cayman Islands as our Board of Directors
    considers appropriate.

    Como
    a Cayman Islands exempted company, we are not obliged by the Companies Law to call shareholders’ annual general meetings.
    The directors may, whenever they think fit, convene an extraordinary general meeting.

    Shareholders’
    general meetings and any other general meetings of our shareholders may be convened by a majority of our Board of Directors. Our
    Board of Directors shall give not less than seven days’ written notice of a shareholders’ meeting to those persons
    whose names appear as members in our register of members on the date the notice is given (or on any other date determined by our
    directors to be the record date for such meeting) and who are entitled to vote at the meeting.

    Cayman
    Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders
    with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles
    of association. Our Memorandum and Articles allow our shareholders holding shares representing in aggregate not less than ten
    percent of our paid up share capital (as to the total consideration paid for such shares) in issue to requisition an extraordinary
    general meeting of our shareholders, in which case our directors are obliged to call such meeting and to put the resolutions so
    requisitioned to a vote at such meeting; otherwise, our Memorandum and Articles do not provide our shareholders with any right
    to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.

    Exempted
    Company

    We
    are an exempted company with limited liability under the Companies Law. The Companies Law distinguishes between ordinary resident
    companies and exempted companies. A Cayman Islands exempted company:

    ● es
        a company that conducts its business mainly outside of the Cayman Islands;
    ● es
        exempted from certain requirements of the Companies Law, including the filing an annual return of its shareholders with the
        Registrar of Companies or the Immigration Board;
    ● hace
        not have to make its register of members open for inspection;
    ● hace
        not have to hold an annual general meeting;
    ● may
        issue negotiable or bearer shares or shares with no par value (subject to the provisions of the Companies Law);
    ● may
        obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the
        first instance); y
    ● may
        register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands.

    “Limited
    liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares
    of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an
    illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

    Register
    of Members

    Under
    Cayman Islands law, we must keep a register of members and there should be entered therein:

    ● el
        names and addresses of the members, a statement of the shares held by each member, and of the amount paid or agreed to be
        considered as paid, on the shares of each member;
    ● el
        date on which the name of any person was entered on the register as a member; y
    ● el
        date on which any person ceased to be a member.

    Under
    Cayman Islands law, the register of members of our Company is prima facie evidence of the matters set out therein (i.e. the register
    of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register
    of members is deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register
    of members. Once our register of members has been updated, the shareholders recorded in the register of members are deemed to
    have legal title to the shares set against their name.

    If
    the name of any person is incorrectly entered in, or omitted from, our register of members, or if there is any default or unnecessary
    delay in entering on the register the fact of any person having ceased to be a member of our Company, the person or member aggrieved
    (or any member of our Company or our Company itself) may apply to the Cayman Islands Grand Court for an order that the register
    be rectified, and the Court may either refuse such application or it may, if satisfied of the justice of the case, make an order
    for the rectification of the register.

    Indemnification
    of Directors and Executive Officers and Limitation of Liability

    Cayman
    Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification
    of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to
    public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Memorandum
    and Articles require us to indemnify our officers and directors for actions, proceedings, claims, losses, damages, costs, liabilities
    and expenses (“Indemnified Losses”) incurred in their capacities as such unless such Indemnified Losses arise from
    dishonesty of such directors or officers. This standard of conduct is generally the same as permitted under the Delaware General
    Corporation Law for a Delaware corporation.

    Insofar
    as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling
    us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public
    policy as expressed in the Securities Act and is therefore unenforceable.

    Material
    Differences between U.S. Corporate Law and Cayman Islands Corporate Law

    los
    Companies Law is modeled after that of English law but does not follow many recent English law statutory enactments. In addition,
    the Companies Law differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary
    of the significant differences between the provisions of the Companies Law applicable to us and the laws applicable to companies
    incorporated in the State of Delaware.

    Mergers
    and Similar Arrangements
    . A merger of two or more constituent companies under Cayman Islands law requires a plan
    of merger or consolidation to be approved by the directors of each constituent company and authorization by (a) a special resolution
    of the shareholders and (b) such other authorization, if any, as may be specified in such constituent company’s articles
    of association.

    A
    merger between a Cayman Islands parent company and its Cayman Islands subsidiary or subsidiaries does not require authorization
    by a resolution of shareholders of that Cayman Islands subsidiary if a copy of the plan of merger is given to every member of
    that Cayman Islands subsidiary to be merged unless that member agrees otherwise. For this purpose a subsidiary is a company of
    which at least ninety percent (90%) of the issued shares entitled to vote are owned by the parent company.

    los
    consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement
    is waived by a court in the Cayman Islands.

    Save
    in certain circumstances, a dissentient shareholder of a Cayman constituent company is entitled to payment of the fair value of
    his shares upon dissenting to a merger or consolidation. The exercise of appraisal rights will preclude the exercise of any other
    rights save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

    En
    addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement
    is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who
    must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are
    present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings
    and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has
    the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve
    the arrangement if it determines that:

    ● el
        statutory provisions as to the required majority vote have been met;

    ● el
        shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without
        coercion of the minority to promote interests adverse to those of the class;

    ● el
        arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his
        interest; y

    ● el
        arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law.

    Cuando
    a takeover offer is made and accepted by holders of 90.0% of the shares within four months, the offeror may, within a two-month
    period commencing on the expiration of such four month period, require the holders of the remaining shares to transfer such shares
    on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in
    the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

    If
    an arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights,
    which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive
    payment in cash for the judicially determined value of the shares.

    Shareholders’
    Suits.
     In principle, we will normally be the proper plaintiff and as a general rule a derivative action may not be
    brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority
    in the Cayman Islands, there are exceptions to the foregoing principle, including when:

    ● una
        company acts or proposes to act illegally or ultra vires;

    ● el
        act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote
        that has not been obtained; y

    ● aquellos
        who control the company are perpetrating a “fraud on the minority.”

    Indemnification
    of Directors and Executive Officers and Limitation of Liability
    . Cayman Islands law does not limit the extent to
    which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except
    to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide
    indemnification against civil fraud or the consequences of committing a crime. Our current memorandum and articles of association
    permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such
    unless such losses or damages arise from dishonesty or fraud of such directors or officers. This standard of conduct is generally
    the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we have entered into
    indemnification agreements with our directors and executive officers that provide such persons with additional indemnification
    beyond that provided in our current memorandum and articles of association.

    Insofar
    as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling
    us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public
    policy as expressed in the Securities Act and is therefore unenforceable.

    Directors’
    Fiduciary Duties
    . Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty
    to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care
    requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances.
    Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available
    regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be
    in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits
    self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any
    interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general,
    actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action
    taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of
    the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural
    fairness of the transaction, and that the transaction was of fair value to the corporation.

    Como
    a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company
    and therefore it is considered that he or she owes the following duties to the company — a duty to act bona fide in the
    best interests of the company, a duty not to make a profit based on his or her position as director (unless the company permits
    him or her to do so) and a duty not to put himself or herself in a position where the interests of the company conflict with his
    or her personal interest or his or her duty to a third party. A director of a Cayman Islands company owes to the company a duty
    to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties
    a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, English
    and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities
    are likely to be followed in the Cayman Islands.

    Shareholder
    Action by Written Consent
    . Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders
    to act by written consent by amendment to its certificate of incorporation. Cayman Islands law and our current articles of association
    provide that shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each
    shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

    Shareholder
    Proposals
    . Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the
    annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting
    may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may
    be precluded from calling special meetings.

    Cayman
    Islands law does not provide shareholders any right to put proposals before a meeting or requisition a general meeting. Sin embargo,
    these rights may be provided in articles of association. Our current articles of association allow our shareholders holding not
    less than one-third of all voting power of our share capital in issue to requisition a shareholder’s meeting. Other than
    this right to requisition a shareholders’ meeting, our current articles of association do not provide our shareholders other
    right to put proposal before a meeting. As a Cayman Islands exempted company, we are not obliged by law to call shareholders’
    annual general meetings.

    Cumulative
    Voting.
     Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted
    unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates
    the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the
    votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect
    to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but
    our current articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less
    protections or rights on this issue than shareholders of a Delaware corporation.

    Removal
    of Directors.
     Under the Delaware General Corporation Law, a director of a corporation with a classified board may
    be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of
    incorporation provides otherwise. Under our current articles of association, directors may be removed with or without cause, by
    an ordinary resolution of our shareholders.

    Transactions
    with Interested Shareholders.
     The Delaware General Corporation Law contains a business combination statute applicable
    to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment
    to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested
    shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder
    generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting share within
    the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target
    in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on
    which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the
    transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware
    corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.

    Cayman
    Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware
    business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant
    shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and not
    with the effect of constituting a fraud on the minority shareholders.

    Dissolution;
    Winding up.
     Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve,
    dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution
    is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares.
    Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in
    connection with dissolutions initiated by the board. Under Cayman Islands law, a company may be wound up by either an order of
    the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they
    fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances
    including where it is, in the opinion of the court, just and equitable to do so. Under the Companies Law and our current articles
    of association, our company may be dissolved, liquidated or wound up by a special resolution of our shareholders.

    Variation
    of Rights of Shares.
     Under the Delaware General Corporation Law, a corporation may vary the rights of a class of
    shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides
    otherwise. Under Cayman Islands law and our current articles of association, if our share capital is divided into more than one
    class of shares, we may vary the rights attached to any class with the written consent of the holders of three-fourths of the
    issued shares of that class or with the sanction of a resolution passed by not less than three-fourths of such holders of the
    shares of that class as may be present at a general meeting of the holders of the shares of that class.

    Amendment
    of Governing Documents.
     Under the Delaware General Corporation Law, a corporation’s governing documents may
    be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation
    provides otherwise. As permitted by Cayman Islands law, our current memorandum and articles of association may only be amended
    with a special resolution of our shareholders.

    Rights
    of Non-resident or Foreign Shareholders.
     There are no limitations imposed by our post-offering amended and restated
    memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights
    on our shares. In addition, there are no provisions in our current memorandum and articles of association governing the ownership
    threshold above which shareholder ownership must be disclosed.

    10.C.
    Material Contracts

    We
    have not entered into any material contracts other than in the ordinary course of business and other than those described in this
    annual report.

    10.D.
    Exchange Controls

    Cayman
    Islands

    There
    are currently no exchange control regulations in the Cayman Islands applicable to us or our shareholders.

    los
    PRC

    China
    regulates foreign currency exchanges primarily through the following rules and regulations:

    ● Foreign
        Currency Administration Rules of 1996, as amended; y

    ● Administrative
        Rules of the Settlement, Sale and Payment of Foreign Exchange of 1996.

    Renminbi
    is not a freely convertible currency at present. Under the current PRC regulations, conversion of Renminbi is permitted in China
    for routine current-account foreign exchange transactions, including trade and service related foreign exchange transactions,
    payment of dividends and service of foreign debts. Conversion of Renminbi for most capital-account items, such as direct investments,
    investments in PRC securities markets and repatriation of investments, however, is still subject to the approval of SAFE.

    Pursuant
    to the above-mentioned administrative rules, foreign-invested enterprises may buy, sell and/or remit foreign currencies for current
    account transactions at banks in China with authority to conduct foreign exchange business by complying with certain procedural
    requirements, such as presentment of valid commercial documents. For capital-account transactions involving foreign direct investment,
    foreign debts and outbound investment in securities and derivatives, approval from SAFE is a pre-condition. Capital investments
    by foreign-invested enterprises outside China are subject to limitations and requirements in China, such as prior approvals from
    the PRC Ministry of Commerce or SAFE.

    10.E.
    Taxation

    los
    following summary of the material Cayman Islands, PRC and U.S. tax consequences of an investment in our ordinary shares is based
    upon laws and relevant interpretations thereof in effect as of the date hereof, all of which are subject to change, possibly with
    retroactive effect. This summary is not intended to be, nor should it be construed as, legal or tax advice and is not exhaustive
    of all possible tax considerations. This summary also does not deal with all possible tax consequences relating to an investment
    in our ordinary shares, such as the tax consequences under state, local, non-U.S., non-PRC, and non-Cayman Islands tax laws. Investors
    should consult their own tax advisors with respect to the tax consequences of the acquisition, ownership and disposition of our
    ordinary shares.

    Cayman
    Islands Taxation

    los
    Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and
    there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes levied by the Government of the
    Cayman Islands that are likely to be material to holders of ordinary shares or ordinary shares. The Cayman Islands is not party
    to any double tax treaties. There are no exchange control regulations or currency restrictions in the Cayman Islands.

    People’s
    Republic of China Taxation

    Under
    the EIT Law, an enterprise established outside the PRC with a “de facto management body” within the PRC is considered
    a PRC resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax
    rate on its worldwide income as well as tax reporting obligations. Under the Implementation Rules, a “de facto management
    body” is defined as a body that has material and overall management and control over the manufacturing and business operations,
    personnel and human resources, finances and properties of an enterprise. In addition, SAT Circular 82 issued in April 2009 specifies
    that certain offshore-incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC
    resident enterprises if all of the following conditions are met: (a) senior management personnel and core management departments
    in charge of the daily operations of the enterprises have their presence mainly in the PRC; (b) their financial and human resources
    decisions are subject to determination or approval by persons or bodies in the PRC; (c) major assets, accounting books and
    company seals of the enterprises, and minutes and files of their board’s and shareholders’ meetings are located or
    kept in the PRC; and (d) half or more of the enterprises’ directors or senior management personnel with voting rights habitually
    reside in the PRC. Further to SAT Circular 82, the SAT issued SAT Bulletin 45, which took effect in September 2011, to provide
    more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details
    of determination on PRC resident enterprise status and administration on post-determination matters. If the PRC tax authorities
    determine that Huitao Technology Co., Ltd. is a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable
    PRC tax consequences could follow. For example, Xin Ao may be subject to enterprise income tax at a rate of 25% with respect to
    its worldwide taxable income. Also, a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise shareholders
    and with respect to gains derived by our non-PRC enterprise shareholders from transferring our shares or ordinary shares and potentially
    a 20% of withholding tax would be imposed on dividends we pay to our non-PRC individual shareholders and with respect to gains
    derived by our non-PRC individual shareholders from transferring our shares or ordinary shares.

    Eso
    is unclear whether, if we are considered a PRC resident enterprise, holders of our shares or ordinary shares would be able to
    claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. See “Risk
    Factors — Risk Factors Relating to Doing Business in China — Under the PRC Enterprise Income Tax Law, we may be classified
    as a PRC resident enterprise for PRC enterprise income tax purposes. Such classification would likely result in unfavorable tax
    consequences to us and our non-PRC Shareholders and have a material adverse effect on our results of operations and the value
    of your investment”.

    los
    SAT issued SAT Circular 59 together with the Ministry of Finance in April 2009 and SAT Circular 698 in December 2009. Both SAT
    Circular 59 and SAT Circular 698 became effective retroactively as of January 1, 2008. By promulgating and implementing these
    two circulars, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in
    a PRC resident enterprise by a non-PRC resident enterprise. Under SAT Circular 698, where a non-PRC resident enterprise transfers
    the equity interests of a PRC resident enterprise indirectly by disposition of the equity interests of an overseas holding company,
    and the overseas holding company is located in a tax jurisdiction that: (1) has an effective tax rate of less than 12.5% or (2)
    does not impose tax on foreign income of its residents, the non-PRC resident enterprise, being the transferor, must report to
    the relevant tax authority of the PRC resident enterprise this Indirect Transfer. Using a “substance over form” principle,
    the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose
    and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect
    Transfer may be subject to PRC tax at a rate of up to 10%. Although it appears that SAT Circular 698 was not intended to apply
    to share transfers of publicly traded companies, there is uncertainty as to the application of SAT Circular 698 and we and our
    non-PRC resident investors may be at risk of being required to file a return and being taxed under SAT Circular 698 and we may
    be required to expend valuable resources to comply with SAT Circular 698 or to establish that we should not be taxed under SAT
    Circular 698. See “Risk Factors — Risk Factors Relating to Doing Business in China — We face uncertainty regarding
    the PRC tax reporting obligations and consequences for certain indirect transfers of our operating company’s equity interests.
    Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions
    we may pursue in the future.”

    Pursuant
    to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation
    and Tax Evasion on Income, or the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-PRC tax resident
    enterprise directly holds at least 25% of a PRC enterprise, the withholding tax rate in respect of the payment of dividends by
    such PRC enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of
    the PRC local tax authority. Pursuant to the Notice of the State Administration of Taxation on the Issues concerning the Application
    of the Dividend Clauses of Tax Agreements, or Circular 81, a resident enterprise of the counter-party to such Tax Arrangement
    should meet the following conditions, among others, in order to enjoy the reduced withholding tax under the Tax Arrangement: (i)
    it must directly own the required percentage of equity interests and voting rights in such PRC resident enterprise; and (ii) it
    should directly own such percentage in the PRC resident enterprise anytime in the 12 months prior to receiving the dividends.
    Furthermore, the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under Tax Treaties (For Trial Implementation),
    or the Administrative Measures, which became effective in October 2009, requires that the non-resident enterprises must obtain
    the approval from the relevant tax authority in order to enjoy the reduced withholding tax rate under the tax treaties. There
    are also other conditions for enjoying such reduced withholding tax rate according to other relevant tax rules and regulations.
    According to Circular 81, if the relevant tax authorities consider the transactions or arrangements we have are for the primary
    purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.

    United
    States Federal Income Taxation

    los
    following is a discussion of United States federal income tax considerations relating to the acquisition, ownership, and disposition
    of our ordinary shares by a U.S. Holder, as defined below, that acquires our ordinary shares and holds our ordinary shares as
    “capital assets” (generally, property held for investment) under the United States Internal Revenue Code of 1986,
    as amended (the “Code”). This discussion is based upon existing United States federal income tax law, which is subject
    to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue
    Service (the “IRS”) with respect to any United States federal income tax consequences described below, and there can
    be no assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of United
    States federal income taxation that may be important to particular investors in light of their individual circumstances, including
    investors subject to special tax rules (such as, for example, certain financial institutions, insurance companies, regulated investment
    companies, real estate investment trusts, broker-dealers, traders in securities that elect mark-to-market treatment, partnerships
    and their partners, tax-exempt organizations (including private foundations)), investors who are not U.S. Holders, investors that
    own (directly, indirectly, or constructively) 10% or more of our voting stock, investors that hold their ordinary shares as part
    of a straddle, hedge, conversion, constructive sale or other integrated transaction), or investors that have a functional currency
    other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. En
    addition, this discussion does not address any tax laws other than the United States federal income tax laws, including any state,
    local, alternative minimum tax or non-United States tax considerations, or the Medicare tax. Each potential investor is urged
    to consult its tax advisor regarding the United States federal, state, local and non-United States income and other tax considerations
    of an investment in our ordinary shares.

    General

    por
    purposes of this discussion, a “U.S. Holder” is a beneficial owner of our ordinary shares that is, for United States
    federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other
    entity treated as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the
    United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income
    for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject
    to the primary supervision of a United States court and which has one or more United States persons who have the authority to
    control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a United States person under
    the Code.

    If
    a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of
    our ordinary shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities
    of the partnership. Partnerships and partners of a partnership holding our ordinary shares are urged to consult their tax advisors
    regarding an investment in our ordinary shares.

    los
    discussion set forth below is addressed only to U.S. Holders that purchase ordinary shares. Prospective purchasers are urged to
    consult their own tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as
    well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our ordinary
    shares.

    Taxation
    of Dividends and Other Distributions on our Ordinary Shares

    Subject
    to the passive foreign investment company rules discussed below, the gross amount of distributions made by us to you with respect
    to the ordinary shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income
    as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated
    earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends
    will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other
    U.S. corporations.

    Con
    respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate
    applicable to qualified dividend income, provided that (1) the ordinary shares are readily tradable on an established securities
    market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States
    that includes an exchange of information program, (2) we are not a passive foreign investment company (as discussed below) for
    either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements
    are met. Because there is no income tax treaty between the United States and the Cayman Islands, clause (1) above can be satisfied
    only if the ordinary shares are readily tradable on an established securities market in the United States. Under U.S. Internal
    Revenue Service authority, ordinary shares are considered for purpose of clause (1) above to be readily tradable on an established
    securities market in the United States if they are listed on Nasdaq. You are urged to consult your tax advisors regarding the
    availability of the lower rate for dividends paid with respect to our ordinary shares, including the effects of any change in
    law after the date of this report.

    A
    the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S.
    federal income tax principles), it will be treated first as a tax-free return of your tax basis in your ordinary shares, and to
    the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to
    calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution
    will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital
    gain under the rules described above.

    Taxation
    of Dispositions of Ordinary Shares

    Subject
    to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange
    or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and
    your tax basis (in U.S. dollars) in the ordinary shares. The gain or loss will be capital gain or loss. If you are a non-corporate
    U.S. Holder, including an individual U.S. Holder, who has held the ordinary shares for more than one year, you may be eligible
    for reduced tax rates on any such capital gains. The deductibility of capital losses is subject to limitations.

    Passive
    Foreign Investment Company

    A
    non-U.S. corporation is considered a PFIC for any taxable year if either:

    ● at
        least 75% of its gross income for such taxable year is passive income; o

    ● at
        least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is
        attributable to assets that produce or are held for the production of passive income (the “asset test”).

    Passive
    income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct
    of a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share
    of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly,
    at least 25% (by value) of the stock. In determining the value and composition of our assets for purposes of the PFIC asset test,
    (1) the cash we hold will generally be considered to be held for the production of passive income and (2) the value of our assets
    must be determined based on the market value of our ordinary shares from time to time, which could cause the value of our non-passive
    assets to be less than 50% of the value of all of our assets (including the cash raised in any offering) on any particular quarterly
    testing date for purposes of the asset test.

    We
    must make a separate determination each year as to whether we are a PFIC. Depending on the amount of cash we hold, together with
    any other assets held for the production of passive income, it is possible that, for our 2018 taxable year or for any subsequent
    taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination
    following the end of any particular tax year. Although the law in this regard is unclear, we treat our consolidated affiliated
    entities, as being owned by us for United States federal income tax purposes, not only because we exercise effective control over
    the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result,
    we consolidate their operating results in our consolidated financial statements. In particular, because the value of our assets
    for purposes of the asset test will generally be determined based on the market price of our ordinary shares and because cash
    is generally considered to be an asset held for the production of passive income, our PFIC status will depend in large part on
    the market price of our ordinary shares and the amount of cash we hold. Accordingly, fluctuations in the market price of the ordinary
    shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects.
    We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination
    of the value of our assets will depend upon material facts (including the market price of our ordinary shares from time to time
    that may not be within our control. If we are a PFIC for any year during which you hold ordinary shares, we will continue to be
    treated as a PFIC for all succeeding years during which you hold ordinary shares. However, if we cease to be a PFIC and you did
    not previously make a timely “mark-to-market” election as described below, you may avoid some of the adverse effects
    of the PFIC regime by making a “purging election” (as described below) with respect to the ordinary shares.

    If
    we are a PFIC for your taxable year(s) during which you hold ordinary shares, you will be subject to special tax rules with respect
    to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including
    a pledge) of the ordinary shares, unless you make a “mark-to-market” election as discussed below. Distributions you
    receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the
    three preceding taxable years or your holding period for the ordinary shares will be treated as an excess distribution. Under
    these special tax rules:

    ● el
        excess distribution or gain will be allocated ratably over your holding period for the ordinary shares;

    ● el
        amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first
        taxable year in which we were a PFIC, will be treated as ordinary income, and

    ● el
        amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and
        the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each
        such year.

    los
    tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset
    by any net operating losses for such years, and gains (but not losses) realized on the sale of the ordinary shares cannot be treated
    as capital, even if you hold the ordinary shares as capital assets.

    A
    U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to
    elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or
    are deemed to hold) ordinary shares and for which we are determined to be a PFIC, you will include in your income each year an
    amount equal to the excess, if any, of the fair market value of the ordinary shares as of the close of such taxable year over
    your adjusted basis in such ordinary shares, which excess will be treated as ordinary income and not capital gain. You are allowed
    an ordinary loss for the excess, if any, of the adjusted basis of the ordinary shares over their fair market value as of the close
    of the taxable year. However, such ordinary loss is allowable only to the extent of any net mark-to-market gains on the ordinary
    shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well
    as gain on the actual sale or other disposition of the ordinary shares, are treated as ordinary income. Ordinary loss treatment
    also applies to any loss realized on the actual sale or disposition of the ordinary shares, to the extent that the amount of such
    loss does not exceed the net mark-to-market gains previously included for such ordinary shares. Your basis in the ordinary shares
    will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply
    to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital
    gains rate for qualified dividend income discussed above under “— Taxation of Dividends and Other Distributions on
    our ordinary shares” generally would not apply.

    los
    mark-to-market election is available only for “marketable stock”, which is stock that is traded in other than de minimis
    quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other
    market (as defined in applicable U.S. Treasury regulations), including Nasdaq. If the ordinary shares are regularly traded on
    Nasdaq and if you are a holder of ordinary shares, the mark-to-market election would be available to you were we to be or become
    a PFIC.

    Alternatively,
    a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election with respect to such PFIC to elect
    out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC
    will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings
    and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S.
    Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We
    do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election.
    If you hold ordinary shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service
    Form 8621 in each such year and provide certain annual information regarding such ordinary shares, including regarding distributions
    received on the ordinary shares and any gain realized on the disposition of the ordinary shares.

    If
    you do not make a timely “mark-to-market” election (as described above), and if we were a PFIC at any time during
    the period you hold our ordinary shares, then such ordinary shares will continue to be treated as stock of a PFIC with respect
    to you even if we cease to be a PFIC in a future year, unless you make a “purging election” for the year we cease
    to be a PFIC. A “purging election” creates a deemed sale of such ordinary shares at their fair market value on the
    last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the
    special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging
    election, you will have a new basis (equal to the fair market value of the ordinary shares on the last day of the last year in
    which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your ordinary
    shares for tax purposes.

    Tú
    are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our ordinary shares and
    the elections discussed above.

    Information
    Reporting and Backup Withholding

    Dividend
    payments with respect to our ordinary shares and proceeds from the sale, exchange or redemption of our ordinary shares may be
    subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding at a current rate of
    24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes
    any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding.
    U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue
    Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting
    and backup withholding rules.

    Apoyo
    withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income
    tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate
    claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold
    taxes for individual shareholders. However, transactions effected through certain brokers or other intermediaries may be subject
    to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such
    taxes.

    Under
    the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our
    ordinary shares, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain
    financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial
    Assets, with their tax return for each year in which they hold ordinary shares.

    10.F.
    Dividends and Paying Agents

    No
    Applicable.

    10.G.
    Statement by Experts

    No
    Applicable.

    10.H.
    Documents on Display

    los
    Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and will file reports,
    registration statements and other information with the SEC. The Company’s reports, registration statements and other information
    can be inspected on the SEC’s website at www.sec.gov and such information can also be inspected and copies ordered at the
    public reference facilities maintained by the SEC at the following location: 100 F Street NE, Washington, D.C. 20549. You may
    also visit us on the World Wide Web at http://www.China-ACM.com. However, information contained on our website does not constitute
    a part of this annual report.

    10.I.
    Subsidiary Information

    No
    Applicable.

    ITEM
        11.
    QUANTITATIVE
        AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    No
    Applicable.

    ITEM
        12.
    DESCRIPTION
        OF SECURITIES OTHER THAN EQUITY SECURITIES

    No
    Applicable.

    PART
    II

    ITEM
        13.
    DEFAULTS,
        DIVIDEND ARREARAGES AND DELINQUENCIES

    No
    Applicable.

    ITEM
        14.
    MATERIAL
        MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

    En
    September 26, 2018, we filed a definitive proxy statement to change our place of incorporation from Nevada to the Cayman Islands.
    The re-domicile involved the Company’s merger with a newly formed subsidiary, as a result of which we became a wholly owned
    subsidiary of a Cayman Islands holding company (“CADC Cayman”). Each outstanding share of common stock of the Company
    was converted into the right to receive one ordinary share of CADC Cayman, which was issued by CADC Cayman in connection with
    the merger pursuant to a registered offering.

    ITEM
        15.
    CONTROLS
        AND PROCEDURES

    (a) Disclosure
        Controls and Procedures

    Our
    management, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of
    the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the
    end of the period covered by this report, as required by Rule 13a-15(b) under the Exchange Act.

    Based
    on that evaluation, we concluded that as of June 30, 2019, due to the material weaknesses in our internal control over financial
    reporting discussed below, our disclosure controls and procedures were not effective.

    (b) Management’s
        Report on Internal Control Over Financial Reporting

    Our
    management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
    defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable
    assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
    accordance with international financial reporting standards (“IFRSs”). Because of its inherent limitations, internal
    control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
    to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the
    degree of compliance with policies or procedures may deteriorate. Under the supervision and with the participation of our management,
    including our chief executive officer and chief financial officer, we conducted an assessment of the effectiveness of our internal
    control over financial reporting as of June 30, 2019. The assessment was based on criteria established in the framework Internal
    Control—Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based
    on this assessment, management determined that, as of June 30, 2019, we did not maintain effective internal control over financial
    reporting due to the existence of the following significant deficiencies and material weaknesses:

    ● los
                                             personnel primarily responsible for the preparation of our financial statements do not
                                             have requisite levels of knowledge, experience and training in the application of U.S.
                                             GAAP commensurate with our financial reporting requirements;

    ● Ineffective
                                             supervision of the Company’s internal and disclosure controls over financial reporting;

    Management
    is in the process of re-assessing the design of certain control activities and developing its remediation plan for the above identified
    weaknesses. The Company’s actions are subject to ongoing senior management review, as well as Audit Committee oversight.
    The Company has implemented or will implement following remedial measures within its resources as soon as practicable:

    ● Establishing
                                             an internal audit function or engage an external consulting firm, to assist with assessment
                                             of Sarbanes-Oxley compliance requirements and improvement of overall internal controls;

    (c) Attestation
        Report of Independent Registered Public Accounting Firm

    No
    applicable.

    (d) Changes
        in Internal Control over Financial Reporting

    los
    management is committed to improving the internal controls over financial reporting and will undertake consistent improvements
    or enhancements on an ongoing basis. Except as described above, there were no changes in our internal controls over financial
    reporting during our fiscal year ended June 30, 2018 that have materially affected, or are reasonably likely to materially affect,
    our internal control over financial reporting.

    ITEM
        16A.
    AUDIT
        COMMITTEE FINANCIAL EXPERT

    Our
    audit committee consists of Xiaoyuan Zhang, Yan Zhang and Wei Pei. Our board of directors has determined Xiaoyuan Zhang, Yan Zhang
    and Wei Pei are “independent directors” within the meaning of NASDAQ Stock Market Rule 5605(a)(2) and meet the criteria
    for independence set forth in Rule 10A−3(b) of the Exchange Act. Xiaoyuan Zhang meets the criteria of an audit committee
    financial expert as set forth under the applicable rules of the SEC.

    los
    Board has adopted a Code of Conduct and Ethics that applies to the Company’s directors, officers and employees. A copy of
    this policy is available via our website at www.China-ACM.com. Printed copies of our Code of Ethics may be obtained, without charge,
    by contacting the Corporate Secretary, Huitao Technology Co., Ltd., 9 North West Fourth Ring Road Yingu Mansion Suite 1708, Haidian
    District Beijing, People’s Republic of China 100190

    ITEM
        16C.
    PRINCIPAL
        ACCOUNTANT FEES AND SERVICES

    los
    following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
    by our principal external auditors, for the periods indicated.

    Year Ended
    June 30,
    2018
    Year  Ended
    June 30,
    2019
    Audit fees(1) PS 185,000 PS 387,529
    Audit related fees(2) – –
    Tax fees(3) – –
    All other fees(4) 19,000 6,000
    TOTAL PS 204,000 PS 393,529

    (1) “Audit
        fees” means the aggregate fees billed for each of the fiscal years for professional services rendered by our principal
        accountant for the audit of our annual financial statements or services that are normally provided by the accountant in connection
        with statutory and regulatory filings or engagements for those fiscal years.
    (2) “Audit
        related fees” means the aggregate fees billed for each of the fiscal years for assurance and related services by our
        principal accountant that are reasonably related to the performance of the audit or review of our financial statements and
        are not reported under paragraph (1).

    (3) “Tax
        Fees” represents the aggregate fees billed in each of the fiscal years listed for the professional tax services rendered
        by our principal auditors.

    (4)

    “All
    Other Fees” represents the aggregate fees billed in each of the fiscal years listed for services rendered by our principal
    auditors other than services reported under “Audit fees,” “Audit-related fees” and “Tax fees.”

    los
    policy of our audit committee and our board of directors is to pre-approve all audit and non-audit services provided by our principal
    auditors, including audit services, audit-related services, and other services as described above, other than those for de minimis
    services which are approved by the audit committee or our board of directors prior to the completion of the services.

    ITEM
        16D.
    EXEMPTIONS
        FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

    No
    Applicable.

    ITEM
        16E.
    PURCHASES
        OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

    No
    Applicable.

    ITEM
        16F.
    CHANGE
        IN REGISTRANT’S CERTIFYING ACCOUNTANT

    (a)
    Resignation of Previous Independent Registered Public Accounting Firm

    Por
    letter dated (and received) October 11, 2018, our independent registered public accounting firm, Friedman LLP (“Friedman”)
    notified the Audit Committee of the Board of Directors of China Advanced Construction Materials Group, Inc. (the “Company”,
    “we”, or “us”) of its resignation as the Company’s independent registered public accounting firm.
    On October 11, 2018, the Board of Directors accepted such resignation. The auditor’s report of Friedman on the Company’s
    consolidated financial statements as of and for the year ended June 30, 2016 did not contain an adverse opinion or a disclaimer
    of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles.

    En
    October 6, 2018, the Audit Committee of the Board of Directors, after consultation with the Company’s then independent registered
    public accounting firm, Friedman LLP (“Friedman”) concluded, that the Company’s audited financial statements
    at and for the year ended June 30, 2017 contained in the Company’s Annual Report on Form 10-K originally filed with the
    SEC on as well the unaudited financial statements at and for the periods ended March 31, 2018, December 31, 2017 and September
    30, 2017 contained in the Company’s Quarterly Reports on Form 10-Q originally filed on November 15, 2017, February 13, 2018
    and May 15, 2018, respectively, should no longer be relied upon.

    During
    the two most recent fiscal years and through the subsequent interim period preceding Friedman’s resignation, there were
    no (i) “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K) between the Company and Friedman
    on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements,
    if not resolved to the satisfaction of Friedman would have caused Friedman to make reference to the subject matter thereof in
    its reports for such fiscal years and interim periods, or (ii) “reportable events” as that term is described in Item
    304(a)(1)(v) of Regulation S-K.

    We
    furnished a copy of this disclosure to Friedman and have requested that Friedman furnish us with a letter addressed to the Securities
    and Exchange Commission (the “SEC”) stating whether such firm agrees with the above statements or, if not, stating
    the respects in which it does not agree. We have received the requested letter from Friedman, and a copy of their letter is filed
    with the Securities and Exchange Commission on October 16, 2018 in our Current Report on Form 8-K as Exhibit 16.1.

    (b)
    Engagement of New Independent Registered Public Accounting Firm

    En
    October 13, 2018, the Board of Directors approved the engagement of Wei, Wei & Co., LLP (“WWC”) as the Company’s
    independent registered public accounting firm to audit the Company’s consolidated financial statements as of and for the
    fiscal year ended June 30, 2018 and 2017.

    During
    the two most recent fiscal years and through the subsequent interim period preceding WWC’s engagement, the Company has not
    consulted with WWC regarding (i) the application of accounting principles to a specified transaction, either completed or proposed;
    or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report
    was provided to the Company nor oral advice was provided that WWC concluded was an important factor considered by the Company
    in reaching a decision as to the accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject
    of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K)
    or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

    ITEM
        16G.
    CORPORATE
        GOVERNANCE

    Other than as described in this section,
    our corporate governance practices do not differ from those followed by domestic companies listed on the NASDAQ Capital Market.
    NASDAQ Listing Rule 5635 generally provides that shareholder approval is required of U.S. domestic companies listed on the NASDAQ
    Capital Market prior to issuance (or potential issuance) of securities (i) equaling 20% or more of the company’s common stock
    or voting power for less than the greater of market or book value (ii) resulting in a change of control of the company; and (iii)
    which is being issued pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation
    arrangement made or materially amended. Notwithstanding this general requirement, NASDAQ Listing Rule 5615(a)(3)(A) permits foreign
    private issuers to follow their home country practice rather than these shareholder approval requirements. The Cayman Islands do
    not require shareholder approval prior to any of the foregoing types of issuances. The Company, therefore, is not required to obtain
    such shareholder approval prior to entering into a transaction with the potential to issue securities as described above. The Board
    of Directors of the Company has elected to follow the Company’s home country rules as to such issuances and will not be required
    to seek shareholder approval prior to entering into such a transaction.

    ITEM
        16H.
    MINE
        SAFETY DISCLOSURE

    No
    applicable.

    PART
    III

    ITEM
        17.
    FINANCIAL
        STATEMENTS

    We have elected to provide financial statements
    pursuant to Item 18.

    ITEM
        18.
    FINANCIAL
        STATEMENTS

    los
    consolidated financial statements and related notes required by this item are contained on pages F-1 through F-32.

    * * Filed
        as an exhibit hereto.

    (1)

    (2)

    Incorporated by reference to the Company’s
            Current Report on Form 6-K filed with the SEC on July 17, 2019.

    Incorporated by reference to the Company’s
            Current Report on Form 6-K filed with the SEC on June 5, 2019.

    (3) Incorporated by reference to the Company’s Current Report on Form 6-K filed with the SEC on March 28, 2019.
    (4) Incorporated by reference to the Company’s Current Report on Form 6-K filed with the SEC on July 24, 2019.

    SIGNATURES

    los
    registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
    the undersigned to sign this annual report on its behalf.

    HUITAO
        TECHNOLOGY CO., LTD.
    /s/
        Yang (Sean) Liu
    Nombre:
        Yang (Sean) Liu
    Title:
        Chief Executive Officer
    Date:
        15 de noviembre de 2019

    HUITAO TECHNOLOGY CO., LTD.

    TABLE OF CONTENTS

    REPORT OF INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM

    To the Board of Directors and
    Shareholders of Huitao Technology Co., Ltd. and subsidiaries

    Opinion on the Consolidated Financial
    Statements

    We have audited the accompanying consolidated
    balance sheets of Huitao Technology Co., Ltd. and subsidiaries (formerly
    China Advanced Construction Materials Group, Inc.) (the “Company”) as of June 30, 2019 and 2018, and the related consolidated
    statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the
    three year period ended June 30, 2019 , and the related notes (collectively referred to as the consolidated financial statements).
    In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
    as of June 30, 2019 and 2018, and the results of their operations and their cash flows for the years then ended, in conformity
    with accounting principles generally accepted in the United States of America.

    Basis for Opinion

    These consolidated financial statements
    are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated
    financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
    Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal
    securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

    We conducted our audits in accordance with
    the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
    the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required
    to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are
    required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
    on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

    Our audits included performing procedures
    to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
    procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
    disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant
    estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe
    that our audits provide a reasonable basis for our opinion.

    Substantial Doubt about the Company’s
    Ability to Continue as a Going Concern

    The accompanying consolidated financial
    statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated
    financial statements, Company’s recurring losses from operations, the estimated claims charges and the possible additional
    exposure for pending litigation actions against Company which is presently unknown. In addition, the Company is in default under
    its bank loan agreement for which the bank has filed with the PRC courts to demand repayment. These factors indicate the Company
    may not be able to continue as a going concern. The Company continues to be reliant on borrowings from its shareholders and the
    continued forbearance of the bank and the Company’s creditors. Management’s evaluation of the events and conditions
    and management’s plans, regarding those matters are also described in Note 2 to the consolidated financial statements. los
    consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

    /s/ Wei, Wei & Co., LLP

    We have served as the Company’s auditor
    since 2018.

    New York, New York
    15 de noviembre de 2019

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY KNOWN AS CHINA ADVANCED CONSTRUCTION
    MATERIALS GROUP, INC.)

    CONSOLIDATED BALANCE SHEETS

    June 30, June 30,
    2019 2018
    ASSETS
    CURRENT ASSETS:
    Cash and cash equivalents PS 347,486 PS 1,098,691
    Accounts and notes receivable, net 37,010,458 43,322,463
    Inventories 511,160 427,193
    Other receivables, net 1,423,563 71,242
    Other receivable – related party 165,075 1,397,042
    Prepayments and advances, net 12,566,372 1,569,162
    Prepayment – related party 456,399 2,725,423
    Prepaid expenses 25,000 40,458
    Total de activos corrientes 52,505,513 50,651,674
    PROPERTY PLANT AND EQUIPMENT, net 1,659,520 2,748,409
    Los activos totales PS 54,165,033 PS 53,400,083
    LIABILITIES AND SHAREHOLDERS’ EQUITY
    CURRENT LIABILITIES:
    Short term bank loans – in default PS 24,686,899 PS 26,062,665
    Cuentas por pagar 12,841,076 10,340,072
    Customer deposits 635,762 903,034
    Other payables 372,913 369,780
    Other payables – related parties 757,737 195,763
    Loans payable – employees 4,593,874 –
    Obligaciones acumuladas 3,083,929 1,217,584
    Taxes payable 80,860 178,190
    Accrued contingent liabilities 6,591,185 4,430,787
    Total pasivos corrientes 53,644,235 43,697,875
    COMMITMENTS AND CONTINGENCIES (Note 14) – –
    SHAREHOLDERS’ EQUITY:
    Preferred shares, $0.001 par value, 1,000,000 shares authorized, no shares issued or outstanding – –
    Ordinary shares, $0.001 par value, 74,000,000 shares authorized, 7,174,626 and 5,488,649 shares issued and outstanding as of June 30, 2019 and 2018, respectively 7,175 5,489
    Additional paid-in-capital 54,237,082 48,360,368
    Deferred stock compensation (3,161,200 ) (2,825,000 )
    Deficit (64,031,446 ) (49,642,916 )
    Statutory reserves 6,248,092 6,248,092
    Accumulated other comprehensive income 7,221,095 7,556,175
    Total shareholders’ equity 520,798 9,702,208
    Total liabilities and shareholders’ equity PS 54,165,033 PS 53,400,083

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

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    CONSOLIDATED
    STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

    For the years ended June 30,
    2019 2018 2017
    REVENUE PS 43,651,923 PS 45,734,647 PS 45,048,413
    COST OF REVENUE 39,093,782 39,022,360 43,953,477
    GROSS PROFIT 4,558,141 6,712,287 1,094,936
    PROVISION FOR DOUBTFUL ACCOUNTS (2,559,785 ) (2,184,221 ) (3,352,063 )
    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (5,996,609 ) (5,301,168 ) (5,380,702 )
    RESEARCH AND DEVELOPMENT EXPENSES (223,668 ) (1,182,133 ) (846,438 )
    STOCK COMPENSATION EXPENSE (4,592,200 ) (1,388,501 ) (289,000 )
    LOSS FROM OPERATIONS (8,814,121 ) (3,343,736 ) (8,773,267 )

    OTHER INCOME (EXPENSE)

    Other (expense) income, net (4,113 ) 111,922 407,452
    Interest income 2,282 6,051 30,464
    Gastos por intereses (2,038,291 ) (1,360,608 ) (830,978 )
    Finance expense (13,201 ) (5,137 ) (604,498 )
    Estimated claims charges (3,521,086 ) (2,808,457 ) (1,267,293 )
    TOTAL OTHER EXPENSE, NET (5,574,409 ) (4,056,229 ) (2,264,853 )
    LOSS BEFORE PROVISION FOR INCOME TAXES (14,388,530 ) (7,399,965 ) (11,038,120 )
    PROVISION FOR INCOME TAXES – – –
    NET LOSS PS (14,388,530 ) PS (7,399,965 ) PS (11,038,120 )
    COMPREHENSIVE INCOME  (LOSS)
    Net loss PS (14,388,530 ) PS (7,399,965 ) PS (11,038,120 )
    Other comprehensive (loss) income – foreign currency translation (loss) gain (335,080 ) 347,097 (499,361 )
    COMPREHENSIVE LOSS PS (14,723,610 ) PS (7,052,868 ) PS (11,537,481 )
    LOSS PER ORDINARY SHARE
    Weighted average number of shares:
    Basic 5,841,614 2,942,945 2,266,826
    Diluted 5,841,614 2,942,945 2,266,826
    Loss per share:
    Basic PS (2.46 ) PS (2.51 ) PS (4.87 )
    Diluted PS (2.46 ) PS (2.51 ) PS (4.87 )

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

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS’ EQUITY

    Ordinary
        share
    Additional Deferred Accumulated
        otro
    Number Par Paid-in Compartir Statutory comprehensive
    of
        shares
    amount capital Compensation Deficit reserves income Total
    BALANCE,
        June 30, 2016
    2,180,799 PS 2,181 PS 38,373,584 PS – PS (31,204,831 ) PS 6,248,357 PS 7,708,439 PS 21,127,730
    Ordinary
        shares issued for services without performance commitment
    106,859 107 (107 ) – – – – –
    Ordinary
        shares issued for compensation
    100,000 100 288,900 – – – – 289,000
    Net
        loss
    – – – – (11,038,120 ) – – (11,038,120 )
    Dissolution
        of subsidiaries
    – – – – – (265 ) – (265 )
    Foreign
        currency translation loss
    – – – – – – (499,361 ) (499,361 )
    BALANCE,
        June 30, 2017
    2,387,658 2,388 38,662,377 – (42,242,951 ) 6,248,092 7,209,078 9,878,984
    Cancellation
        of ordinary shares issued for services
    (56,859 ) (57 ) 57 – – – – –
    Ordinary
        shares issued for services
    – – 144,500 – – – – 144,500
    Ordinary
        shares issued for compensation
    475,195 475 1,243,526 – – – – 1,244,001
    Ordinary
        shares issued for debt repayment
    1,882,655 1,883 3,857,560 – – – – 3,859,443
    Sale
        of ordinary shares
    300,000 300 599,700 – – – – 600,000
    Ordinary
        shares issued for services
    500,000 500 2,824,500 (2,825,000 ) – – – –
    Payments
        made by major shareholders for litigation
    – – 1,028,148 – – – – 1,028,148
    Net
        loss
    – – – – (7,399,965 ) – – (7,399,965 )
    Foreign
        currency translation gain
    – – – – – – 347,097 347,097
    BALANCE,
        June 30, 2018
    5,488,649 5,489 48,360,368 (2,825,000 ) (49,642,916 ) 6,248,092 7,556,175 9,702,208
    Sale of ordinary shares 295,977 296 949,704 – – – – 950,000
    Ordinary
        shares issued for compensation
    550,000 550 1,319,450 – – – – 1,320,000
    Ordinary
        shares issued for services
    600,000 600 1,757,400 (1,758,000 ) – – – –
    Unvested
        restricted ordinary shares issued to officers
    240,000 240 1,850,160 (1,850,400 ) – – – –
    Amortization
        of deferred share compensation
    – – – 3,272,200 – – – 3,272,200
    Net
        loss
    – – – – (14,388,530 ) – – (14,388,530 )
    Foreign
        currency translation loss
    – – – – – – (335,080 ) (335,080 )
    BALANCE,
        June 30, 2019
    7,174,626 PS 7,175 PS 54,237,082 PS (3,161,200 ) PS (64,031,446 ) PS 6,248,092 PS 7,221,095 PS 520,798

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

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    CONSOLIDATED
    STATEMENTS OF CASH FLOWS

    For the years ended June 30,
    2019 2018 2017
    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss PS (14,388,530 ) PS (7,399,965 ) PS (11,038,120 )
    Adjustments to reconcile net loss to net cash provided by operating activities:
    Depreciation 1,128,832 1,239,383 1,178,427
    Loss (gain) on disposal of equipment 3,866 (2,306 ) –
    Stock compensation expense 4,592,200 1,388,501 289,000
    Provision for doubtful accounts 2,559,782 2,184,221 3,352,063
    Changes in operating assets and liabilities
    Accounts and notes receivable (6,032,880 ) (4,647,399 ) (13,544,355 )
    Inventories (99,755 ) 218,252 374,676
    Other receivables (1,425,544 ) 1,458,316 7,534,134
    Prepayments and advances (6,298,504 ) 15,996,599 18,161,510
    Prepayment – related party 2,477,931 4,209,149 (5,856,413 )
    Prepaid expenses 15,458 (40,458 ) –
    Cuentas por pagar 10,418,874 (12,834,912 ) 11,783
    Customer deposits (236,542 ) 971,235 (3,556,647 )
    Other payables 15,273 (3,924,701 ) 3,493,637
    Other payables – related parties 540,000 720,000 623,924
    Accrued liabilities and contingent liabilities 5,744,928 2,840,480 667,463
    Taxes payable (91,531 ) 73,623 9,575
    Net cash (used in) provided by operating activities (1,076,142 ) 2,450,018 1,700,657
    CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property, plant and equipment (135,705 ) (138,151 ) (210,962 )
    Net cash used in investing activities (135,705 ) (138,151 ) (210,962 )
    CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from short term loans, banks and bank guarantees 4,980,762 34,724,896 20,706,132
    Repayments of short term loans, banks and bank guarantees (5,431,960 ) (26,639,329 ) (19,237,612 )
    Proceeds from notes payable – – 30,398,364
    Repayments of notes payable – (14,603,210 ) (34,069,664 )
    Borrowings from shareholders 23,865 121,820 146,611
    Proceeds from sale of ordinary shares 950,000 600,000 –
    Net cash provided by (used in) financing activities 522,667 (5,795,823 ) (2,056,169 )
    EFFECTS OF EXCHANGE RATE CHANGE IN CASH, CASH EQUIVALENTS AND RESTICTED CASH (62,025 ) 149,203 (104,673 )
    NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTICTED CASH (751,205 ) (3,334,753 ) (671,147 )
    CASH, CASH EQUIVALENTS AND RESTICTED CASH, beginning of year 1,098,691 4,433,444 5,104,591
    CASH, CASH EQUIVALENTS AND RESTICTED CASH, end of year PS 347,486 PS 1,098,691 PS 4,433,444
    RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
    Cash and cash equivalents at beginning of year PS 1,098,691 PS 224,679 PS 1,006,970
    Restricted cash at beginning of year – 4,208,765 4,097,621
    Cash, cash equivalents and restricted cash at beginning of year PS 1,098,691 PS 4,433,444 PS 5,104,591
    Cash and cash equivalents at end of year PS 347,486 PS 1,098,691 PS 224,679
    Restricted cash at end of year – – 4,208,765
    Cash, cash equivalents and restricted cash at end of year PS 347,486 PS 1,098,691 PS 4,433,444
    SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest expense PS 2,038,291 PS 1,360,608 PS 825,772
    Cash paid for income tax PS – PS – PS –
    NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES:
    Property, plant and equipment additions accrued PS – PS 99,125 PS –
    Customer deposits reclassified to other payables – shareholders upon execution of tri-party agreements PS – PS 692,387 PS –
    Accrued liabilities reclassified to other payables –  shareholders upon execution of tri-party agreements PS – PS 259,105 PS –
    Accrued liabilities reclassified to loans payable –  employees upon execution of tri-party agreements PS 308,089 PS – –
    Forgiveness of payable to shareholder as a capital contribution PS – PS 691,731 PS –
    Litigation liability paid by related party PS – PS 354,921 PS 660,834
    Accrued related party’s litigation liabilities PS – PS 1,422,186 PS –
    Ordinary share issued to repay other payables – related parties and service providers PS 4,928,400 PS 3,859,443 PS –
    Other receivables – related party offset with contingent liabilities upon litigation payments made by related party PS 1,189,285 PS – PS –
    OTHER NON-CASH TRANSACTIONS:
    Accounts receivable offset with accounts payable upon execution of debt obligation transfer agreements PS 3,221,736 PS 6,945,445 PS 1,535,126
    Accounts receivable assigned to prepayments and advances upon execution of accounts receivable assignment agreements PS 5,008,417 PS – PS –
    Reclassification from accounts payable to loans payable upon payment made by employees of the Company on its behalf PS 4,311,234 PS – PS –

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

    HUITAO TECHNOLOGY CO.,
    LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    NOTES
    TO THE CONSOLIDATED FINANCIAL STATEMENTS

    Note
    1 – Organization and description of business

    China
    Advanced Construction Materials Group, Inc. (“CADC Delaware”) was incorporated in the State of Delaware on February
    15, 2007. On August 1, 2013, CADC Delaware consummated a reincorporation merger with its newly formed wholly-owned subsidiary,
    China Advanced Construction Materials Group, Inc. (“CADC Nevada”), a Nevada corporation, with CADC Delaware merging
    into CADC Nevada and CADC Nevada being the surviving company, for the purpose of changing CADC Delaware’s state of incorporation
    from Delaware to Nevada. On December 27, 2018, CADC Nevada was merged with and into China Advanced Construction Materials Group,
    Inc. (“CADC Cayman”), a Cayman Islands corporation, whereupon the separate existence of CADC Nevada ceased and CADC
    Cayman was continued as the surviving entity. On July 16, 2019, CADC Cayman received the stamped Certificate of Incorporation
    on Change of Name from the Cayman Islands Registrar of Companies and the Amended and Restated Memorandum and Articles of Association
    from the Cayman Islands General Registry, dated July 12, 2019 pursuant to which CADC Cayman’s name has been changed from
    “China Advanced Construction Materials Group, Inc.” to “Huitao Technology Co., Ltd.” (the Company or “HHT”).

    los
    Company, through its 100% owned subsidiaries and its variable interest entities (“VIEs”), is engaged in producing
    general ready-mix concrete, customized mechanical refining concrete, and other concrete-related products that are only sold in
    the People’s Republic of China (the “PRC”).

    los
    Company has a wholly-owned subsidiary in the British Virgin Islands, Xin Ao Construction Materials, Inc. (“BVI-ACM”),
    which is a holding company with no operations. BVI-ACM has a wholly-owned foreign subsidiary, Beijing Ao Hang Construction Material
    Technology Co., Ltd. (“China-ACMH”), and China-ACMH has contractual agreements with Beijing XinAo Concrete Group (“Xin
    Ao”) and therefore Xin Ao is considered to be a VIE of China-ACMH. On August 20, 2018, CACM Group NY, Inc. (“CACM”)
    was incorporated in the State of New York and is 100% owned by the Company. The establishment of CACM is to expand the Company’s
    construction material business in New York. As of the date of the report, CACM has not commenced any operations.

    Note 2 – Going Concern

    In assessing the Company’s liquidity,
    the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity
    needs are to meet its working capital requirements, operating expenses and capital expenditure obligations.

    The Company engages in the production of
    advanced construction materials for large-scale infrastructure, commercial and residential developments. The Company’s business
    is capital intensive and the Company is highly leveraged. Debt financing in the form of short term bank loans, loans from related
    parties and bank acceptance notes have been utilized to finance the working capital requirements and the capital expenditures of
    the Company. The Company’s working deficit was approximately $1.1 million as of June 30, 2019. As of June 30, 2019, the Company
    had cash on-hand of approximately $0.3 million, with remaining current assets mainly composed of accounts receivable and prepayments
    and advances.

    Although the Company believes that it can
    realize its current assets in the normal course of business, the Company’s ability to repay its current obligations will
    depend on the future realization of its current assets. Management has considered its historical experience, the economic environment,
    trends in the construction industry in the PRC, the expected collectability of its accounts receivable and other receivables and
    the realization of the prepayments on inventory, and provided an allowance for doubtful accounts as of June 30, 2019. The Company
    expects to realize the balance of its current assets, net of the allowance for doubtful accounts within the normal operating cycle
    of twelve months.

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    NOTES
    TO THE CONSOLIDATED FINANCIAL STATEMENTS

    However, the Company is involved in various lawsuits, claims and disputes related to its operations and
    the personal guarantees of its officers to affiliated entities owned by them. The Company is actively defending these actions and
    attempting to mitigate the Company’s exposure to any liability in excess of the current provision of approximately $6.6 million,
    (see Note 14 in the accompanying notes to the consolidated financial statements). The ultimate outcome of these pending actions
    cannot presently be determined, but currently management is of the opinion that any potential additional liability would not have
    a material impact on the Company’s consolidated financial position. Nevertheless, due to the uncertainties with litigation,
    the PRC legal system, claims and disputes, it is at least reasonably possible that management’s view of the outcome could
    change in the near term.

    Furthermore, as of June 30, 2019, the Company’s VIE, Xin Ao, was subject to several civil lawsuits
    with potential judgments in the amount of approximately $26.7 million (see Note 14 in the accompanying notes to the consolidated
    financial statements) and the likelihood of the outcome of these lawsuits cannot presently be determined. These lawsuits involve
    the Company principally due to the personal guarantees by Mr. Xianfu Han, and Mr. Weili He, the Company’s shareholders and
    former officers. Because Mr. Han and Mr. He were the controlling shareholders of Xin Ao, the plaintiffs included Xin Ao in their
    joint complaints. Xin Ao was not involved in most of the lawsuits but named as a joint defendant in the lawsuits. As a result,
    Xin Ao might have exposure to any judgements in the future under PRC laws. Mr. Han and Mr. He have agreed to indemnify the
    Company for any amounts Xin Ao may have to pay.  Should the outcome of these lawsuits require Xin Ao to pay because the other
    co-defendants of the lawsuits and Mr. Han and Mr. He were unable to liquidate their personal assets or their ownership interest
    in their privately held companies timely to pay for the judgements, the Company’s working deficit as of June 30, 2019 could
    be increased from approximately $1.1 million to a net working deficit of approximately $27.8 million.

    In addition, the Company is in payment and technical default under its bank loan agreement for which the
    bank has filed with the PRC courts which has issued a demand notice in May 2019 for the immediate repayment of the outstanding
    loans. No repayments have been made and the balance at June 30, 2019 is approximately $ 24.7 million.

    The management of the Company has considered
    whether there is a going concern issue due to the Company’s recurring losses from operations, the default of the Company’s
    bank loans, the estimated claims charges and the possible additional exposure for pending actions against Company which is presently
    unknown. Management has determined there is substantial doubt about our ability to continue as a going concern. If the Company
    is unable to generate significant revenue, secure the continued forbearance of its bank and/or additional financing or resolve
    any pending estimated claim charges, the Company may be required to cease or curtail its operations. The Company’s financial
    statements do not include adjustments that might result from the outcome of this uncertainty.

    Management is trying to alleviate the going
    concern risk through equity financing, obtaining additional financial support and credit guarantee commitments and debt restructuring
    for most litigation liabilities.

    Note 3 – Summary of significant
    accounting policies

    Basis
    of presentation

    los
    accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted
    in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange
    Commission (“SEC”). These financial statements include the accounts of all the directly and indirectly owned subsidiaries
    and VIEs listed below. All intercompany transactions and balances have been eliminated in consolidation.

    Principles
    of consolidation

    los
    consolidated financial statements reflect the activities of the following subsidiaries and VIEs. All material intercompany transactions
    have been eliminated.

    Subsidiaries and VIEs Place incorporated Propiedad
    percentage
    CACM New York, USA 100 %
    BVI-ACM British Virgin Island 100 %
    China-ACMH Beijing, China 100 %
    Xin Ao Beijing, China VIE

    VIEs
    are generally entities that lack sufficient equity to finance their activities without additional financial support from other
    parties or whose equity holders lack adequate decision-making ability.  The VIE with which the Company is involved
    must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required
    to consolidate the VIEs for financial reporting purposes.

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    NOTES
    TO THE CONSOLIDATED FINANCIAL STATEMENTS

    Management
    makes ongoing assessments of whether China ACMH is the primary beneficiary of Xin Ao. Based upon a series of contractual arrangements,
    the Company determined that Xin Ao is a VIE subject to consolidation and that China ACMH is the primary beneficiary. Accordingly,
    the accounts of Xin Ao are consolidated with those of China ACMH.

    los
    carrying amount of the VIE’s assets and liabilities are as follows:

    June 30, June 30,
    2019 2018
    Current assets PS 52,147,926 PS 50,219,221
    Property, plants and equipment 1,659,520 2,748,409
    Los activos totales 53,807,446 52,967,630
    Liabilities (52,161,353 ) (43,372,069 )
    Intercompany payables* (7,328,943 ) (7,705,339 )
    Responsabilidad total (59,490,296 ) (51,077,408 )
    Net (deficit) assets PS (5,682,850 ) PS 1,890,222

    * * Payables to China-ACMH
        and BVI-ACM have been eliminated in consolidation.

    Use
    of estimates and assumptions

    los
    preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
    the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
    statements, and the reported amounts of revenues and expenses during the reporting periods. The significant estimates and assumptions
    made in the preparation of the Company’s consolidated financial statements include the allowance for doubtful accounts,
    deferred income taxes, prepayments and advances, stock-based compensation, contingent liabilities, and fair value and useful lives
    of property, plant and equipment. Actual results could be materially different from those estimates.

    Foreign
    currency translation

    los
    reporting currency of the Company is the U.S. dollar. The functional currency of BVI-ACM is the U.S. dollar. China-ACMH and Xin
    Ao use their local currency, the Chinese Renminbi (“RMB”) as their functional currency. In accordance with U.S. GAAP
    guidance on Foreign Currency Translation, the Company’s results of operations and cash flows are translated at the average
    exchange rates during the period, assets and liabilities are translated at the exchange rates at the balance sheet dates, and
    equity is translated at historical exchange rates. As a result, amounts related to assets and liabilities reported on the consolidated
    statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

    Asset
    and liability accounts at June 30, 2019 and 2018 were translated at RMB 6.87 and RMB 6.62 to USD$1.00, respectively. Equity accounts
    are translated at their historical rate. The average translation rates applied to the consolidated statements of operations and
    comprehensive loss and cash flows for the years ended June 30, 2019, 2018 and 2017 were RMB 6.83, RMB 6.51 and RMB 6.81 to USD$1.00,
    respectively.

    Translation
    gains (losses) that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional
    currency are included in the results of operations. There were no foreign currency transaction gains or losses for the years ended
    June 30, 2019, 2018 and 2017. The effects of foreign currency translation adjustments are included in shareholders’ equity
    as a component of accumulated other comprehensive income (loss).

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    NOTES
    TO THE CONSOLIDATED FINANCIAL STATEMENTS

    Revenue
    recognition

    En
    July 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers
    (ASC 606) using the modified retrospective method for contracts that were not completed as of July 1, 2018. The core principle
    underlying revenue recognition is that the Company recognizes its revenue to represent the transfer of goods and services to customers
    in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This requires the Company
    to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over
    time, based on when control of goods and services transfers to a customer.  The Company’s revenue streams are primarily
    recognized at a point in time, principally upon delivery.

    los
    ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that
    the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine
    the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will
    not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue
    when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared
    to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the
    Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards
    and using the five-step model under the new guidance and confirmed that there were no material differences in the pattern of revenue
    recognition.

    Sales
    of concrete products

    los
    Company continues to derive its revenues from sales contracts with its customers with revenues being recognized upon delivery
    of products. Persuasive evidence of an arrangement is demonstrated via sales contract and invoice; and the sales price to the
    customer is fixed upon acceptance of the sales contract and there is no separate sales rebate, discount, or other incentive. Such
    revenues are recognized at a point in time after all performance obligations are satisfied and based on when control of goods
    transfer to a customer, which is generally similar to when its delivery has occurred prior to July 1, 2018.

    Financial
    instruments

    US
    GAAP, regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level
    valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs
    when measuring fair value.

    los
    three levels of inputs are defined as follows:

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

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

    Level 3 inputs
    to the valuation methodology are unobservable.

    Financial
    instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or
    cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected
    realization and their current market rates of interest.

    Efectivo
    and cash equivalents

    los
    Company considers all highly liquid investments with the original maturity of three months or less at the date of purchase to
    be cash equivalents.

    Restricted Cash

    Restricted cash represents cash held by
    banks as guarantee deposit collateralizing notes payable.

    In November 2016, the FASB issued ASU No.
    2016-18, Statement of Cash Flows (230): Restricted Cash. The amendments in this update require that a statement of cash flows explain
    the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted
    cash equivalents. For public business entities, the amendments in this update are effective for fiscal years beginning after December
    15, 2017, and interim periods within those annual periods. Earlier adoption is permitted. The amendments in this update should
    be applied using a retrospective transition method to each period presented. On July 1, 2018, the Company adopted this guidance
    on a retrospective basis. The Company’s years ended June 30, 2018 and 2017 statements of cash flows have been retroactively
    presented and adopted this guidance.

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    NOTES
    TO THE CONSOLIDATED FINANCIAL STATEMENTS

    Accounts
    and notes receivable, net

    The Company extends unsecured credit to
    its customers in the normal course of business. Accounts are considered past due after 180 days. In establishing the required allowance
    for doubtful accounts, management considers historical experience, the economic environment, trends in the construction industry
    and the expected collectability of the overdue receivables. Management reviews its accounts receivable each reporting period to
    determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is recorded when collection of
    the full amount is no longer probable. Account balances are charged off against the allowance after all means of collection have
    been exhausted and the potential for recovering is considered remote. The Company provides an allowance for doubtful accounts provision
    of 15% for accounts receivable balances that are past due more than 180 days but less than one year, an allowance for doubtful
    accounts provision of 40% for accounts receivable past due from one to two years, an allowance for doubtful accounts provision
    of 75% for accounts receivable past due beyond two years, an allowance for doubtful accounts provision of 100% for accounts receivable
    past due beyond three years, plus additional amounts as necessary when the Company’s collection department determines the
    collection of the full amount is remote and the Company’s management approves 100% of the allowance for doubtful accounts.
    The Company’s management has continued to evaluate the reasonableness of its valuation allowance policy and will update it
    if necessary. As of June 30, 2019 and 2018, the Company made $21,191,849 and $19,291,772 allowance for doubtful accounts for accounts
    receivable, respectively.

    Notes receivable represents commercial
    notes due from various customers where the customers’ banks have guaranteed the payments. The notes are noninterest bearing
    and normally paid within three to six months. The Company has the ability to submit requests for payments to the customer’s
    banks earlier than the scheduled payments date, but will incur an interest charge and a processing fee.

    Inventories

    Inventories consist of raw materials and
    are stated at the lower of cost or net realizable value, as determined using the weighted average cost method. Management compares
    the cost of inventories with the net realizable value and an allowance is made for writing down the inventory to its net realizable
    value, if lower than cost. As of June 30, 2019 and 2018, the Company determined that no allowance was necessary.

    Otro
    receivables

    Otro
    receivables primarily include prepayments to be refunded by our suppliers if the supplies do not meet the Company’s specification
    needs, advances to employees, amounts due from unrelated entities refundable, VAT tax and other deposits. Management regularly
    reviews the aging of these receivables and changes in payment trends and records an allowance when management believes collection
    of amounts due are at risk. Accounts considered uncollectible are written off against the allowance after exhaustive efforts at
    collection are made. The Company provides an allowance for doubtful accounts of 5% for other receivables balances that are aged
    within one year, an allowance for doubtful accounts of 50% for other receivables aged from one to two years, and an allowance
    for doubtful accounts of 100% for other receivables aged beyond two years. As of June 30, 2019 and 2018, the Company made $263,049
    and $208,097 allowance for doubtful accounts for other receivables, respectively.

    Prepayments
    and advances

    Prepayments
    are funds deposited or advanced to outside vendors for future inventory purchases. As is standard practice in the PRC, many of
    the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its
    purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its
    vendors, which require any outstanding prepayments to be returned to the Company when such contracts end. The Company provides
    a provision of 5% of the allowance for doubtful accounts for prepayments and advances that are aged from six months to one year
    and 10% of the allowance for doubtful accounts for prepayments and advances aged beyond one year.

    los
    Company provided an allowance of approximately $0.2 million, $0.3 million and $0 on unrealizable prepayments and advances for
    the years ended June 30, 2019, 2018 and 2017, respectively. The Company wrote off approximately $0, $0, and $0.2 million on unrealizable
    prepayments for the years ended June 30, 2019, 2018 and 2017, respectively.

    Property,
    plant and equipment

    Property,
    plant and equipment are stated at cost. Expenditures for maintenance and repairs are charged to operations as incurred while additions,
    renewals and improvements are capitalized. Depreciation is provided over the estimated useful life of each class of depreciable
    assets and is computed using the straight-line method with a 5% residual value. Leasehold improvements are amortized over the
    lesser of estimated useful lives or remaining lease terms, as appropriate.

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    NOTES
    TO THE CONSOLIDATED FINANCIAL STATEMENTS

    los
    estimated useful lives of assets are as follows:

    Useful
        life
    Transportation equipment 7-10 years
    Plant and machinery 10 years
    Office equipment 5 years
    Buildings and improvements 3-20 years

    Construction-in-progress represents contractor
    and labor costs, design fees and inspection fees in connection with the construction of the Company’s cement mixers, cafeteria,
    and office remodel. No depreciation is provided for construction-in-progress until it is completed and placed into service.

    Contabilidad
    for long-lived assets

    The Company classifies its long-lived assets
    into: (i) transportation equipment; (ii) plant and machinery; (iii) office equipment; and (iv) buildings and improvements.

    Long-lived
    assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the
    carrying value of such assets may not be fully recoverable. It is possible that these assets could become impaired as a result
    of technological or other industry changes. If circumstances require a long-lived asset or asset group to be tested for possible
    impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying
    value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an
    impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various
    valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered
    necessary.

    If
    the value of an asset is determined to be impaired, the impairment to be recognized is measured in the amount by which the carrying
    amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount
    or the fair value, less disposition costs.

    There
    were no impairment charges for the years ended June 30, 2019, 2018 and 2017.

    Competitive
    pricing pressures and changes in interest rates could materially and adversely affect the Company’s estimates of future
    net cash flows to be generated by the long-lived assets, and thus could result in future impairment losses.

    Stock-based
    compensation

    The Company records stock-based compensation
    expense for employees at fair value on the grant date and recognizes the expense over the employee’s requisite service period.
    The Company’s expected volatility assumption is based on the historical volatility of the Company’s stock. The expected
    life assumption is primarily based on historical exercise patterns and employee post-vesting termination rate. The risk-free interest
    rate for the expected term of an option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected
    dividend yield is based on the Company’s current and expected dividend policy.

    los
    Company records stock-based compensation expense for non-employees at fair value on the grant date and recognizes the expense
    over the service provider’s requisite service period.

    Income
    taxes

    los
    Company accounts for income taxes in accordance with ASC 740, “Income Taxes,” which requires the Company to use the
    asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized
    for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences
    between financial statement carrying amounts and the tax bases of existing assets and liabilities and operating loss and tax credit
    carry forwards. Under this accounting standard, the effect on deferred income taxes of a change in tax rates is recognized in
    income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that
    some portion, or all of, a deferred tax asset will not be realized.

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    NOTES
    TO THE CONSOLIDATED FINANCIAL STATEMENTS

    ASC
    740-10, “Accounting for Uncertainty in Income Taxes,” defines uncertainty in income taxes and the evaluation of a
    tax position as a two-step process. The first step is to determine whether it is more likely than not that a tax position will
    be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of
    that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount
    of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that has
    a greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not
    recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized
    tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial
    reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax
    are classified as income tax expense in the period incurred. United States federal, state and local income tax returns prior to
    2016 are not subject to examination by any applicable tax authorities. PRC tax returns filed for calendar years ended December
    31, 2016 to 2018 are subject to examination by the applicable tax authorities.

    Value
    Added Tax

    Enterprises
    or individuals who sell commodities, engage in repair and maintenance, or import and export goods in the PRC are subject to a
    value added tax. The standard VAT rate for the Company’s industry is 3% of gross sales, and revenues are presented net of
    VAT.

    Research
    and development

    Research
    and development costs are expensed as incurred. The cost of materials and equipment that are acquired or constructed for research
    and development activities, and have alternative future uses, either in research and development, marketing, or sales, are classified
    as property and equipment, and depreciated over their estimated useful lives.

    Earnings
    (loss) per share

    The Company reports earnings (loss) per
    share in accordance with U.S. GAAP, which requires presentation of basic and diluted earnings (loss) per share in conjunction with
    the disclosure of the methodology used in computing such earnings per share. Basic earnings (loss) per share is computed by dividing
    income (loss) available to common shareholders by the weighted average common shares outstanding during the period.  Diluted
    earnings per share takes into account the potential dilution that could occur if securities or other contracts, such as warrants,
    options, restricted stock based grants and convertible preferred stock, to issue ordinary shares were exercised and converted into
    ordinary shares. Ordinary share equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation
    of diluted earnings per share.

    Dilution is computed by applying the treasury
    stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time
    of issuance, if later), and as if funds obtained thereby were used to purchase ordinary shares at the average market price during
    the period. When the Company has a loss, no potential dilutive items are included since they would be antidilutive.

    Stock
    dividends or stock splits are accounted for retroactively if the stock dividends or stock splits occur during the period, or retroactively
    if the stock dividends or stock splits occur after the end of the period but before the release of the financial statements, by
    considering it effective as of the beginning of each period presented.

    Comprehensive
    income (loss)

    Comprehensive
    income (loss) consists of net income (loss) and foreign currency translation adjustments.

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    NOTES
    TO THE CONSOLIDATED FINANCIAL STATEMENTS

    Recent
    Accounting Pronouncements

    En
    February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will require the recognition of a right-of-use
    (“ROU”) asset and a corresponding lease liability, initially measured at the present value of the lease payments,
    for all leases with terms longer than 12 months. For operating leases, the asset and liability will be expensed over the lease
    term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance
    leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement
    of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity
    while the interest component will be included in the operating section of the statement of cash flows. ASU 2016-02 is effective
    for annual and interim reporting periods beginning after December 15, 2018. In July 2018, the FASB issued ASU No. 2018-11, Leases
    (Topic 842): Targeted Improvements. The amendments is to assisting stakeholders with implementation questions and issues as organizations
    prepare to adopt the new leases standard affect the amendments in ASU 2016-02. Many stakeholders inquired about the following
    two requirements in the new leases standard: 1) Comparative reporting requirements for initial adoption and 2) For lessors only,
    separating lease and nonlease components in a contract and allocating the consideration in the contract to the separate components.
    ASU 2018-11 is effective for annual and interim reporting periods beginning after December 15, 2018. The Company adopted these
    updates on July 1, 2019. The adoption of ASU 2016-02 and 2018-11 will recognize additional operating liabilities of approximately
    $1.3 million, with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments
    under current leasing standards for existing operating leases with a term longer than 12 months.

    En
    June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure
    all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions,
    and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement
    of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods
    within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal
    years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the
    impact that the standard will have on its consolidated financial statements and related disclosures.

    En
    August 2017, the FASB issued ASU No. 2017-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and
    Cash Payments, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement
    of cash flows. The amendments provide guidance on the following eight specific cash flow issues: (1) Debt Prepayment or Debt Extinguishment
    Costs; (2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant
    in Relation to the Effective Interest Rate of the Borrowing; (3) Contingent Consideration Payments Made after a Business Combination;
    (4) Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies,
    including Bank-Owned; (6) Life Insurance Policies; (7) Distributions Received from Equity Method Investees; (8) Beneficial Interests
    in Securitization Transactions; and Separately Identifiable Cash Flows and Application of the Predominance Principle. The amendments
    are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those
    fiscal years. The Company adopted this ASU on July 1, 2018. The adoption of this ASU did not have a material effect on the Company’s
    consolidated financial statements.

    En
    October 2017, the FASB issued ASU No. 2017-17, Consolidation (Topic 810): Interests held through related parties that are under
    common control. The amendments in this ASU require that the reporting entity, in determining whether it satisfies the second characteristic
    of a primary beneficiary, to include all of its direct variable interests in a VIE and, on a proportionate basis, its indirect
    variable interests in a VIE held through related parties, including related parties that are under common control with the reporting
    entity. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, including
    interim periods within those fiscal years. The Company adopted this ASU on July 1, 2018. The adoption of this ASU did not have
    a material effect on the Company’s consolidated financial statements.

    En
    November 2017, the FASB issued ASU No. 2017-18, “Statement of Cash Flows: Restricted Cash”. The amendments address
    diversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash
    flows. The amendment is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods
    within those fiscal years. The Company adopted this ASU on July 1, 2018. The adoption of this ASU did not have a material effect
    on the Company’s consolidated financial statements.

    En
    February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of
    Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required
    to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive
    income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this
    Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal
    years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public
    business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities
    for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update
    should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change
    in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption
    of this ASU on July 1, 2019 will have a material effect on the Company’s consolidated financial statements.

    HUITAO TECHNOLOGY CO., LTD. AND SUBSIDIARIES

    (FORMERLY
    KNOWN AS CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.)

    NOTES
    TO THE CONSOLIDATED FINANCIAL STATEMENTS

    En
    June 2018, the FASB issued ASU 2018-07 – Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee
    Share-Based Payment Accounting, which to include share-based payment transactions for acquiring goods and services from non-employees,
    which nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity
    instruments that an entity is obligated to issue when the goods have been delivered or the service has been rendered and any other
    conditions necessary to earn the right to benefit from the instruments have been satisfied. The definition of the term grant date
    is amended to generally state the date at which a grantor and a grantee reach a mutual understanding of the key terms and conditions
    of a share based payment award. The amendments are effective for public business entities for fiscal years beginning after December
    15, 2018, including interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective
    for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.
    Early adoption is permitted, including adoption in an interim period. Management plans to adopt this ASU during the quarter ending
    September 2019. Management does not believe the adoption of this ASU will have a material effect on the Company’s consolidated
    financial statements.

    En
    August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the
    Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 removes, modifies and adds
    certain disclosure requirements in Topic 820 “Fair Value Measurement”. ASU 2018-13 eliminates certain disclosures
    related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value,
    clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. ASU
    2018-13 is effective for the Company for annual and interim reporting periods beginning July 1, 2020. The Company does not
    believe the adoption of this ASU will not have a material effect on the Company’s consolidated financial statements.

    En
    May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses
    (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for
    the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology.
    The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments
    to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually
    assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial
    Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’
    concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at
    amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information
    by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief
    also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement
    users with decision-useful information. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning
    July 1, 2020. The Company is currently evaluating the impact of ASU 2019-05 will have on its consolidated financial statements.