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CN ENERGY GROUP. INC.

CNEY
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Business Summary

CN Energy Group Inc. operates primarily in China through its operating entities, manufacturing and supplying wood-based activated carbon used in pharmaceutical manufacturing, industrial manufacturing, water purification, environmental protection, and food and beverage production . The company also expanded into the United States in October 2025 through Pathenbot Group Inc., focusing on robotic solutions for small and medium-sized enterprises, including logistics, food service, and industrial robots, along with localized data storage, after-sales support, and product development . The company's core business model revolves around the sale of activated carbon products, which accounted for 100% of total revenue for the fiscal years ended September 30, 2025 and 2024, and 99.9% for the fiscal year ended September 30, 2023 . Revenue from technical services was nil for these periods . The primary customers are activated carbon wholesalers and companies engaged in activated carbon deep processing in Jiangsu Province, Zhejiang Province, Shanghai, and Guangdong Province .

The company's activated carbon products are categorized by Methylene blue number, including medium-quality (less than 11), high-quality (between 11 and 12), superior-quality (between 12 and 13), and customized-quality (more than 13) . Medium and high-quality activated carbon are used in industrial manufacturing, water purification, and environmental protection, while superior and customized-quality are for pharmaceutical manufacturing and food and beverage production . For the fiscal year ended September 30, 2025, the company sold 6,790 tons of medium-quality activated carbon, generating $7,386,746 in revenue (20.8% of total revenue) , 23,035 tons of high-quality activated carbon, generating $26,564,140 in revenue (74.6% of total revenue) , and 1,412 tons of customized-quality activated carbon, generating $1,622,546 in revenue (4.6% of total revenue) . Superior-quality activated carbon sales were nil in fiscal year 2025 . In fiscal year 2024, the company sold 21,027 tons of medium-quality activated carbon for $21,332,813 (41.9% of total revenue) , 12,742 tons of high-quality activated carbon for $15,430,474 (30.3% of total revenue) , 4,443 tons of superior-quality activated carbon for $6,336,579 (12.4% of total revenue) , and 5,776 tons of customized-quality activated carbon for $7,046,661 (13.8% of total revenue) . Additionally, 109,188 pieces of air filter carbon contributed $811,447 (1.6% of total revenue) in fiscal year 2024 . In fiscal year 2023, sales included 11,935 tons of medium-quality activated carbon for $15,178,726 (26.2% of total revenue) , 16,568 tons of high-quality activated carbon for $24,937,352 (43.1% of total revenue) , 7,938 tons of superior-quality activated carbon for $13,159,587 (22.7% of total revenue) , and 3,810 tons of customized-quality activated carbon for $4,603,655 (8.0% of total revenue) . Biomass electricity generated $19,776 in revenue in fiscal year 2023, accounting for 0.0% of total revenue .

For the fiscal year ended September 30, 2025, total revenue was $35,573,432 , gross profit was $647,567 , resulting in a gross profit margin of 1.8% . Operating loss was $10,975,431 , and net loss was $11,142,007 . Cash and restricted cash at year-end were $390,706 , and total working capital was $61.0 million . The company reported accumulated deficits of $27.9 million .

Comparing fiscal year 2025 to fiscal year 2024, total revenue decreased by $15,384,542, or 30.2%, from $50,957,974 to $35,573,432 . This was primarily due to a decrease in activated carbon sales volume by 12,752 tons, or 29.0%, from 43,989 tons to 31,237 tons . Gross profit increased by $828,678, or 457.6%, from a gross loss of $181,111 in fiscal 2024 to a gross profit of $647,567 in fiscal 2025 . Gross profit margin improved by 2.3 percentage points from a gross loss margin of 0.5% to a gross profit margin of 1.8% . Net loss decreased by $2,898,762, or 20.6%, from $14,040,769 in fiscal 2024 to $11,142,007 in fiscal 2025 . Research and development expenses decreased by $133,867, or 99.1%, to $1,279 in fiscal 2025 from $135,146 in fiscal 2024 .

During the fiscal year ended September 30, 2025, the company expanded its business operations into the United States by launching Pathenbot Group Inc. in October 2025 . On January 20, 2025, CN Energy disposed of 100% of its equity in Clean Energy Holdings Limited to Asia Rubber Resources Limited for HKD10,000 (approximately $1,281) . This disposal resulted in an $815,671 gain on disposal of subsidiaries . On April 30, 2025, the company completed the acquisition of a 45% equity interest in Ynong International Group Limited for a total consideration of $40,913,370, consisting of 50,000,000 Class A ordinary shares valued at $10,000,000, assignment of accounts receivables worth $24,548,022, and a cash payment of $6,365,348 . The company recognized a share of net loss from equity investee of $308,681 for the fiscal year ended September 30, 2025, related to this investment . The company also received proceeds of $6.0 million from issuance of ordinary shares, $5.9 million from convertible notes, and $0.5 million from issuance of ordinary shares for warrants exercised during fiscal year 2025 .

Business Outlook

The company is actively pursuing a strategic realignment and business expansion with an emphasis on shifting its strategic focus toward North America, specifically the United States and Canada . This includes developing and scaling additional business lines in robotics products and technical services, and vigorously seeking energy-industry-related opportunities . The company's subsidiary, Pathenbot Group Inc., launched operations in October 2025 in the United States, focusing on providing robotic solutions to small and medium-sized enterprises, with primary products including logistics, food service, and industrial robots, and services such as localized data storage, after-sales support, and product development, research, and sales .

The company plans to increase the capacity of activated carbon production due to increasing demand and orders, which previously necessitated outsourcing to third-party producers . It also intends to expand its customer base by establishing branch offices in strategic areas like Shanghai and Jiangsu Province to increase sales to existing customers, provide support, and acquire new customers . Furthermore, the company will focus on products with growing demand, particularly activated carbon used in the water, food, and beverage industries, and activated carbon for pharmaceutical raw materials, intermediates, and finished products, by continuing its innovative approach and ensuring reliability and efficiency in the delivery supply chain . In the long term, the company plans to explore new business opportunities by strategically establishing or acquiring companies in downstream sectors of the activated carbon industry, such as environment restoration, water purification, and air cleaning, to increase pricing power and minimize risks .

The company initiated cost-cutting measures and ceased its spending in research and development expenses since November 2023 . The planned investment for the renovation of the factory building and construction of the product line in Lishui is RMB30 Million (approximately $4.61 million) . The factory is expected to run 24 hours per day and 300 days per year with a targeted annual output capacity of 36,000 tons of activated carbon .

The company may need additional capital in the future to fund further expansion . If cash requirements exceed available cash, the company may seek to issue equity or debt securities or obtain credit facilities . The issuance and sale of additional equity would result in further dilution to shareholders . The company has positive working capital of $61.0 million and net assets and shareholders’ surplus position of $102.0 million as of September 30, 2025 .

Risk Factors

The company faces significant risks, including the potential for its expansion into the United States through Pathenbot Group Inc. to be unsuccessful, exposing it to additional legal, regulatory, and commercial challenges, and intense competition in the U.S. robotics market . The operating entities' financial results are vulnerable to interruptions in raw material supply, as they depend on a limited number of suppliers, and increases in raw material prices could significantly raise production costs . A majority of activated carbon sales are derived from a small number of customers, with one major customer accounting for 59% of total sales in fiscal year 2025, making the company susceptible to substantial revenue losses if these customers experience business disruptions . Disruptions or delays in production at existing facilities due to various events, including maintenance outages, power failures, or natural disasters, could materially and adversely affect financial results . Reliance on third-party manufacturers for some activated carbon products poses risks of supply shortages, delays, and quality control issues . Future construction projects could incur delays and budget overruns, impacting operating results . Uncertainties regarding future environmental and health and safety laws and regulations, or delays in their enactment, could materially and adversely affect demand for the company's products, particularly activated carbon . The company's ability to compete effectively depends on protecting its trade secrets and intellectual property rights, and a failure to do so could lead to increased competition and adverse financial results . Claims of intellectual property infringement by third parties could result in litigation costs, damages, or prevent product sales . Compliance with environmental laws and regulations could result in significant costs and liabilities, and the company currently does not carry insurance for environmental risks . The company is exposed to various litigation risks, including environmental damage, intellectual property, and employee-related matters, which could increase expenses and adversely affect financial results . The activated carbon industry is highly competitive and characterized by evolving standards and rapid technological change, which could adversely affect the company's ability to remain competitive . Development of competitive technologies or a shift away from coal-burning technology could diminish demand for activated carbon products . Failure to hire, train, and retain qualified managerial and other employees could materially and adversely affect the business . The company's lease agreements for properties have not been registered with PRC government authorities, potentially exposing it to fines ranging from RMB1,000 to RMB10,000 for each unregistered lease . Unexpected termination or unfavorable terms of leases could materially and adversely affect the business . Reliance on third parties for construction, maintenance, engineering, transportation, warehousing, and logistics services introduces risks of delays and operational disruptions . Future acquisitions may adversely affect the company's ability to manage its business and could lead to dilution or increased debt . A severe or prolonged slowdown in the Chinese economy could materially and adversely affect the business . Changes in PRC government policies, regulations, and enforcement, which can occur quickly, could significantly impact profitability . The Chinese government's significant oversight and discretion could intervene or influence operations at any time, potentially causing material changes to operations or the value of ordinary shares . Greater oversight by the Cyberspace Administration of China (CAC) over data security, particularly for companies seeking foreign listings, could adversely impact the business, although the company believes it is not currently subject to such review . The Opinions issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council may subject the operating entities to additional compliance requirements . Tariffs by the U.S. government and trade tensions could negatively impact business operations and revenue . Increases in labor costs in the PRC may adversely affect profitability . The operating entities are not in compliance with PRC regulations relating to employee benefit plans, potentially leading to penalties, including fines equal to one to three times the underpaid amount for social insurance and RMB10,000 to RMB50,000 for housing provident fund failures . As a British Virgin Islands corporation with primary operations in China, shareholders may face difficulties in bringing actions against the company or its officers and directors, or enforcing judgments . Joint statements by the SEC and PCAOB, along with the Holding Foreign Companies Accountable Act, could lead to more stringent criteria for auditors of emerging market companies, potentially resulting in delisting if the auditor is not subject to PCAOB inspection for two consecutive years . PRC regulations on offshore investment activities by PRC residents may limit the ability of PRC subsidiaries to increase capital or distribute profits . The company relies on dividends from PRC subsidiaries, which are subject to PRC regulations and potential withholding taxes . PRC governmental control of currency conversion may delay or prevent the use of financing proceeds for PRC subsidiaries . Exchange rate fluctuations between RMB and U.S. dollars may significantly impact business and profitability . Classification as a Passive Foreign Investment Company (PFIC) could result in adverse U.S. federal income tax consequences for U.S. taxpayers . Substantial future sales of Class A ordinary shares could cause the price to decline . The company does not expect to pay dividends in the foreseeable future, requiring reliance on price appreciation for investment return . The share incentive plan could lead to significant dilutive effects . Lack of securities analyst coverage may negatively impact the market price . The trading price of Class A ordinary shares is likely to be volatile . Techniques employed by short sellers may drive down the market price . Being a public company may strain resources and divert management's attention . Ceasing to qualify as a foreign private issuer would incur significant additional expenses . Reliance on exemptions from Nasdaq corporate governance standards provides less protection than for domestic issuers . Failure to satisfy Nasdaq listing requirements could lead to delisting . The auditor's explanatory paragraph regarding going concern raises substantial doubt about the company's ability to continue . An active trading market for Class A ordinary shares may not be sustained . Anti-takeover provisions in the articles of association may discourage or delay a change in control . The exclusive jurisdiction provision in the articles of association may limit shareholders' ability to obtain a favorable judicial forum . The board of directors may refuse or delay the registration of share transfers in certain circumstances . A material weakness in internal control over financial reporting due to insufficient in-house personnel with U.S. GAAP and SEC reporting knowledge could adversely affect financial reporting and stock price . As an "emerging growth company," the company may take advantage of exemptions from disclosure requirements, making performance comparisons difficult . British Virgin Islands economic substance legislation may adversely impact the company or its operations .

Management Priorities

Management's message to shareholders emphasizes a strategic realignment and business expansion, with a primary focus on shifting operations towards North America, specifically the United States and Canada . This strategic shift includes developing and scaling additional business lines in robotics products and technical services, and actively seeking opportunities within the energy industry . The company also intends to increase the capacity of activated carbon production, expand its customer base, and concentrate on products with growing demand, particularly in the water, food, and beverage industries, and for pharmaceutical raw materials . Management explicitly states that the company initiated cost-cutting measures and ceased spending on research and development expenses since November 2023 . The company anticipates needing significant additional capital in the future to fund further expansion and may seek to issue equity or debt securities or obtain credit facilities if cash requirements exceed available cash . The auditor's opinion includes an explanatory paragraph indicating substantial doubt about the company's ability to continue as a going concern, a matter management is actively trying to alleviate through improved accounts receivable management, strategic investor engagement, and equity or debt financing .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 3, Key Information — Information on the Company
  2. [2] Item 3, Key Information — Risks Relating to Our Business — Our expansion into the United States through the operations of Pathenbot Group Inc. may not be successful and could expose us to additional risks, which may adversely affect our business, financial condition, and results of operations.
  3. [3] Item 4, Information on the Company — B. Business Overview
  4. [4] Item 4, Information on the Company — B. Business Overview
  5. [5] Item 4, Information on the Company — B. Business Overview
  6. [6] Item 4, Information on the Company — B. Business Overview — Products
  7. [7] Item 4, Information on the Company — B. Business Overview — Products
  8. [8] Item 4, Information on the Company — B. Business Overview — Products
  9. [9] Item 4, Information on the Company — B. Business Overview — Products
  10. [10] Item 4, Information on the Company — B. Business Overview — Products
  11. [11] Item 4, Information on the Company — B. Business Overview — Products
  12. [12] Item 4, Information on the Company — B. Business Overview — Products
  13. [13] Item 4, Information on the Company — B. Business Overview — Products
  14. [14] Item 4, Information on the Company — B. Business Overview — Products
  15. [15] Item 4, Information on the Company — B. Business Overview — Products
  16. [16] Item 4, Information on the Company — B. Business Overview — Products
  17. [17] Item 4, Information on the Company — B. Business Overview — Products
  18. [18] Item 4, Information on the Company — B. Business Overview — Products
  19. [19] Item 4, Information on the Company — B. Business Overview — Products
  20. [20] Item 4, Information on the Company — B. Business Overview — Products
  21. [21] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2024 and 2023 — Revenue
  22. [22] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024
  23. [23] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024
  24. [24] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 — Gross profit (loss)
  25. [25] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024
  26. [26] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024
  27. [27] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Cash Flows for the Fiscal Years Ended September 30, 2025, 2024, and 2023
  28. [28] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Liquidity
  29. [29] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Liquidity
  30. [30] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024
  31. [31] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 — Revenues
  32. [32] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 — Gross profit (loss)
  33. [33] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 — Gross profit (loss)
  34. [34] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024
  35. [35] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 — Research and Development Expenses
  36. [36] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — Our expansion into the United States through the operations of Pathenbot Group Inc. may not be successful and could expose us to additional risks, which may adversely affect our business, financial condition, and results of operations.
  37. [37] Item 4, Information on the Company — A. History and Development of the Company
  38. [38] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 — Gain on disposal of subsidiaries
  39. [39] Item 4, Information on the Company — A. History and Development of the Company — Completion of Ynong Acquisition
  40. [40] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 — Share of net loss from equity investees
  41. [41] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Cash Flows for the Fiscal Years Ended September 30, 2025, 2024, and 2023 — Financing Activities
  42. [42] Item 4, Information on the Company — B. Business Overview — Growth Strategies
  43. [43] Item 4, Information on the Company — B. Business Overview — Growth Strategies
  44. [44] Item 4, Information on the Company — B. Business Overview
  45. [45] Item 4, Information on the Company — B. Business Overview — Growth Strategies
  46. [46] Item 4, Information on the Company — B. Business Overview — Growth Strategies
  47. [47] Item 4, Information on the Company — B. Business Overview — Growth Strategies
  48. [48] Item 4, Information on the Company — B. Business Overview — Growth Strategies
  49. [49] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 — Research and Development Expenses
  50. [50] Item 4, Information on the Company — B. Business Overview — Facilities
  51. [51] Item 4, Information on the Company — B. Business Overview — Facilities
  52. [52] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Liquidity
  53. [53] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Liquidity
  54. [54] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Liquidity
  55. [55] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Liquidity
  56. [56] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — Our expansion into the United States through the operations of Pathenbot Group Inc. may not be successful and could expose us to additional risks, which may adversely affect our business, financial condition, and results of operations.
  57. [57] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — The operating entities’ financial results could be materially and adversely affected by an interruption of supply of raw materials.
  58. [58] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — A majority of the operating entities’ activated carbon sales are currently derived from a small number of customers. If any of these customers experiences a material business disruption, the operating entities would likely incur substantial losses of revenue.
  59. [59] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — A disruption or delay in production at the operating entities’ existing production facilities could have a material adverse effect on their financial results.
  60. [60] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — The operating entities rely on third-party manufacturers to produce some of their activated carbon products and problems with, or loss of, these manufacturers could harm the operating entities’ business and operating results.
  61. [61] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — The operating entities may incur delays and budget overruns with respect to any facilities they construct. Any such delays or cost overruns may have a material adverse effect on the operating entities’ operating results.
  62. [62] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — Uncertainties as to the future of existing and planned environmental and health and safety laws and regulations, as well as delays of or changes to these laws and regulations, could have a material adverse effect on demand for the operating entities’ products.
  63. [63] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — Disclosure of the operating entities’ trade secrets and other proprietary information, or a failure to adequately protect these or the operating entities’ other intellectual property rights, could result in increased competition and have a material adverse effect on the operating entities’ business and financial results.
  64. [64] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — Third parties may claim that the operating entities’ products or processes infringe their intellectual property rights, which may cause them to pay unexpected litigation costs or damages or prevent them from selling their products.
  65. [65] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — Compliance with environmental and other laws and regulations could result in significant costs and liabilities.
  66. [66] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — The operating entities’ operations are subject to various litigation risks that could increase the operating entities’ expenses and have a material adverse effect on their business and financial results.
  67. [67] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — The operating entities may not be able to keep up with competitive changes affecting the activated carbon industry.
  68. [68] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — Development of competitive technologies could materially and adversely affect the operating entities’ business and financial results.
  69. [69] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — If the operating entities fail to hire, train, and retain qualified managerial and other employees, the operating entities’ business and results of operations could be materially and adversely affected.
  70. [70] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — The lease agreements of the operating entities’ leased properties have not been registered with the relevant PRC government authorities as required by PRC laws, which may expose them to potential fines.
  71. [71] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — Unexpected termination of leases or other arrangements, failure to negotiate satisfactory terms for or duly perform leases or other arrangements, failure to renew the leases or other arrangements of the existing premises of the operating entities or to renew such leases or other arrangements at acceptable terms could materially and adversely affect our business, financial condition, results of operations and prospects.
  72. [72] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — The operating entities depend on third parties for certain construction, maintenance, engineering, transportation, warehousing, and logistics services.
  73. [73] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Business — Future acquisitions may have an adverse effect on the operating entities’ ability to manage their business.
  74. [74] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — A severe or prolonged slowdown in the Chinese economy could materially and adversely affect the operating entities’ business and financial condition.
  75. [75] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little advance notice and could have a significant impact upon the operating entities’ ability to operate profitably in the PRC.
  76. [76] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — Given the Chinese government’s significant oversight and discretion over the conduct of the operating entities’ business, the Chinese government may intervene or influence the operating entities’ operations at any time, which could result in a material change in their operations and/or the value of our ordinary shares.
  77. [77] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — Greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact the operating entities’ business and our offerings.
  78. [78] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — The Opinions issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council may subject the operating entities to additional compliance requirement in the future.
  79. [79] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — The tariffs by the U.S. government and the trade war between the U.S. and China, and on a larger scale, internationally, may dampen global growth. If the U.S. government, in the future, subjects the products that the operating entities produce to tariffs, the operating entities’ business operations and revenue may be negatively impacted.
  80. [80] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — Increases in labor costs in the PRC may adversely affect the operating entities’ business and profitability.
  81. [81] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — The operating entities are not in compliance with the PRC’s regulations relating to employee benefit plans, and as a result, they may be subject to penalties if they are not able to remediate the non-compliance.
  82. [82] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — Because we are a British Virgin Islands corporation and substantial all of our business is conducted in the PRC, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.
  83. [83] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — Joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offerings.
  84. [84] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or otherwise expose us or our PRC resident shareholders to liabilities or penalties.
  85. [85] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirement we may have, and any limitation on the ability of our subsidiaries to make payments to us and any tax we are required to pay could have a materially adverse effect on our ability to conduct our business.
  86. [86] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using proceeds from our future financing activities to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
  87. [87] Item 3, Key Information — D. Risk Factors — Risks Relating to Doing Business in the PRC — Because the operating entities’ business is conducted in RMB and the price of our ordinary shares is quoted in U.S. dollars, changes in currency conversion rates may affect us.
  88. [88] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — If we are classified as a PFIC, United States taxpayers who own our Class A ordinary shares may have adverse United States federal income tax consequences.
  89. [89] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — Substantial future sales of our Class A ordinary shares or the anticipation of future sales of our ordinary shares, whether by us or our shareholders, could cause the price of our Class A ordinary shares to decline.
  90. [90] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — Because we do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our Class A ordinary shares for return on your investment.
  91. [91] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — We have adopted a share incentive plan and may grant share-based awards in the future, which could lead to share-based compensation expenses and significant dilutive effect to existing shareholders.
  92. [92] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — Securities analysts may not cover our Class A ordinary shares and this may have a negative impact on the market price of our Class A ordinary shares.
  93. [93] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — The trading price of our Class A ordinary shares is likely to be volatile, which could result in substantial losses to our investors.
  94. [94] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — Techniques employed by short sellers may drive down the market price of our Class A ordinary shares.
  95. [95] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — The requirements of being a public company may strain our resources and divert management’s attention.
  96. [96] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting, and other expenses that we would not incur as a foreign private issuer.
  97. [97] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — Because we are a foreign private issuer and have taken advantage of exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.
  98. [98] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — If we cannot satisfy, or continue to satisfy, the continued listing requirements and other rules of the Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.
  99. [99] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — Our auditor have included an explanatory paragraph in their opinion regarding our ability to continue as a going concern. If we are unable to continue as a going concern, our securities will have little or no value.
  100. [100] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — We do not know whether a market for the Class A ordinary shares will be sustained or what the trading price of the Class A ordinary shares will be and as a result it may be difficult for you to sell your Class A ordinary shares.
  101. [101] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — Anti-takeover provisions in our third amended and restated memorandum and articles of association may discourage, delay, or prevent a change in control.
  102. [102] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — The exclusive jurisdiction provision in our third amended and restated articles of association may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
  103. [103] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — Our board of directors may refuse or delay the registration of the transfer of ordinary shares in certain circumstances.
  104. [104] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — During the course of the audit of our consolidated financial statements, we identified a material weakness in our internal control over financial reporting. If we fail to establish and maintain an effective system of internal control over financial reporting, our ability to accurately and timely report our financial results or prevent fraud may be adversely affected, and investor confidence and the market price of our ordinary shares may be adversely impacted.
  105. [105] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — We are an “emerging growth company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this will make it more difficult to compare our performance with other public companies.
  106. [106] Item 3, Key Information — D. Risk Factors — Risks Relating to Our Ordinary Shares and the Trading Market — Economic substance legislation of the British Virgin Islands may adversely impact us or our operations.
  107. [107] Item 4, Information on the Company — B. Business Overview — Growth Strategies
  108. [108] Item 4, Information on the Company — B. Business Overview — Growth Strategies
  109. [109] Item 4, Information on the Company — B. Business Overview — Growth Strategies
  110. [110] Item 5, Operating and Financial Review and Prospects — A. Operating Results — Comparison of Results of Operations for the Fiscal Years Ended September 30, 2025 and 2024 — Research and Development Expenses
  111. [111] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Liquidity
  112. [112] Item 5, Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Liquidity

Analysis on 5/22/2026