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1、F-1/A 1 formf-1a.htm As filed with the U.S.Securities and Exchange Commission on August 22,2023.Registration Statement No. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 Form F-1(Amendment No.2)REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 Nature Wood Group Lim
2、ited(Exact name of Registrant as specified in its charter)Not Applicable(Translation of Registrants name into English)British Virgin Islands 800 Not Applicable(State or other jurisdiction of incorporation or organization)(Primary Standard Industrial Classification Code Number)(I.R.S.Employer Identif
3、ication Number)Avenida da Amizade no.1287Chong Fok Centro Comercial,13 EMacau S.A.R(+853)2855-3594(Address,including zip code,and telephone number,including area code,of Registrants principal executive offices)c/o Cogency Global Inc.122 East 42nd Street,18th FloorNew York,NY 10168(212)947-7200(Name,
4、address,including zip code,and telephone number,including area code,of agent for service)Copies of all communications,including communications sent to agent for service,should be sent to:Lawrence S.Venick,Esq.Loeb&Loeb LLP2206-19 Jardine House1 Connaught Place,Central Ying Li,Esq.Guillaume de Sampig
5、ny,Esq.Hunter Taubman Fischer&Li LLC950 Third Avenue,19th FloorNew York,NY 10022Hong Kong SARTelephone:+852-3923-1111Telephone:+1(212)530-2206 Approximate date of commencement of proposed sale to public:As soon as practicable after this Registration Statementbecomes effective.If any of the securitie
6、s being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415under the Securities Act of 1933,as amended,check the following box.If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act,check the
7、following box and list the Securities Act registration statement number of the earlier effective registration statement for the sameoffering.If this Form is a post-effective amendment filed pursuant to Rule 462(c)under the Securities Act,check the following box andlist the Securities Act registratio
8、n statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under the Securities Act,check the following box andlist the Securities Act registration statement number of the earlier effective registra
9、tion statement for the same offering.Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act:Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mar
10、kif the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 7(a)(2)(B)of the Securities Act.The term“new or revised financial accounting standard”refers to any update issued by the Financial
11、 AccountingStandards Board to its Accounting Standards Codification after April 5,2012.The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay itseffective date until the Registrant shall file a further amendment which specifically states that this
12、 registration statementshall thereafter become effective in accordance with Section 8(a)of the Securities Act of 1933,as amended,or until theregistration statement shall become effective on such date as the Commission,acting pursuant to such Section 8(a),maydetermine.The information in this prospect
13、us is not complete and may be changed.We may not sell these securities until theregistration statement filed with the U.S.Securities and Exchange Commission is effective.This prospectus is not an offerto sell these securities and it is not soliciting an offer to buy these securities in any jurisdict
14、ion where the offer or sale is notpermitted.PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION,DATED AUGUST 22,2023 915,000 American Depositary Shares Nature Wood Group Limited Representing 7,320,000 ordinary shares This is the initial public offering in the United States of American depositary shares,or
15、ADSs,representing ordinary shares ofNature Wood Group Limited(the“Company”),a British Virgin Islands(the“BVI”)company.We are offering 915,000 ADSs.Each ADS represents eight ordinary shares,$0.001 par value per share(the“Ordinary Share”)on a firm commitment basis.Weexpect that the initial public offe
16、ring price will be between$9 and$11 per ADS.We intend to apply to list our ADSs on the Nasdaq Capital Market under the symbol“NWGL”.This offering is contingent onthe listing of our ADSs on the Nasdaq Capital Market.However,there is no assurance that such application will be approved,andif our applic
17、ation is not approved,this offering may not be completed.Our Company is a holding company incorporated in the BVI.As a holding company with no material operations of our own,we conduct our operations mainly in Peru,France,Hong Kong and Macau,through our subsidiaries,including Swift Top CapitalResour
18、ces Limited,Parquet Nature(France)S.A.R.L.,Choi Chon Investment Company Limited,South American Wood S.A.C.,Grupo Maderero Amaz S.A.C.,Zhang Hermanos S.A.C.,E&T Forestal S.A.C.,Nuevo San Martin S.A.C.,Sepahua Tropical ForestS.A.C.,Maderera Industrial Isabelita S.A.C.,Saavedra Forest S.A.C.,Inversione
19、s H.S.T.S.A.C.,Forestal Tuesta S.A.C.,AgroForest A&J S.A.C.,Sanra Inversiones S.A.C.,and Latinoamerican Forest S.A.C.(collectively,the“Operating Subsidiaries”).This is an offering of the ADSs of our Company,the holding company in the BVI,instead of shares of our OperatingSubsidiaries.You may never d
20、irectly hold any equity interest in our Operating Subsidiaries.We are offering 915,000 ADSs of ourCompany,representing 6.5%of the issued and outstanding Ordinary Shares following completion of the offering of our Company.Following the offering,915,000 ADSs,representing 6.5%of the issued and outstand
21、ing Ordinary Shares will be held by publicshareholders,assuming the underwriters do not exercise their over-allotment option.Following the completion of this offering,we will be a“controlled company”within the meaning of the NASDAQ StockMarket Rules and may rely on exemptions from certain corporate
22、governance requirements.As at the date of this prospectus,approximately 86.3%of the issued share capital of the Company is owned by Easy Bliss Limited,which in turn is ownedapproximately 60.2%by Mr.Hok Pan Se,our Director.Mr.Hok Pan Se therefore beneficially owns approximately 51.9%of ourtotal votin
23、g power as at the date of this prospectus.Following completion of this offering,approximately 80.6%of the issued sharecapital of the Company will be owned by Easy Bliss Limited and Mr.Hok Pan Se will in turn beneficially own approximately48.6%of our total voting power.Following completion of this of
24、fering and assuming full conversion of the outstanding convertiblebonds of the Company,approximately 68.2%of the issued share capital of the Company will be owned by Easy Bliss Limited andMr.Hok Pan Se will in turn beneficially own approximately 42.7%of our total voting power.See“Management Controll
25、edCompany Exception”.As our Company is a holding company incorporated in the BVI and not a Chinese operating company,our operations in HongKong,Macau and China are conducted by our subsidiaries based in Hong Kong,Macau and China.The ADSs offered in thisoffering are shares of Nature Wood Group Limite
26、d,the BVI holding company,instead of shares of the Operating Subsidiaries.Investors in this offering are purchasing interests in the BVI holding company and will not directly hold equity interests in theOperating Subsidiaries.This structure involves unique risks to investors.See“Risk Factors”beginni
27、ng on page 11 of thisprospectus for a discussion of risks facing the Company and the offering as a result of this structure.We may be subject to uniquerisks due to uncertainty of the interpretation and the application of the PRC laws and regulations,including but not limited to thecybersecurity revi
28、ew and regulatory review of overseas listing of our ADSs through an offshore holding company.We are alsosubject to the risks of uncertainty about any future actions of the Chinese government or authorities in Hong Kong and Macau inthis regard.Should the Chinese government choose to exercise signific
29、ant oversight and discretion over the conduct of our business,theymay intervene in or influence our operations.Such governmental actions:could affect our operations;could significantly limit or completely hinder our ability to continue our operations;could hinder our ability to continue to offer sec
30、urities to investors;and may cause the value of our ADSs to significantly decline or be worthless.Additionally,although we have direct ownership of our operating entities in Hong Kong,Macau and China and currently donot have or intend to have any contractual arrangement to establish a variable inter
31、est entity(“VIE”)structure with any entity inChina,we are still subject to certain legal and operational risks associated with our Operating Subsidiaries in Hong Kong,Macauand China.In addition,our ADSs may be prohibited from trading on a national exchange or over-the-counter under the Holding Forei
32、gnCompanies Accountable Act(the“HFCA Act”)(as amended by the Accelerating Holding Foreign Companies Accountable Act,which was enacted on December 29,2022)if the Public Company Accounting Oversight Board(United States)(the“PCAOB”)isunable to inspect our auditors for two consecutive years.Our auditor
33、has been inspected by the PCAOB on a regular basis,with thelast inspection in December 2021,and our auditor is not subject to the determinations announced by the PCAOB on December 16,2021,which determinations were vacated on December 15,2022.If trading in our ADSs is prohibited under the HFCA Act in
34、 thefuture because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time,Nasdaq maydetermine to delist our ADSs and trading in our ADSs could be prohibited.On August 26,2022,the PCAOB signed SOPAgreements with the China Securities Regulatory Commission and
35、Chinas Ministry of Finance.The SOP Agreements establisheda specific,accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based inmainland China and Hong Kong,as required under U.S.law.On December 15,2022,the PCAOB announced that it was able tosec
36、ure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China andHong Kong completely in 2022.The PCAOB vacated its previous 2021 determinations that the PCAOB was unable to inspect orinvestigate completely registered public accounting firms
37、headquartered in mainland China and Hong Kong.However,whether thePCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquarteredin mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our,and o
38、ur auditors,control.However,if the PCAOB continues to be prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong,the PCAOB is likely to determine by the end of 2023 thatpositions taken by authorities in the PRC ob
39、structed its ability to inspect and investigate registered public accounting firms inmainland China and Hong Kong completely,then the companies audited by those registered public accounting firms would besubject to a trading prohibition on U.S.markets pursuant to the Holding Foreign Companies Accoun
40、table Act.See“Risk Factors Risks Related to Doing Business in China Although the audit report included in this prospectus is prepared by U.S.auditorswho are currently inspected by the PCAOB,there is no guarantee that future audit reports will be prepared by auditors inspectedby the PCAOB and,as such
41、,in the future investors may be deprived of the benefits of such inspection.Furthermore,trading in ourADSs may be prohibited under the HFCA Act if the SEC subsequently determines our audit work is performed by auditors that thePCAOB is unable to inspect or investigate completely,and as a result,U.S.
42、national securities exchanges,such as the Nasdaq,maydetermine to delist our securities.Furthermore,on December 29,2022,the Accelerating Holding Foreign Companies AccountableAct was enacted,which amended the HFCA Act and requires the SEC to prohibit an issuers securities from trading on any U.S.stock
43、 exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three,and thus,wouldreduce the time before our ADSs may be prohibited from trading or delisted.”Our ability to pay dividends depends upon dividends paid by our subsidiaries.If the PRC subsidiary or any
44、 newly formedPRC subsidiaries incur debt on their own behalf in the future,the instruments governing their debt may restrict their ability to paydividends to us.In addition,the PRC subsidiary is permitted to pay dividends to us only out of their respective retained earnings,ifany,as determined in ac
45、cordance with Chinese accounting standards and regulations.Under applicable PRC laws and regulations,PRC subsidiary is required to set aside a portion of its after tax profits each year to fund certain statutory reserves,and funds fromsuch reserves may not be distributed to us as cash dividends exce
46、pt in the event of liquidation of such subsidiaries.These statutorylimitations affect,and future covenant debt limitations might affect,the PRC subsidiarys ability to pay dividends to us.We havenot declared or paid dividends in the past,nor any dividends or distributions were made by a subsidiary to
47、 our holding company.We do not intend to distribute dividends in the foreseeable future,but we do not have a fixed dividend policy.Our board ofdirectors have complete discretion on whether to distribute dividends,subject to applicable laws.See“Prospectus Summary Our Corporate Structure Transfers of
48、Cash to and from our Subsidiaries”.To the extent cash or assets in our business is in the PRC or Hong Kong or in our PRC or Hong Kong subsidiaries,the fundsor assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or theimposition of r
49、estrictions and limitations on our ability or the ability of our subsidiaries by the PRC government to transfer cash orassets.See“Risk Factors Risks Relating to Doing Business in China In the event that we rely on dividends and otherdistributions on equity paid by our PRC or Hong Kong subsidiaries t
50、o fund any cash and financing requirements we may have,anylimitation on the ability of our PRC or Hong Kong subsidiaries to make payments to us could have a material and adverse effect onour ability to conduct our business”and“To the extent cash or assets in our business is in the PRC or Hong Kong o
51、r in our PRCor Hong Kong subsidiaries,the funds or assets may not be available to fund operations or for other use outside of the PRC or HongKong due to interventions in or the imposition of restrictions and limitations on our ability or the ability of our subsidiaries by thePRC government to transf
52、er cash or assets”.Our holding company Nature Wood Group Limited indirectly controls our subsidiaries.Within our holding structure,thecross-border transfer of funds within our corporate group is legal and compliant with the laws and regulations of the respectivejurisdictions where our Operating Subs
53、idiaries were established,including Peru,France,Hong Kong and Macau.After foreigninvestors funds enter our Company at the closing of this offering,the funds can be transferred directly to Nature Flooring(Europe)Company Limited and Peru Forestry Management Co.,Limited,and then to our Operating Subsid
54、iaries.If our Company intends todistribute dividends in the future,the Operating Subsidiaries will transfer the dividends to Nature Flooring(Europe)CompanyLimited and Peru Forestry Management Co.,Limited in accordance with the laws and regulations of Peru,France,Hong Kong andMacau,and then Nature Fl
55、ooring(Europe)Company Limited and Peru Forestry Management Co.,Limited will transfer thedividends to our Company,and the dividends will then be distributed from our Company to all shareholders respectively inproportion to the shares they hold,regardless of whether the shareholders are U.S.investors
56、or investors in other countries orregions.As at the date of this prospectus,no transfer,dividend or distribution have been made between our Company,itssubsidiaries and consolidated entities,or to investors.For the year ended December 31,2022 and 2021 and up to the date of this prospectus,we did not
57、declare or pay anydividends.As at the date of this prospectus,dividend payables balance was nil.We do not have any current intentions to distributefurther earnings.If we determine to pay dividends on any of our ADSs in the future,as a holding company,we will be dependenton receipt of funds from our
58、subsidiaries by way of dividend payments.See“Dividend Policy”,Summary Consolidated FinancialData and Consolidated Statements of Change in Shareholders Equity in the Report of Independent Registered Public AccountingFirm for further details.We are aware that recently the PRC government initiated a se
59、ries of regulatory actions and statements to regulate businessoperations in certain areas in China,including cracking down on illegal activities in the securities market,enhancing supervisionover China-based companies listed overseas using variable interest entity structure,adopting new measures to
60、extend the scope ofcybersecurity reviews,expanding the efforts in anti-monopoly enforcement and regulating the overseas offering and listingactivities involving PRC domestic companies.Since these statements and regulatory actions are new,it is uncertain how soon thelegislative or administrative regu
61、lation making bodies will respond and what existing or new laws or regulations or detailedimplementations and interpretations will be modified or promulgated,if any.It is also uncertain what the potential impact suchmodified or new laws and regulations will have on our daily business operation in Ho
62、ng Kong,Macau or the PRC,our ability toaccept foreign investments and the listing of our ADSs on a U.S.or other foreign exchanges.Investing in our ADSs is highly speculative and involves a high degree of risk.Before buying any shares,you shouldcarefully read the discussion of material risks of inves
63、ting in our ADSs in“Risk Factors”beginning on page 11 of thisprospectus.We are an“emerging growth company”as defined under the federal securities laws and,as such,will be subject toreduced public company reporting requirements.See“Prospectus Summary Implications of Being an Emerging GrowthCompany an
64、d a Foreign Private Issuer”for additional information.Neither the U.S.Securities and Exchange Commission nor any other regulatory body has approved or disapproved ofthese securities or passed upon the accuracy or adequacy of this prospectus.Any representation to the contrary is acriminal offense.PER
65、 ADS TOTALInitial public offering price$*$*Underwriting discounts(1)$*$*Proceeds,before expenses,to us$*$*(1)For a description of the compensation to be received by the underwriters,see“Underwriting”beginning on page 123.We expect our total cash expenses for this offering(including cash expenses pay
66、able to our underwriters for their out-of-pocket expenses)to be approximately$*,exclusive of the above discounts.In addition,we will pay additional items of value inconnection with this offering that are viewed by the Financial Industry Regulatory Authority,or FINRA,as underwritingcompensation.These
67、 payments will further reduce proceeds available to us before expenses See“Underwriting.”This offering is being conducted on a firm commitment basis.The underwriters are obligated to take and pay for all of theshares if any such shares are taken.We have granted the underwriters an option for a perio
68、d of thirty days after the closing of thisoffering to purchase up to 15%of the total number of our ADSs to be offered by us pursuant to this offering(excluding sharessubject to this option),solely for the purpose of covering over-allotments,at the initial public offering price less the underwritingd
69、iscounts.If the underwriters exercise the option in full,the total underwriting discounts payable will be$*based on an assumedinitial public offering price of$10 per ADS(the midpoint of the price range set forth on the cover page of this prospectus),and thetotal gross proceeds to us,before underwrit
70、ing discounts and expenses,will be$*.If we complete this offering,net proceeds willbe delivered to us on the closing date.We will not be able to use such proceeds in China,however,until we complete capitalcontribution procedures which require prior approval from each of the respective local counterp
71、arts of Chinas Ministry ofCommerce,the State Administration for Market Regulation,and the State Administration of Foreign Exchange.See remittanceprocedures in the section titled“Use of Proceeds”beginning on page 43.The underwriters expect to deliver the ADSs against payment as set forth under“Underw
72、riting”,on or about*,2023.Prime Number Capital The date of this prospectus is ,2023.TABLE OF CONTENTS PageProspectus Summary1Risk Factors11Special Note Regarding Forward-Looking Statements30Industry and Market Data31Use of Proceeds43Dividend Policy44Capitalization45Dilution46Exchange Rate Informatio
73、n47Corporate History and Structure48Selected Consolidated Financial Data51Managements Discussion and Analysis of Financial Condition and Results of Operations52Business61Regulation72Management86Related Party Transactions90Principal Shareholders91Description of Share Capital and Governing Documents92
74、Description of American Depositary Shares101Shares Eligible for Future Sale112Material Income Tax Considerations114Underwriting123Expenses Related to this Offering131Legal Matters132Experts132Enforcement of Liabilities133Where You Can Find Additional Information135Index to Consolidated Financial Sta
75、tementsF-1 We are responsible for the information contained in this prospectus and any free writing prospectus we prepare orauthorize.We have not,and the underwriters have not,authorized anyone to provide you with different information,andwe and the underwriters take no responsibility for any other
76、information others may give you.We are not,and theunderwriters are not,making an offer to sell our ADSs in any jurisdiction where the offer or sale is not permitted.Youshould not assume that the information contained in this prospectus is accurate as of any date other than the date on thefront cover
77、 of this prospectus,regardless of the time of delivery of this prospectus or the sale of any ADSs.For investors outside the United States:Neither we nor the underwriters have done anything that would permit this offering orpossession or distribution of this prospectus in any jurisdiction,other than
78、the United States,where action for that purpose isrequired.Persons outside the United States who come into possession of this prospectus must inform themselves about,andobserve any restrictions relating to,the offering of the ADSs and the distribution of this prospectus outside the United States.Our
79、 Company is incorporated under the laws of the British Virgin Islands and a majority of our outstanding securities areowned by non-U.S.residents.Under the rules of the U.S.Securities and Exchange Commission,or the SEC,we currently qualifyfor treatment as a“foreign private issuer.”As a foreign privat
80、e issuer,we will not be required to file periodic reports and financialstatements with the Securities and Exchange Commission,or the SEC,as frequently or as promptly as domestic registrants whosesecurities are registered under the Securities Exchange Act of 1934,as amended,or the Exchange Act.Until
81、and including ,2023(twenty-five(25)days after the date of this prospectus),all dealers that buy,sell or tradeour ADSs,whether or not participating in this offering,may be required to deliver a prospectus.This delivery requirementis in addition to the obligation of dealers to deliver a prospectus whe
82、n acting as underwriters and with respect to theirunsold allotments or subscriptions.i CONVENTIONS THAT APPLY TO THIS PROSPECTUS Unless otherwise indicated or the context otherwise requires,all references in this prospectus to:“ADSs”are to American depositary shares,each of which represents eight or
83、dinary shares;“BVI”are to the British Virgin Islands;“FSC”are to the Forest Stewardship Council;“Hong Kong”are to the Hong Kong Special Administrative Region in the Peoples Republic of China;“Macau”are to the Macao Special Administrative Region in the Peoples Republic of China;“Ordinary Shares”are t
84、he ordinary shares of our Company,par value of$0.001 per share;“our Company”are to Nature Wood Group Limited,the holding company incorporated in the BVI that will issue theADSs being offered in this offering;“our Forests”are to parcels of land in Peru with an aggregate area of approximately 615,333
85、hectares,of which our Groupowned the natural forest concessions and cutting rights for the exploitation of timber,as at June 30,2023 “our Group”,“the Group”,“we”,“us”and“our”are to our Company and its subsidiaries;where the discussions in thecontext relate to business operations and/or financial per
86、formance,then the terms“Company,”“we,”“us,”“our,”“ourCompany,”“our Group”,“the Group”and“our business”refer to the business operations and/or financial performance ofthe Operating Subsidiaries;“our Director(s)”are to the director(s)of our Company;“PEFC”are to Programme for the Endorsement of Forest
87、Certification;“PRC”or“China”are to the Peoples Republic of China,excluding Hong Kong,Macau and Taiwan for the purposes ofthis prospectus only;“RMB”or“Renminbi”are to the legal currency of China;“sawn timber”are to square timber and commercial materials;“$”,“USD”,“US$”or“U.S.dollars”are to the legal
88、currency of the United States;“HKD”or“HK$”are to the legal currency of Hong Kong;“EUR”are to the legal currency of the European Union;“MOP”are to the legal currency of Macau;“SOL”or“S/”are to the legal currency of Peru.We have made rounding adjustments to some of the figures included in this prospec
89、tus.Accordingly,numerical figures shownas totals in some tables may not be an arithmetic aggregation of the figures that preceded them.Unless the context indicates otherwise,all information in this prospectus assumes no exercise by the underwriters of theirover-allotment option or the outstanding op
90、tions.The functional currency of our entities located in Hong Kong and the European Union is EUR,the functional currency of ourentities located in Macau is HKD,the functional currency of our entities located in the PRC is RMB and the functional currency ofour entities located in Peru is USD.Our cons
91、olidated financial statements are presented in USD.We use USD as reportingcurrency in our consolidated financial statements and in this prospectus.Assets and liabilities are translated at the exchange rateson the balance sheet date,equity amounts are translated at historical exchange rates,and reven
92、ues,expenses,gains and losses aretranslated using the average rate for the period.Gains or losses resulting from foreign currency transactions are included in theaccompanying consolidated statement of income and other comprehensive income.Translations of balances in the consolidated balance sheets,c
93、onsolidated statements of income and consolidated statements ofcash flows from EUR,HKD and RMB into USD as of and for the year ended December 31,2022 are solely for the convenience ofthe reader and were calculated at the rate of EUR 1.000 to USD 1.066,HKD 1.000 to USD 0.128 and RMB 1.000 to USD 0.14
94、4,respectively.No representation is made that the EUR,HKD and RMB amounts represent or could have been,or could be,converted,realized or settled into USD at that rate,or at any other rate.ii PROSPECTUS SUMMARY The following summary highlights information contained elsewhere in this prospectus and do
95、es not contain all of theinformation you should consider before investing in our ADSs.You should read the entire prospectus carefully,including“RiskFactors,”“Managements Discussion and Analysis of Financial Condition and Results of Operations,”and our consolidatedfinancial statements and the related
96、 notes thereto,in each case included in this prospectus.You should carefully consider,amongother things,the matters discussed in the section of this prospectus titled“Business”before making an investment decision.Overview We are a global leading vertically-integrated forestry company headquartered i
97、n Macau that focuses on FSC businessoperations.Our operations cover both up-stream forest management and harvesting,and down-stream wood-processing anddistribution.We offer a broad line of products,including logs,decking,flooring,sawn timber,recycled charcoal,synthesizedcharcoal,machine-made charcoa
98、l and essential oils,primarily through our sales network in Europe,South Asia,South America,North America and China.According to the Frost&Sullivan Report,we are(i)the second largest wood products export supplier;(ii)the second largest wood products export supplier certified by the FSC;and(iii)the l
99、argest decking product supplier,in Peru interms of export value in 2021.We are also the largest oak export supplier and the second largest hardwood export supplier,inFrance in terms of export volume in 2021 according to the Frost&Sullivan Report.Our Group owns concession rights of forests in Peru wh
100、ich covered an area of approximately 615,333 hectares as of June 30,2023.As of June 30,2023,approximately 13.67%and 1.66%of our Forests are covered by Cumaru and Estoraque,respectively.Cumaru and Estoraque are valuable hardwood timber which produce strong and durable wood that are well suited for hi
101、gh valuemarkets.In particular,Cumaru is commonly used for producing flooring,decking and other construction materials,whileEstoraque is commonly used for producing flooring and furniture.To ensure the sustainability of our forest resources,we establish a set of harvesting rules and operating standar
102、ds.For instance,we typically only harvest timber meeting the minimum stem circumference requirements.Our standard of forestry operations wasrecognized by the FSC,an independent accreditation body that is dedicated to promoting responsible and sustainable forestmanagement.According to the Frost&Sulli
103、van Report,we are one of the few forestry companies that have successfully implemented FSC-certified operations,including forest management,harvesting and manufacturing of wood products.We commenced our FSCbusiness operations in 2016,when Grupo Maderero Amaz S.A.C.,a subsidiary of our Group,first ob
104、tained FSC Chain of Custody(CoC)certification and began to sell FSC-certified products.As at the date of this prospectus,five subsidiaries of our Group(including Choi Chon Investment Company Limited,E&T Forestal S.A.C.,Grupo Maderero Amaz S.A.C.,Nuevo San MartinS.A.C.and Latinoamerican Forest S.A.C)
105、have obtained FSC CoC certifications.We also have built a professional forestmanagement team to implement FSC forest management.Our forest management team is led by our head of forest engineer who isqualified to carry out FSC forest management and the key members of our team have an average of over
106、8 years of experience inFSC forest management.According to the Frost&Sullivan Report,FSC-certified products can be sold at a premium of around 5%to 15%over non-FSC-certified products.With the growing public concern about environmental protection,consumers are more willing to pay a premium to buy“gre
107、en”products that are certified by reputable accreditation bodies or ecolabel organizations.As such,products certified by theFSC,one of the worlds most trusted accreditation body,have received wide acceptance across the world,especially the UnitedStates and Europe.Revenue generated from sales of FSC-
108、certified products increased by 162.8%from approximately$3.7 millionfor the year ended December 31,2020 to approximately$9.9 million for the year ended December 31,2021,which furtherincreased by 13.7%to approximately$11.2 million for the year ended December 31,2022,which accounted for approximately1
109、0.0%,20.7%and 20.3%of our revenue of the respective periods.We believe that such growing trend will continue in the future.Some of the logs we harvested will be sold to customers immediately after harvesting,others will be processed into a widevariety of products,such as decking and flooring,in our
110、wood processing facilities.As at the date of this prospectus,our Groupowns two facilities in Peru,and the Peru base has a monthly log processing capacity of more than 6,000 m3 and a monthly exportvolume of up to 65 containers(approximately 1,560 m3).To further capture the benefit of vertical integra
111、tion of our manufacturing operation and to secure a stable supply of our woodmaterials,we sourced logs and semi-finished air-dried planks from local forest owners in Peru,and flooring and decking throughsourcing from Gabon.In addition,we source logs through timber auctions or local forest owners in
112、France.To secure a stablesupply of logs,our forest management team would assist forest owners in Peru and France with forest management and harvestplanning.Similar to logs harvested from our Forests,logs we procured from third parties are either sold directly to customers orfurther processed in our
113、processing facilities.We perform the manufacturing process for certain of our products at our Peru base and outsource part of the manufacturingprocess to third party manufacturers in Peru.We also provide original design manufacturer(ODM)services by combining our in-house product design and developme
114、nt expertise with our ODM partners.For the years ended December 31,2022,2021 and 2020approximately 18.4%,18.2%and 20.8%of our revenue from our products was generated from our ODM business respectively.For the years ended December 31,2022,2021 and 2020,we generated revenue of approximately$55.3 milli
115、on,$47.7 millionand$37.5 million,respectively.Revenue from sales of logs,flooring and decking and sawn timber accounted for 50.2%,21.7%,24.9%and 3.2%of our total revenue for the year ended December 31,2022 respectively,accounted for 44.4%,25.0%,25.2%and5.4%of our total revenue for the year ended Dec
116、ember 31,2021 respectively,and accounted for 43.9%,34.4%,17.5%and 4.2%ofour total revenue for the year ended December 31,2020 respectively.Competitive Strengths We believe the following competitive strengths differentiate us from our competitors:large,sustainable and high quality forest resources ba
117、se;sustainable,socially responsible and environmentally friendly FSC-certified forest management system;our vertically-integrated business model enables us to achieve operational efficiency and better quality control;light-asset FSC business operations;and experienced management team with extensive
118、industry knowledge.Our Strategies We intend to pursue the following strategies to further expand our business:acquisitions of concession rights;selectively pursue strategic cooperation with local forest owners in South American countries;and further optimize our product offering and increase our mar
119、ket share;and proposed trading of carbon credits.Our Corporate History With more than 15 years of experience in forest land operation,our Group has become a diversified enterprise integrating theproduction and sales of a range of wood products,including logs,decking,flooring,sawn timber,recycled cha
120、rcoal,synthesizedcharcoal,machine-made charcoal and essential oils.Our Group has a supply chain throughout South America,Africa and Europe,owning natural forest concessions and cutting rights for the exploitation of timbers of forests in Peru which covered an area ofapproximately 615,333 hectares an
121、d two wood processing facilities in Peru as of June 30,2023.Among them,our Peru base wasestablished in 2016 and has 300 employees as of June 30,2023,with monthly log processing capacity of more than 6,000 m3 andmonthly export volume of up to 65 containers(approximately 1,560 m3).With Mr.Hok Pan Se b
122、ecoming our principal shareholder in June 2016,he pursued his vision of developing our Group into avertically-integrated forestry company by acquiring more new forests with a view to reducing the impact of our business frommarket fluctuations on raw materials.In January 2017,we acquired our first wo
123、od processing facility in Peru and expanded our product category and started sellingdecking which are ready-to-use products directly sold to end customers,as compared to our flooring products sold before 2017which required reprocessing before they can be used.In June 2020,we acquired a second wood p
124、rocessing facility in Peru with equipment and hardware located in the largestdistribution area of wood products in Peru,which contributed substantial growth of our business.To better utilize the biologicalresources of our Forests,we introduced essential oils as our new product in November 2020 which
125、 are refined from the timber inour Forests and commenced the production and export of essential oils to our customers.1 Our Corporate Structure The following diagram illustrates our corporate structure as of the date of this prospectus and after giving effect to thisoffering(assuming the underwriter
126、s do not exercise the over-allotment options).All of the entities held by our Group below are direct or indirect subsidiaries of our Company.Notes:1.South American Wood S.A.C.is held 99%by Peru Forestry Investments Co.and 1%by Peruvian Forestry Investments Co.,Limited.2.Grupo Maderero Amaz S.A.C.is
127、held 96.95%by Peru Forestry Investments Co.and 3.05%by Peruvian Forestry InvestmentsCo.,Limited.3.E&T Forestal S.A.C.is held 25%by One Talent Enterprises Limited and 75%by Allied Kingdom Enterprises Limited.4.Nuevo San Martin S.A.C.is held 0.01%by One Talent Enterprises Limited and 99.99%by Allied K
128、ingdom EnterprisesLimited.5.Sepahua Tropical Forest S.A.C.is held 99.999%by One Talent Enterprises Limited and 0.001%by Allied KingdomEnterprises Limited.6.Maderera Industrial Isabelita S.A.C.is held 74.98%by Golden Vast Development Limited and 25.02%by Star MaxDevelopment Limited.7.Latinoamerican F
129、orest S.A.C.is held 75%by Golden Vast Development Limited and 25%by Star Max Development Limited.8.Inversiones H.S.T.S.A.C.is held 99.999%by Saavedra Forest S.A.C.and 0.001%by Maderera Industrial Isabelita S.A.C.9.Forestal Tuesta S.A.C.is held 99%by Saavedra Forest S.A.C.and 1%by Maderera Industrial
130、 Isabelita S.A.C.10.Agro Forest A&J S.A.C.is held 99%by Saavedra Forest S.A.C.and 1%by Maderera Industrial Isabelita S.A.C.Transfers of Cash to and from our Subsidiaries Our Company is permitted under the laws of BVI to provide funding to our subsidiaries through loans or capital contributionswithou
131、t restrictions on the amount of the funds.Our non-PRC subsidiaries are permitted under the laws of their respectivejurisdictions to provide funding to our Company through dividend distribution without restrictions on the amount of the funds.The PRC has currency and capital transfer regulations that
132、require us to comply with certain requirements for the movementof capital.To utilize the expected proceeds from this offering,we may make additional capital contributions to our PRC subsidiaryor make loans to our PRC subsidiary.Our PRC subsidiary has not transferred and do not intend to transfer any
133、 earnings or cash toour Company.Nevertheless,as a result of PRC laws and regulations(noted below)that require annual appropriations of 10%ofafter-tax income to be set aside in a general reserve fund prior to payment of dividends,our PRC subsidiary is restricted in thatrespect,as well as in other res
134、pects noted below,in their ability to transfer a portion of their net assets to our Company as adividend.We currently intend to retain all available funds and future earnings,if any,for the operation and expansion of our business butwe may declare or pay dividends in the future.Any future determinat
135、ion related to our dividend policy will be made at thediscretion of our board of directors after considering our financial condition,results of operations,capital requirements,contractualrequirements,business prospects and other factors the board of directors deems relevant,and subject to the restri
136、ctions containedin any future financing instruments.Subject to the BVI Business Companies Act and our memorandum and articles of association,our board of directors mayauthorize and declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied,onreasona
137、ble grounds,that immediately before or following the dividend the value of our assets will exceed our liabilities and wewill be able to pay our debts as they become due,and the value of assets of our Company will not be less than the sum of our totalliabilities.There is no further BVI statutory rest
138、riction on the amount of funds which may be distributed by us by dividend.2 Pursuant to Article 119 bis 2 of the Code Gnral des Impts,dividends distributed by corporations which have theirregistered office in France to non-French tax residents(individuals or legal entities),are subject to withholdin
139、g tax in France.See“Material Income Tax Considerations Taxation in France Profit distribution and withholding tax”for more information.Save as disclosed in the paragraph headed“Regulation-Overview of the Laws and Regulations Relating to Our Business andOperations in China-Regulations Related to Fore
140、ign Exchange”,for our Company and our subsidiaries located outside China,there is no restrictions on foreign exchange for such entities and they are able to transfer cash among these entities,across bordersand to U.S.investors without any restriction.Also,there is no restrictions and limitations on
141、the abilities of non-PRC subsidiary todistribute earnings from their businesses,including from subsidiaries to the parent company or from the holding company to theU.S.investors as well as the abilities to settle amounts owed.For the years ended December 31,2022,2021 and 2020 and up to the date of t
142、his prospectus,we did not declare or pay anydividends.If we determine to pay dividends on any of our ADSs in the future,as a holding company,we will be dependent onreceipt of funds from our subsidiaries by way of dividend payments.See“Dividend Policy”,“Risk Factors We rely on dividends and other dis
143、tributions on equity paid by our subsidiaries tofund any cash and financing requirements we may have,and any limitation on the ability of our subsidiaries to make payments tous could have a material adverse effect on our ability to conduct our business.”Summary Consolidated Financial Data andConsoli
144、dated Statements of Change in Shareholders Equity in the Report of Independent Registered Public Accounting Firm formore information.Risks Related to Our Business and Industry(beginning on page 11 of this prospectus)Our business is subject to a number of risks,including risks that may prevent us fro
145、m achieving our business objectives ormay materially and adversely affect our business,financial condition,results of operations,cash flows and prospects that youshould consider before making a decision to invest in our ADSs.These risks are discussed more fully in“Risk Factors”set out inpage 11 to p
146、age 29.These risks include,but are not limited to,the following:Our revenues are sensitive to fluctuations of log price and selling price of our products in the forestry industry.We may face increased costs for new forest acquisitions.Our Forests are subject to environmental regulations in Peru and
147、France.We are dependent on the availability of large numbers of workers to perform manual labor.Our Forests may not grow in accordance with our expectations.Our forest survey and knowledge of our Forests are subject to errors in the survey.Our inability to obtain logging permits with sufficient logg
148、ing amounts could reduce our future revenues.Our inability to obtain certificates from the FSC could reduce our future revenues.Our inability to acquire enough immediately harvestable forests may affect our ability to meet demand.Social conflicts may disrupt our operations.We are heavily dependent o
149、n key personnel and consultants.The forestry industry faces competition from solid wood substitutes.Abnormally high or prolonged levels of rain at our Forests may adversely impact our ability to harvest timber.We are subject to certain risks relating to the delivery of our products.Disruption to the
150、 supply of raw materials or increase in raw material prices could materially and adversely affect ourGroups business,financial condition and results of operations.3 Risks Related to Our Corporate Structure(beginning on page 14 of this prospectus)We rely on dividends and other distributions on equity
151、 paid by our subsidiaries to fund any cash and financingrequirements we may have,and any limitation on the ability of our subsidiaries to make payments to us could have amaterial adverse effect on our ability to conduct our business.Risks Related to Doing Business in China(beginning on page 15 of th
152、is prospectus)Due to the long arm provisions under the current PRC laws and regulations,if Chinese government exercises anysignificant oversight and discretion over the conduct of our business and intervenes in or influences our operations at anytime our operations and/or the value of our ADSs could
153、 be affected.The policies,regulations,rules,and the enforcementof laws of the Chinese government may also be changed or amended and our assertions and beliefs of the risk imposed bythe PRC legal and regulatory system could be uncertain.The enactment of the Law of the PRC on Safeguarding National Sec
154、urity in the Hong Kong Special AdministrativeRegion could impact our Hong Kong subsidiaries.A downturn in Hong Kong,China or the global economy,and the economic and political policies of China couldmaterially and adversely affect our business and financial condition.The Hong Kong legal system embodi
155、es uncertainties which could limit the legal protections available to our Company.Changes in international trade policies,trade disputes,barriers to trade,or the emergence of a trade war may dampengrowth in China and other markets where the majority of our clients reside.Fluctuations in exchange rat
156、es could have a material and adverse effect on our results of operations and the value of yourinvestment.Risks Related to our ADSs(beginning on page 22 of this prospectus)There has been no public market for our ADSs prior to this offering,and you may not be able to resell our Shares at orabove the p
157、rice you pay for them,or at all.We will incur increased costs as a result of being a public company,particularly after we cease to qualify as an“emerginggrowth company.”Recent joint statements by the SEC and PCAOB,proposed rule changes submitted by Nasdaq,and the Holding ForeignCompanies Accountable
158、 Act all call for additional and more stringent criteria to be applied to emerging market companiesupon assessing the qualification of their auditors,especially the non-U.S.auditors who are not inspected by the PCAOB.These developments could add uncertainties to our offering.If we fail to meet appli
159、cable listing requirements,Nasdaq may delist our ADSs from trading,in which case the liquidityand market price of our ADSs could decline.Volatility in our ADSs price may subject us to securities litigation.The price and the trading volume of our ADSs may be volatile which could result in substantial
160、 losses for investorspurchasing our Shares under this offering.We may not pay any dividends on the ADSs.4 Regulatory Permission We are currently not required to obtain approval from PRC authorities to list on U.S.exchanges,however,if our subsidiariesor the holding company were required to obtain app
161、roval in the future and were denied permission from Chinese authorities to liston U.S.exchanges,we will not be able to continue listing on a U.S.exchange,which would materially affect the interest of theinvestors.It is uncertain when and whether our Company will be required to obtain permission from
162、 the PRC government to list onU.S.exchanges in the future,and when such permission is obtained,whether it will be rescinded.Although our Company iscurrently not required to obtain permission from any of the PRC central or local government to list on U.S.exchanges and has notreceived any denial to li
163、st on a U.S.exchange,our operations could be adversely affected,directly or indirectly,by existing orfuture laws and regulations relating to its business or industry.If we are subsequently advised by any Chinese authorities thatpermission for this offering and/or listing on the Nasdaq Stock Market w
164、as required,we may not be able to obtain such permissionin a timely manner,if at all.If this risk occurs,our ability to offer securities to investors could be significantly limited orcompletely hindered and the ADSs currently being offered may substantially decline in value or become worthless.We ar
165、e an offshore holding company with some of our major operations conducted in Hong Kong and Macau.We do notintend to apply the proceeds of this offering to make loans to our PRC subsidiary,or make additional capital contributions to ourPRC subsidiary,or establish new PRC subsidiary and make capital c
166、ontributions to these new PRC subsidiaries,or acquireoffshore entities with business operations in China in an offshore transaction.Nevertheless,the aforementioned activities aresubject to PRC regulations and approvals or registration.For example,loans by us to our wholly owned PRC subsidiary to fin
167、anceits activities cannot exceed statutory limits and must be registered with the local counterpart of SAFE.If we decide to finance ourwholly owned PRC subsidiary by means of capital contributions,these capital contributions are subject to registration with theState Administration for Market Regulat
168、ion or its local branch,reporting of foreign investment information with the Ministry ofCommerce,or registration with other governmental authorities in China.In light of the various requirements imposed by PRCregulations on loans to and direct investment in PRC entities by offshore holding companies
169、,we cannot assure you that we will beable to complete the necessary government registrations or obtain the necessary government approvals on a timely basis,or at all,with respect to future loans to our PRC subsidiary or future capital contributions by us to our PRC subsidiary.For more details,see“Ri
170、sk Factors Risks Relating to Doing Business in China PRC regulation of loans to and direct investment in PRC entitiesby offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceedsof this offering to make loans or additional capital contr
171、ibutions to our PRC subsidiary,which could materially and adverselyaffect our liquidity and our ability to fund and expand our business.”Recently,the General Office of the Central Committee of the Communist Party of China and the General Office of the StateCouncil jointly issued the Opinions on Stri
172、ctly Cracking Down on Illegal Securities Activities,which were made available to thepublic on July 6,2021.The Opinions on Strictly Cracking Down on Illegal Securities Activities emphasized the need to strengthenthe administration over illegal securities activities,and the need to strengthen the supe
173、rvision over overseas listings by Chinesecompanies.Pursuant to the Opinions,Chinese regulators are required to accelerate rulemaking related to the overseas offering andlisting of securities,and update the existing laws and regulations related to data security,cross-border data flow,and managementof
174、 confidential information.Numerous regulations,guidelines and other measures are expected to be adopted under the umbrella ofor in addition to the Cybersecurity Law and Data Security Law.On February 17,2023,the China Securities Regulatory Commission(the“CSRC”)issued the Trial Administrative Measures
175、of Overseas Securities Offering and Listing by Domestic Companies(“Overseas Listing Measures”),which became effective onMarch 31,2023.The Overseas Listing Measures require that a PRC domestic enterprise seeking to issue and list its securitiesoverseas(“Overseas Offering and Listing”)shall complete t
176、he filing procedures and submit the relevant information to CSRC.An Overseas Offering and Listing includes direct and indirect issuance and listing.The recognition of overseas indirect issuanceand listing of PRC domestic enterprises shall follow the principle of substance over form.If the issuer mee
177、ts both of the followingcircumstances,it shall be deemed an overseas indirect issuance and listing:(1)50%or more of the issuers operating revenue,totalprofit,total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting yearis accounted for
178、by domestic companies;and;and(2)the main parts of the issuers business activities are conducted in the ChineseMainland,or its main places of business are located in the Chinese Mainland,or the senior managers in charge of its businessoperation and management are mostly Chinese citizens or domiciled
179、in the Chinese mainland.We understand that the Overseas Listing Measures apply to overseas offerings and listings of companies mainly operating inChina,which is not the case for us.Legally,Macau,as a special administrative region of China,exercises a high degree ofautonomy and enjoys executive,legis
180、lative and independent judicial power,including that of final adjudication,authorized by theNational Peoples Congress of PRC,in accordance with the provisions of the Basic Law of the Macau.In accordance with PRClaws,our sole PRC subsidiary has been regarded and treated as a foreign-invested enterpri
181、se since its establishment.Consideringthat(i)the main parts of our companys business activities are conducted outside mainland China,the sole PRC subsidiary is notinvolved in the major part of the Company s operations,and we currently do not intend to conduct any major part of ouroperations through
182、it,(ii)our principal executive office is located in Macau,and(iii)most of our senior managers responsible forbusiness operations and management are permanent residents of Peru,France,Hong Kong,Macau and the PRC or their habitualresidence is located in Peru,France,Hong Kong,Macau and the PRC,based on
183、 our understanding of the conditions of overseasindirect issuance and listing,we believe that this proposed offering will not be identified as an overseas indirect offering and listingof PRC domestic enterprises and that therefore we will not be required to file with the CSRC.However,there is uncert
184、ainty as to whether our Company will be required to obtain permission from or file with the PRCgovernment to list on a U.S.stock exchange in the future and the Chinese authorities may ultimately take a view contrary to orotherwise different from ours.If we are subsequently notified by any Chinese au
185、thorities that permission/filing for this offeringand/or listing on the Nasdaq Stock Market was required,we may not be able to obtain such permission or complete such filing in atimely manner,if at all.Any failure to obtain such permission or complete such filing in a timely manner may restrict our
186、ability tocomplete the proposed offering or any future equity capital raising activities and may subject us or relevant persons to certainpenalties(See“RegulationsRegulations Related to Securities Offering and Listing Overseas”for details),which would have amaterial adverse effect on our business an
187、d financial position.However,as the Overseas Listing Measures was recentlypromulgated,there remain substantial uncertainties as to its interpretation,application and enforcement and how it may impact ourability to complete this offering or to raise or utilize fund.5 On December 28,2021,the Cyberspac
188、e Administration of China(the“CAC”)jointly with the relevant authorities formallypublished Measures for Cybersecurity Review(2021)which took effect on February 15,2022 and replace the former Measures forCybersecurity Review(2020).Measures for Cybersecurity Review(2021)stipulates that operators of cr
189、itical informationinfrastructure purchasing network products and services,and online platform operator(together with the operators of criticalinformation infrastructure,the“Operators”)carrying out data processing activities that affect or may affect national security,shallconduct a cybersecurity rev
190、iew,any online platform operator who controls more than one million users personal information mustgo through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country.On July 7,2022,the CAC released the Measures for the Security Assessment of Cross-Bord
191、er Data,which becomes effective on September 1,2022.According to the Measures for the Security Assessment of Cross-Border Data,where a data processor provides data abroad underany of the following circumstances,it shall apply for exit security assessment of data to the national cyberspace administra
192、tionthrough the local provincial cyberspace administration:(1)the data processor provides important data abroad;(2)the operators ofkey information infrastructure and data processors that process the personal information of more than 1 million people providepersonal information abroad;(3)data process
193、ors who have provided 100,000 personal information or 10,000 sensitive personalinformation abroad in aggregate since January 1 of last year provide personal information abroad;and(4)other situations requiredfor security assessment as stipulated by the state cyberspace administration.Given that:(i)we
194、 are not operators of key informationinfrastructure;(ii)we do not possess personal information on more than one million users in our business operations;(iii)we donot provide overseas personal information of more than 100,000 individuals or any sensitive personal information of more than10,000 indiv
195、iduals in aggregate since January 1 of the previous year;and(iv)data processed in our business does not have abearing on national security,economy operation,social stability or public health and security and thus may not be classified as coreor important or significant data by the authorities,we wou
196、ld not be required to apply for a cybersecurity review or a cross-borderdata assessment under such Measures.However,if the CSRC,CAC or other regulatory agencies later promulgate new rules or explanations requiring that we obtaintheir approvals for this offering and any follow-on offering,we may be u
197、nable to obtain such approvals and we may face sanctionsby the CSRC,CAC or other PRC regulatory agencies for failure to seek their approval which could significantly limit orcompletely hinder our ability to offer or continue to offer securities to our investors and the ADSs currently being offered m
198、aysubstantially decline in value and be worthless.For more details,see“Risk Factors Risks Related to Doing Business in China If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/orforeign investment in China-based issuers,such action ma
199、y significantly limit or completely hinder our ability to offer or continueto offer ADSs to investors and cause the value of our ADSs to significantly decline or be worthless.”PCAOB Developments Our ADSs may be prohibited from trading on a national exchange under the HFCA Act(as amended by the Accel
200、eratingHolding Foreign Companies Accountable Act,which was enacted on December 29,2022)if the PCAOB is unable to inspect ourauditors for two consecutive years.The delisting of our ADSs,or the threat of their being delisted,may materially and adverselyaffect the value of your investment.Our auditor,W
201、WC,P.C.the independent registered public accounting firm that issues the audit report included elsewhere inthis prospectus,as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB,issubject to laws in the United States pursuant to which the PCAOB
202、conducts regular inspections to assess our auditors compliancewith the applicable professional standards.Our auditor has been inspected by the PCAOB on a regular basis,with the lastinspection in December 2021.On December 16,2021,the PCAOB issued a report on its determinations that it was unable to i
203、nspect or investigatecompletely PCAOB-registered public accounting firms headquartered in Mainland China and in Hong Kong,because of positionstaken by PRC authorities in those jurisdictions,which determinations were vacated on December 15,2022.The PCAOB made itsdeterminations pursuant to PCAOB Rule
204、6100,which provides a framework for how the PCAOB fulfills its responsibilities underthe HFCA Act,which determinations were vacated on December 15,2022.The report further listed in its Appendix A andAppendix B,the Registered Public Accounting Firms Subject to the Mainland China Determination and Reg
205、istered PublicAccounting Firms Subject to the Hong Kong Determination,respectively,which determinations were vacated on December 15,2022.Our auditor,WWC,P.C.is headquartered in the United States,and did not appear as part of the report and was not listedunder its Appendix A or Appendix B.On August 2
206、6,2022,the PCAOB signed SOP Agreements with the China Securities Regulatory Commission(the“CSRC”)and Chinas Ministry of Finance.The SOP Agreements established a specific,accountable framework to make possible completeinspections and investigations by the PCAOB of audit firms based in mainland China
207、and Hong Kong,as required under U.S.law.On December 15,2022,the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022.The PCAOB vacated itsprevious 2021 determina
208、tions that the PCAOB was unable to inspect or investigate completely registered public accounting firmsheadquartered in mainland China and Hong Kong.However,whether the PCAOB will continue to be able to satisfactorily conductinspections of PCAOB-registered public accounting firms headquartered in ma
209、inland China and Hong Kong is subject touncertainty and depends on a number of factors out of our,and our auditors control.However,if the PCAOB continues to beprohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainlandChina and Hong Kong
210、,the PCAOB is likely to determine by the end of 2023 that positions taken by authorities in the PRCobstructed its ability to inspect and investigate registered public accounting firms in mainland China and Hong Kong completely,then the companies audited by those registered public accounting firms wo
211、uld be subject to a trading prohibition on U.S.marketspursuant to the HFCA Act.For more detailed information,see“Risk Factors Risks Related to Doing Business in China Although the audit reportincluded in this prospectus is prepared by U.S.auditors who are currently inspected by the PCAOB,there is no
212、 guarantee thatfuture audit reports will be prepared by auditors inspected by the PCAOB and,as such,in the future investors may be deprived ofthe benefits of such inspection.Furthermore,trading in our ADSs may be prohibited under the HFCA Act if the SEC subsequentlydetermines our audit work is perfo
213、rmed by auditors that the PCAOB is unable to inspect or investigate completely,and as a result,U.S.national securities exchanges,such as the Nasdaq,may determine to delist our securities.Furthermore,on December 29,2022the Accelerating Holding Foreign Companies Accountable Act was enacted,which amend
214、ed the HFCA Act and requires the SECto prohibit an issuers securities from trading on any U.S.stock exchanges if its auditor is not subject to PCAOB inspections fortwo consecutive years instead of three,and thus reducing the time before our ADSs may be prohibited from trading or delisted.”6 Implicat
215、ions of Being an Emerging Growth Company and a Foreign Private Issuer As a company with less than$1.235 billion in revenue during our last fiscal year,we qualify as an“emerging growthcompany”as defined in the Jumpstart Our Business Startups Act,or JOBS Act,enacted in April 2012,and may take advantag
216、e ofreduced reporting requirements that are otherwise applicable to public companies.These provisions include,but are not limited to:being permitted to present only two years of audited financial statements and only two years of related ManagementsDiscussion and Analysis of Financial Condition and R
217、esults of Operations in our filings with the SEC;not being required to comply with the auditor attestation requirements in the assessment of our internal control overfinancial reporting;reduced disclosure obligations regarding executive compensation in periodic reports,proxy statements and registrat
218、ionstatements;and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholderapproval of any golden parachute payments not previously approved.We may take advantage of these provisions until the last day of our fiscal year following the fifth anni
219、versary of the date of thefirst sale of our ADSs pursuant to this offering.However,if certain events occur before the end of such five-year period,includingif we become a“large accelerated filer”,our annual gross revenues exceed$1.235 billion or we issue more than$1.0 billion ofnon-convertible debt
220、in any three-year period,we will cease to be an emerging growth company before the end of such five-yearperiod.In addition,Section 107 of the JOBS Act provides that an“emerging growth company”can take advantage of the extendedtransition period provided in Section 7(a)(2)(B)of the Securities Act of 1
221、933,as amended,or the Securities Act,for complyingwith new or revised accounting standards.We have elected to take advantage of the extended transition period for complying withnew or revised accounting standards and acknowledge such election is irrevocable pursuant to Section 107 of the JOBS Act.We
222、 are a“foreign private issuer,”as defined by the SEC.As a result,in accordance with the rules and regulations of TheNasdaq Stock Market LLC,or Nasdaq,we may comply with home country governance requirements and certain exemptionsthereunder rather than complying with Nasdaq corporate governance standa
223、rds.We may choose to take advantage of the followingexemptions afforded to foreign private issuers:Exemption from filing quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significantevents within four(4)days of their occurrence.Exemption from Section 16 rules regarding
224、 sales of ADSs by insiders,which will provide less data in this regard thanshareholders of U.S.companies that are subject to the Exchange Act.Exemption from the Nasdaq rules applicable to domestic issuers requiring disclosure within four(4)business days of anydetermination to grant a waiver of the c
225、ode of business conduct and ethics to directors and officers.Although we willrequire board approval of any such waiver,we may choose not to disclose the waiver in the manner set forth in theNasdaq rules,as permitted by the foreign private issuer exemption.Exemption from the requirement that our boar
226、d of directors have a compensation committee that is composed entirely ofindependent directors with a written charter addressing the committees purpose and responsibilities.Exemption from the requirements that director nominees are selected,or recommended for selection by our board ofdirectors,eithe
227、r by(i)independent directors constituting a majority of our board of directors independent directors in avote in which only independent directors participate,or(ii)a committee comprised solely of independent directors,andthat a formal written charter or board resolution,as applicable,addressing the
228、nominations process is adopted.7 Furthermore,Nasdaq Rule 5615(a)(3)provides that a foreign private issuer,such as us,may rely on our home countrycorporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d),provided that wenevertheless comply with Nas
229、daqs Notification of Noncompliance requirement(Rule 5625),the Voting Rights requirement(Rule5640)and that we have an audit committee that satisfies Rule 5605(c)(3),consisting of committee members that meet theindependence requirements of Rule 5605(c)(2)(A)(ii).If we rely on our home country corporat
230、e governance practices in lieu ofcertain of the rules of Nasdaq,our shareholders may not have the same protections afforded to shareholders of companies that aresubject to all of the corporate governance requirements of Nasdaq.If we choose to do so,we may utilize these exemptions for aslong as we co
231、ntinue to qualify as a foreign private issuer.Although we are permitted to follow certain corporate governance rules that conform to the BVI requirements in lieu of manyof the Nasdaq corporate governance rules,we intend to comply with the Nasdaq corporate governance rules applicable to foreignprivat
232、e issuers.Implication of Being a Controlled Company We are and will continue,following this offering,to be a“controlled company”within the meaning of the Nasdaq StockMarket Rules and,as a result,may rely on exemptions from certain corporate governance requirements that provide protection tosharehold
233、ers of other companies.We are,and will remain,a“controlled company”as defined under the Nasdaq Stock Market Rules.As at the date of thisprospectus,approximately 86.3%of the issued share capital of the Company is owned by Easy Bliss Limited,which in turn isowned approximately 60.2%by Mr.Hok Pan Se,ou
234、r Director.Mr.Hok Pan Se therefore beneficially owns approximately 51.9%of our total voting power as at the date of this prospectus.Following completion of this offering,approximately 80.6%of theissued share capital of the Company will be owned by Easy Bliss Limited and Mr.Hok Pan Se will in turn be
235、neficially ownapproximately 48.6%of our total voting power.Following completion of this offering and assuming full conversion of theoutstanding convertible bonds of the Company,approximately 68.2%of the issued share capital of the Company will be owned byEasy Bliss Limited and Mr.Hok Pan Se will in
236、turn beneficially own approximately 42.7%of our total voting power.For so longas we are a controlled company,we are permitted to elect not to comply with certain stock exchange rules regarding corporategovernance,including the following requirements:that a majority of its board of directors consist
237、of independent directors;that its director nominees be selected or recommended for the boards selection by a majority of the boards independentdirectors in a vote in which only independent directors participate or by a nominating committee comprised solely ofindependent directors,in either case,with
238、 a formal written charter or board resolutions,as applicable,addressing thenominations process and such related matters as may be required under the federal securities laws;and that its compensation committee be composed solely of independent directors with a written charter addressing thecommittees
239、 purpose and responsibilities.As a result,you will not have the same protection afforded to shareholders of companies that are subject to these corporategovernance requirements.Although we do not intend to rely on the“controlled company”exemption under the Nasdaq listing rules,we could elect torely
240、on this exemption after we complete this offering.If we elect to rely on the“controlled company”exemption,a majority of themembers of our board of directors might not be independent directors and our nominating and corporate governance andcompensation committees might not consist entirely of indepen
241、dent directors after we complete this offering.See“Risk Factors Risks Related to Our ADSs We will be a“controlled company”within the meaning of Nasdaq rules and we will qualify for andmay rely on exemptions from certain corporate governance requirements.”8 Impact of COVID-19 The ongoing outbreak of
242、a novel strain of coronavirus(“COVID-19”)has resulted in quarantines,travel restrictions,and thetemporary closure of stores and business facilities globally for the past years.In March 2020,the World Health Organizationdeclared COVID-19 as a pandemic.A recent outbreak of the Omicron variant of COVID
243、-19 worldwide also forced new orders ontemporary lockdown or social distancing in some countries or regions.Given the rapidly expanding nature of and the uncertaintysurrounding the COVID-19 pandemic,we believe there is a risk that our business,results of operations,and financial conditionwill be adv
244、ersely affected.Potential impact to our results of operations will also depend on future developments and newinformation that may emerge regarding the duration and severity of COVID-19 and the actions taken by government authoritiesand other entities to contain COVID-19 or mitigate its impact,almost
245、 all of which are beyond our control.In January 2020,the Chinese government issued a series of policies to prevent the spread of COVID-19.The Chinesegovernment has shown signs of relaxing its COVID-19 policies.For instance,the Chinese government has eased the borderrestrictions by reopening certain
246、border crossing points between mainland China and Hong Kong to travelers since January 8,2023.On March 15,2020,Peru announced a nationwide lockdown due to the pandemic,which was lifted in June of the same year.After that,various pandemic prevention measures have been introduced in various countries
247、and regions around the world.With regard to our production base in Peru,during the lockdown period,production in all of our factories was suspended foraround three months,many businesses ceased to operate and shops were closed,and all government departments(including,among others,the forestry bureau
248、 and tax bureau)did not work normally,which hindered our business operations in terms ofproduction,delivery as well as raw materials procurement.The pandemic and lockdown measures also raised concerns over healthand safety among the workers and led to changes in their mentality,which resulted in ins
249、tability in personnel and high turnoverrate,in turn affecting the normal work progress in our production base.Furthermore,the resulting inflation,which significantlyraised diesel prices,electricity fees as well as employee base salary,had an impact on our costs of operation.To mitigate theinflationa
250、ry pressures,we have adjusted prices to our customers to reflect changes in our operating costs.Other control measuresimposed as a response to the pandemic also led to delay in the development of various parts of the forests,resulting in a period ofsupply shortage and rising costs of raw materials f
251、or our business operations.With regard to our sales,COVID-19 related lockdown and other control measures imposed in other countries which form partof the overseas market for our products had and may continue to have an impact on our international exports.For instance,theChinese market will not be ab
252、le to receive delivery of our products during the period of lockdown,and consumers demand forwooden floors will decline,which will significantly affect the quantity and price of flooring materials we sell in China.In addition,as the price of sea freight has increased by 300%as compared with that bef
253、ore the pandemic,this has led to higher overall costs forour customers.The shortage in supply of cargo containers,reduction in shipping frequency and longer shipping period have alsoaffected the shipment and delivery of our products to a certain extent.Additionally,the pandemic has resulted in the s
254、hutdown offactory production,rising costs,delays in transportation and delivery,and shortage in supply of raw materials,which raised theprice of wood products in the whole market.At the same time,due to the impact of the pandemic on the global economy,marketconsumption was weak,resulting in a backlo
255、g of goods,which in turn affected the number of orders placed by our customers.Because of the uncertainty surrounding the COVID-19 pandemic,business disruption and its financial impact related to theCOVID-19 pandemic cannot be reasonably estimated at this time.In the long term,this may have an adver
256、se impact on ourbusiness and financial performance.During the years ended December 31,2022,2021 and 2020,COVID-19 has had a limitedimpact on the Companys operations.However,it could impact economies and financial markets,resulting in an economicdownturn that could impact our ability to raise capital
257、 or slow down potential business opportunities.There are still uncertainties ofCOVID-19s future impact,and the extent of the impact will depend on a number of factors,including the duration and severity ofthe pandemic;and the macroeconomic impact of government measures to contain the spread of COVID
258、-19 and related governmentstimulus measures.We cannot assure you that financing will be available in amounts or on terms acceptable to us,if at all.Corporate Information Our principal executive office is located at Avenida da Amizade n.o1287,Chong Fok Centro Comercial,13 E Macau S.A.R.Our telephone
259、number is(+853)2855-3594.Our registered office in the BVI is located at 4th Floor,Waters Edgar BuildingMeridian Plaza,Road Town,Tortola,VG1110,British Virgin Islands.Our agent for service of process in the United States is Cogency Global Inc.,located at 122 East 42nd Street,18th Floor,NewYork,NY 101
260、68.Our website is located at www.nature-.Information contained on,or that can be accessed through,ourwebsite is not a part of,and shall not be incorporated by reference into,this prospectus.9 The Offering(1)ADSs being offered:915,000 ADSs on a firm commitment basis.Price per ADS:$10 per ADS(the midp
261、oint of the price range set forth on the coverpage of this prospectus).Number of Ordinary Shares outstanding before thisoffering:105,263,000 Number of ADSs outstanding after this offering:915,000 ADSs(or 1,052,250 ADSs if the underwriters exercise infull the option to purchase additional ADSs).Ordin
262、ary Shares Outstanding Immediately After ThisOffering 112,583,000 Ordinary Shares(or 113,681,000 Ordinary Shares if theunderwriters exercise in full the option to purchase additional ADSs).The ADSs Each ADS represents eight Ordinary Shares.The depositary will be the holder of the Ordinary Shares und
263、erlyingthe ADSs and you will have the rights of an ADS holder as providedin the deposit agreement among us,the depositary and all holdersand beneficial owners of ADSs thereunder.You may surrender your ADSs to the depositary to withdraw theOrdinary Shares underlying your ADSs.The depositary will char
264、geyou a fee for such an exchange.We and the depositary may amend or terminate the depositagreement for any reason without your consent.Any amendment thatimposes or increases fees or charges or which materially prejudicesany substantial existing right you have as an ADS holder will notbecome effectiv
265、e as to outstanding ADSs until 30 days after notice ofthe amendment is given to ADS holders.If an amendment becomeseffective,you will be bound by the deposit agreement as amended ifyou continue to hold your ADSs.To better understand the terms of the ADSs,you should carefullyread the section in this
266、prospectus entitled“Description of AmericanDepositary Shares.”We also encourage you to read the depositagreement,which is an exhibit to the registration statement thatincludes this prospectus.Option to purchase additional ADSs We have granted to the underwriters an option,exercisable for45 days from
267、 the date of this prospectus,to purchase up to anaggregate of 137,250 additional ADSs at the public offering price,less underwriting discounts.Use of proceeds:Based upon an initial public offering price of$10 per ADS(themidpoint of the price range set forth on the cover page of thisprospectus),we es
268、timate that we will receive net proceeds from thisoffering,after deducting the estimated underwriting discounts andthe estimated offering expenses payable by us,of approximately$6,769,184 if the underwriters do not exercise their over-allotmentoption,and$8,045,609 if the underwriters exercise their
269、over-allotment option in full,after deducting the underwriting discountsand estimated offering expenses payable by us.We plan to use the net proceeds of this offering as follows:Approximately 50%for acquisition of concession rights andforest-related business;Approximately 35%for acquisition of facto
270、ries in Europe orSouth America and development of new products;and The balance to fund working capital and for other generalcorporate purposes.For more information on the use of proceeds,see“Use of Proceeds”on page 43.Lock-up:We,all of our Directors,officers,shareholders and holders of ourconvertibl
271、e bonds and share options have agreed with theunderwriters,subject to certain exceptions,not to sell,transfer ordispose of,directly or indirectly,any of our ADSs,Ordinary Shares,or securities convertible into or exercisable or exchangeable for ourADSs for a period of 180 days from the date of this p
272、rospectus.See“Shares Eligible for Future Sale”and“Underwriting”for moreinformation.Listing We have applied to have our ADSs listed on the Nasdaq CapitalMarket.At this time,Nasdaq has not yet approved our application tolist our ADSs.The closing of this offering is conditioned uponNasdaqs final approv
273、al of our listing application,and there is noguarantee or assurance that our ADSs will be approved for listing onNasdaq.Proposed Nasdaq symbol:“NWGL”.Depositary The Bank of New York Mellon Risk factors:Investing in our ADSs is highly speculative and involves a highdegree of risk.As an investor you s
274、hould be able to bear a completeloss of your investment.You should carefully consider theinformation set forth in the“Risk Factors”section beginning on page11.Unless otherwise indicated,all information contained in this prospectus assumes no exercise of the underwriters over-allotment option or the
275、outstanding options and no conversion of the outstanding convertible bonds of the Company and is basedon 105,263,000 Ordinary Shares outstanding as of the date of this prospectus.10 RISK FACTORS An investment in our ADSs involves a high degree of risk.You should carefully consider the following info
276、rmation about theserisks,together with the other information appearing elsewhere in this prospectus,before deciding to invest in our ADSs.Theoccurrence of any of the following risks could have a material adverse effect on our business,financial condition,results ofoperations and future growth prospe
277、cts.In these circumstances,the market price of our ADSs could decline,and you may lose allor part of your investment.Risks Related to Our Business and Industry Our revenues are sensitive to fluctuations of log price and selling price of our products in the forestry industry.Historically,prices for l
278、ogs have been volatile and are affected by numerous factors that are not under control,includingdemand for wood and wood products,supply from illegal logging,changes in currency exchange rates,economic growth rates,foreign and domestic interest rates,trade policies,and prevailing fuel and transporta
279、tion costs.In addition,industry-wide increases in the supply of logs during a favorable price period can also lead to downward pressureon prices through oversupply.Increased production by us and our competitors could lead to oversupply and lower prices.Oversupply and lower prices may also result fro
280、m illegal logging activity or decreased government enforcement of loggingrestrictions.Our revenues and profits are extremely sensitive to changes in log prices and selling prices of our products.Slightchanges in log prices and selling prices of our products may cause a disproportionally large change
281、 in our revenues and our resultsof operation.If market prices for logs or our products were to decline,it could have a material adverse effect on our business,financial condition and results of operation.We may face increased costs for new forest acquisitions.As the forestry sector develops,sellers
282、may become increasingly sophisticated about the valuation and prices of their forestsand may demand higher premiums for high quality forests.There is no assurance that we will be able to negotiate favorably lowprices for our new forest acquisitions.Rising acquisition costs and intensifying competiti
283、on for new forests may hamper ourexpansion plans and have an adverse impact on the profitability and results of our operations.Our Forests are subject to environmental regulations in Peru and France.The operations of our forestry business in Peru and France are subject to a wide range of environment
284、al laws and regulations,which regulate,among other things,forestry activities,including harvesting,land clearing for forests and the emission,noise ordischarge of pollutants,effluents,or solid waste,water or atmosphere.Environmental laws and regulations have generally become more stringent in recent
285、 years and could become even morestringent in the future.We may be required to obtain certain licenses before we are permitted to occupy certain premises and/orcarry out certain activities.They also protect endangered or threatened wildlife species which may live in our Forests.Some ofthese environm
286、ental laws and regulations could impose significant costs,expenses,penalties,administrative measures,andliabilities on us for violations of existing conditions attached to our licenses or commitments of environmental impact assessments,whether or not we caused or knew about them.Violations of such l
287、aws and regulations may result in civil penalties(such as finesand recovery of costs),remediation expenses,potential injunctions and prohibition orders and criminal penalties.Someenvironmental statutes impose strict liability,rendering a person liable for environmental damage without regard to the p
288、ersonsnegligence or fault.Compliance with,or damages or penalties for violating,current and future environmental laws and regulations could result ina reduction in harvesting volume,suspension of our activities and may force us to incur significant expenses,which in turn couldhave a material adverse
289、 effect on our business,financial condition,and results of operations.Any tightening of the requirementsprescribed by environmental laws and regulations in Peru or France,or changes in the manner of interpretation or enforcement ofsuch existing laws or regulations,could adversely impact our operatio
290、ns by increasing our compliance costs and potentialliabilities in connection with such laws and regulations,including additional capital or operating expenditures,which may placeadditional demands on our liquidity and adversely affect our results of operations.11 We are dependent on the availability
291、 of large numbers of workers to perform manual labor.We rely on large numbers of workers to harvest logs and perform manual labor.As many of our Forests are located in remoteareas far from population centers,there is a risk that manpower for harvesting logs and for maintaining our Forests will not b
292、eavailable on a continuous basis due to factors such as rural-urban migration.We are also vulnerable to labor shortages due tostrikes,labor stoppages and civil unrest.Any shortage of labor could increase our costs and reduce our production,which mayhave a material adverse effect on our business,fina
293、ncial condition and results of operations.Our Forests may not grow in accordance with our expectations.The success of our business depends in part upon the productivity of our existing and future forests.Growth in forests dependson a number of factors,many of which are beyond our control.These inclu
294、de,but are not limited to,damage by fire,diseases,pests,environmental pollution,and other natural or man-made disasters,as well as weather,climate,genetic factors and soilconditions.Our ability to improve the growth speed of our Forests will depend on the factors described above as well as our abili
295、tyto improve our forest management practices.As a result,there can be no assurance that our Forest will grow as we expect.Ourfuture business,financial condition and results of operations may be adversely affected if our Forests grow at a slower rate than weexpect.Our forest survey and knowledge of o
296、ur Forests are subject to errors in the survey.Our operating results depend on our knowledge of forests,especially in Peru and France.We regularly visit our Forests tomonitor their growth and condition.In this process,we use a random sampling method for our survey of forests.We cannotguarantee the r
297、eliability of the results of our survey.In the event that the results of our survey are not reliable,our knowledge ofour Forests and our ability to manage our Forests could be greatly hampered,which may have a material adverse effect on ourbusiness,financial condition and results of operations.We de
298、pend on certain major customers.For each of the years ended December 31,2022,2021 and 2020,we had a total of 158,115 and 101 customers respectively,which had purchased our wood products.Our five largest customers during the respective periods accounted for approximately55.3%,55.1%and 49.9%of our tot
299、al turnover respectively;whilst our largest customer accounted for approximately 19.5%,22.6%and 28.0%of our total turnover respectively.We may face increased operating costs and staff costs.Our business may face increased operating costs as the forestry industry continues to develop.Our operating ex
300、penses forlogging activities consist of our costs of harvesting,such as labor costs,and costs associated with applying for logging permits forour Forests.We expect labor costs to rise as workers who harvest our logs become more experienced and increase their wagedemands.Logging permits for our Fores
301、ts are subject to periodic revisions by the local forest bureaus and we expect them toincrease as the industry develops.Increases in our operating expenses for logging activities and staff costs may have a materialadverse effect on our business,financial condition and results of operations.12 Our in
302、ability to obtain logging permits with sufficient logging amounts could reduce our future revenues.A logging permit setting out,among other things,the quota(in terms of the maximum area and/or number of trees)allowablefor logging and the period of logging must be obtained from the local forestry bur
303、eaus for harvesting in Peru.Because the availability of logging permits is subject to the approval of the relevant local forestry bureau,there is no assurancethat we will be able to continue obtaining logging permits,or that the logging amount given to us under the logging permits will besufficient
304、for our operations.Should we fail to obtain logging permits with logging amounts sufficient for our operations,ourrevenues in the future may be reduced and our business,financial condition and results of operations may be materially andadversely affected.Our inability to obtain certificates from the
305、 FSC could reduce our future revenues.During the years ended December 31,2022,2021 and 2020,revenue generated from FSC-certified decking amounted toapproximately$11.2 million,$9.9 million and$3.7 million,representing approximately 20.3%,20.7%and 10.0%of our totalrevenue.This,in turn,requires that we
306、 retain and renew our existing FSC Chain of Custody(CoC)certifications.Our retention andrenewal of these certificates depend on our performance in forest management.We cannot assure you that we will be able to retain or renew our existing certificates or obtain new certificates.If we areunable to re
307、new or retain certificates,our business,results of operations and financial condition will be materially and adverselyaffected.Our inability to acquire enough immediately harvestable forests may affect our ability to meet demand.As at June 30,2023,our Forests covered an area of approximately 615,333
308、 hectares.We rely on acquisitions of new forests toincrease our timber supply,particularly new forests which are immediately harvestable.There can be no assurance that we will beable to acquire sufficient immediately harvestable forests in the future to keep up with demand.If we cannot do so,our bus
309、iness,financial condition and results of operation may be materially adversely affected.The current global market fluctuations and economic downturn could materially and adversely affect our business,financialcondition and results of operations.The global capital and credit markets have been experie
310、ncing extreme volatility and disruption in recent times.Concerns overinflation or deflation,energy costs,geopolitical issues,and the availability and cost of credit have contributed to unprecedentedlevels of market volatility and diminished expectations for the global economy and the capital and con
311、sumer markets in the future.These factors,combined with volatile oil prices,declining business activities and consumer confidence and increasedunemployment,have precipitated an economic slowdown and a possible prolonged global recession.These events have led to aslowdown in the global economy which
312、a number of economists predict could be significant and protracted.As a result,thedemand for our wood products may significantly decrease,thereby materially and adversely affecting our business,financialcondition and results of operations.Social conflicts may disrupt our operations.Despite Perus ong
313、oing economic growth and stabilization,high levels of poverty and unemployment and social and politicaltensions continue to be pervasive problems in the country.Peru has,from time to time,experienced social and political turmoil,including riots,nationwide protests,strikes and street demonstrations.I
314、n the past,Peru has experienced periods of politicalinstability that has included a succession of regimes with differing economic policies and programs.Recently,since December2022,Peru has experienced unrelenting political turmoil.Part of our operations are conducted in Peru and depend on economic a
315、ndpolitical developments in the country.As a result,any social conflicts may disrupt our business operations,which could have amaterial adverse effect on our business and financial performance.We are heavily dependent on key personnel and consultants.We are heavily dependent on our Directors and man
316、agement for the success of our operations.Our ability to negotiatesuccessfully with the forest owners for our forest rights,and to acquire high quality forests,depends on the skills,relationships andreputation of our senior management.In particular,we rely on the management skills of our chairman,Mr
317、.Hok Pan Se,for ourbusiness across borders.We also rely on the expertise and experience of our forest management staff,procurement and inventorystaff,production staff,sales and marketing staff and consultants.If we lose the services of any of our key personnel and/or if we cannot attract or retain q
318、uality consultants to advise us,wemay lose our competitive advantage and our business could be adversely affected.13 We face competition from other companies in the forestry industry.We face many local and overseas competitors who also supply wood products to the market.Our primary competitors opera
319、teeither domestically or within the Asia Pacific region.In particular,we face competition from a host of small logging firms,some ofwhich may not comply with environmental and other industry standards to the same extent as we do,resulting in their potentiallylower operating costs.Competition in our
320、industry is influenced by factors including the costs of new forest acquisitions,regulatory compliance,andforest insurance.Some of our competitors may have lower costs than we do,or,if their operations are located in less developedcountries,may be subject to less stringent environmental and other go
321、vernmental regulations than we are,because of different orregional laws and business practices.If we are unable to compete effectively,or if competition increases in the future,our revenuescould decline,and there may be material adverse effects on our business,financial condition,results of operatio
322、ns and cash flows.The forestry industry faces competition from solid wood substitutes.In addition to competition within the forestry industry,the forest industry faces competition from solid wood substitutes.Weface competition from companies that manufacture wood substitutes,such as imitation wood,f
323、iber-cement wood,ceramic tile andother materials that are used as alternative materials mainly in construction and furniture production.The demand for woodproducts is also affected by changes in consumer trends and tastes.Preference for wood substitutes among manufacturers,construction companies and
324、 consumers could decrease demand for our products and have a material adverse effect on our revenue,financial condition and results of operations.Abnormally high or prolonged levels of rain at our Forest locations may adversely impact our ability to harvest timber.Our harvesting activity is dependen
325、t on,among other things,the weather conditions at our Forest locations.For safety reasons,we discontinue logging in our Forests during the rainy season,which is usually from late November to May.Abnormallyprolonged periods of rainfall or unusually intense rainfall will reduce the volume of logs we a
326、re able to extract,which may have amaterial adverse effect on our business,financial condition and results of operations and revenues.We are subject to certain risks relating to the delivery of our products.We often rely on third-party logistics service providers for the delivery of our wood product
327、s to customers.Such deliveryservices could be suspended and thus interrupt the supply of our wood products if unforeseen events occur which are beyond ourcontrol,such as transportation bottlenecks,natural disasters,disease outbreaks or labor strikes.Any failure of this personnel toprovide high-quali
328、ty or timely delivery to our customers may negatively impact the purchase experience of our customers,damageour reputation and cause us to lose customers.Any negative publicity or poor feedback regarding our customer service overall mayharm our brand and reputation and in turn cause us to lose custo
329、mers and market share.Disruption to the supply of raw materials or increase in raw material prices could materially and adversely affect our Groupsbusiness,financial condition and results of operations.The major raw materials used to produce our wood products are logs and floorings.The purchase of w
330、ood products and logstogether accounted for approximately 97.8%,93.9%and 95.1%of the total raw material purchase costs during the years endedDecember 31,2022,2021 and 2020 respectively.However,our Group has not entered into any long-term supply contracts with oursuppliers.In the event that the ban o
331、n commercial logging is imposed by the French government or the places where our suppliersare located or natural disasters,the supply of timber for the production of our wood products and the hosting of timber auctionsmay be affected.It is therefore possible that our Group will not be able to purcha
332、se sufficient raw materials from our suppliers,in atimely manner and on commercially acceptable terms,or at all.In addition,if we are unable to acquire raw materials from our existing suppliers for any reason,we cannot assure that ourGroup will be able to source the raw materials from alternative so
333、urces within a reasonable period of time,and at acceptable pricesor at all.Our Group cannot assure that such shortages will not occur in the future.Any failure to obtain adequate supplies of rawmaterials on a timely basis may disrupt our Groups operation,and may have a material adverse effect on the business,financialcondition and results of operations of our Group.Risks Related to Our Corporate S