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Origin Agritech LTD

Origin Agritech LTDSEED決算レポート

Nasdaq · 産業 · 作物生産

Origin Agritech LTD is an agricultural biotechnology firm headquartered in China. It develops, produces and distributes high-quality crop seeds including hybrid corn, rice, soybeans and genetically modified seed varieties, primarily serving the Chinese agricultural market. The company focuses on enhancing crop yield, pest resistance and stress tolerance to support sustainable farming for growers of all scales.

What changed in Origin Agritech LTD's 20-F — 2022 vs 2023

Top changes in Origin Agritech LTD's 2023 20-F

267 paragraphs added · 278 removed · 206 edited across 5 sections

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed0 unchanged
Item 2. ​ Offer Statistics and Expected Timetable 15 Item 3. ​ Key Information 15 Item 4. ​ Information on the Company 39 Item 4A ​ Unresolved Staff Comments 49 Item 5. ​ Operating and Financial Review and Prospects 50 Item 6. ​ Directors, Senior Management, and Employees 62
Item 2. ​ Offer Statistics and Expected Timetable 13 Item 3. ​ Key Information 13 Item 4. ​ Information on the Company 37 Item 4A ​ Unresolved Staff Comments 49 Item 5. ​ Operating and Financial Review and Prospects 50 Item 6. ​ Directors, Senior Management, and Employees 59

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

75 edited+17 added−19 removed234 unchanged
Accordingly, we are still facing all of the risks and uncertainties encountered by companies in the earlier stages of development, such as: ● uncertain and continued market acceptance for our product extensions and our services; ● evolving nature of the crop seed industry in the PRC, which is marked by seed company consolidation, changing aspects of government subsidies to farmers and becoming more limited, over production of crop seeds, and less adherence to the qualities of branded seeds, among other things; ● highly competitive conditions from both other branded seeds and unbranded seeds and changing customer preferences or needs that will harm sales of our products; ● the competitive landscape of e-commerce in the PRC and the evolving use of e-commerce by the Chinese population and their needs and preferences; ● maintaining our competitive position in the PRC and competing with Chinese and international companies, many of which have longer operating histories and greater resources than us; ● the aging technology of our seed products that do not reflect current agricultural and farmer needs and the continual need to develop new seed products; 22 Table of Contents ● the cost of our products compared to other sources of seeds for the same crop types; ● maintaining our current licensing arrangements and entering into new ones to expand our product offerings in both our domestic market and sought after international markets; ● using a joint venture model for our continuing business where we maintain only a simple majority stake; ● continuing to offer commercially successful products to attract and retain a larger base of direct customers and ultimate users; ● continuing our existing arrangements with farms that grow our crop seed products and entering into new arrangements with additional production farms; ● maintaining effective control of our costs and expenses; and ● retaining our management and skilled technical staff and recruiting additional key employees.
Accordingly, we are still facing all of the risks and uncertainties encountered by companies in the earlier stages of development, such as: ● uncertain and continued market acceptance for our product extensions and our services; ● evolving nature of the crop seed industry in the PRC, which is marked by seed company consolidation, changing aspects of government subsidies to farmers and becoming more limited, over production of crop seeds, and less adherence to the qualities of branded seeds, among other things; 20 Table of Contents ● highly competitive conditions from both other branded seeds and unbranded seeds and changing customer preferences or needs that will harm sales of our products; ● the competitive landscape of e-commerce in the PRC and the evolving use of e-commerce by the Chinese population and their needs and preferences; ● maintaining our competitive position in the PRC and competing with Chinese and international companies, many of which have longer operating histories and greater resources than us; ● the aging technology of our seed products that do not reflect current agricultural and farmer needs and the continual need to develop new seed products; ● the cost of our products compared to other sources of seeds for the same crop types; ● maintaining our current licensing arrangements and entering into new ones to expand our product offerings in both our domestic market and sought after international markets; ● using a joint venture model for our continuing business where we maintain only a simple majority stake; ● continuing to offer commercially successful products to attract and retain a larger base of direct customers and ultimate users; ● continuing our existing arrangements with farms that grow our crop seed products and entering into new arrangements with additional production farms; ● maintaining effective control of our costs and expenses; and ● retaining our management and skilled technical staff and recruiting additional key employees.
Further, the United States Senate has passed the Accelerating Holding Foreign Companies Accountable Act, or the AHFCA Act, which, if enacted, would decrease the number of “non-inspection years” from three years to two years, and thus, would reduce the time before our securities may be prohibited from trading or be delisted.
Further, the United States Senate passed the Accelerating Holding Foreign Companies Accountable Act, or the AHFCA Act, which, if enacted, would decrease the number of “non-inspection years” from three years to two years, and thus, would reduce the time before our securities may be prohibited from trading or be delisted.
Thus, the PRC government may ultimately find that we are in violation of any existing or future PRC laws or regulations or lack the necessary permits or licenses to operate our business, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation: ● revoking the business licenses and/or operating licenses of our PRC entities; ● imposing fines on us; ● confiscating any of our income that they deem to be obtained through illegal operations, or imposing other requirements with which we or the VIE may not be able to comply; ● discontinuing or placing restrictions or onerous conditions on our operations; ● placing restrictions on our right to collect revenues; 32 Table of Contents ● requiring us to restructure the ownership structure or operations of the Company, including terminating the contractual arrangements with the VIE and deregistering the equity rights of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert contractual control over the VIE and its subsidiary; ● restricting or prohibiting our use of the proceeds from any securities offering we may make or other of our financing activities to finance the business and operations of the VIE and the other of our subsidiaries and joint ventures; or ● taking other regulatory or enforcement actions that could be harmful to our business.
Thus, the PRC government may ultimately find that we are in violation of any existing or future PRC laws or regulations or lack the necessary permits or licenses to operate our business, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation: ● revoking the business licenses and/or operating licenses of our PRC entities; ● imposing fines on us; ● confiscating any of our income that they deem to be obtained through illegal operations, or imposing other requirements with which we or the VIE may not be able to comply; ● discontinuing or placing restrictions or onerous conditions on our operations; ● placing restrictions on our right to collect revenues; ● requiring us to restructure the ownership structure or operations of the Company, including terminating the contractual arrangements with the VIE and deregistering the equity rights of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert contractual control over the VIE and its subsidiary; ● restricting or prohibiting our use of the proceeds from any securities offering we may make or other of our financing activities to finance the business and operations of the VIE and the other of our subsidiaries and joint ventures; or ● taking other regulatory or enforcement actions that could be harmful to our business.
These companies’ extensive GM portfolio of seeds and their success in developing new traits in the seeds could render our existing products less competitive, including within the China markets, resulting in reduced sales and licensing opportunities compared to our expectations.
These companies’ extensive GM portfolio of seeds and their success in developing new traits in the seeds could render our existing products less competitive within the China markets, resulting in reduced sales and licensing opportunities compared to our expectations.
Risks relating to doing business in China The effect of the continuing Coronavirus pandemic on our company cannot fully be determined at this time, and the effects of the PRC government response cannot be gauged at this time.
Risks relating to doing business in China The effect of the Coronavirus pandemic on our company cannot fully be determined at this time, and the effects of the PRC government response cannot be gauged at this time.
In China, state owned enterprises including state owned seed companies typically enjoy preferential policy treatments such as more favorable access to capital, tax breaks and subsidies at various levels of governments. These treatments have created barriers of entry protecting state companies at the expense of private ones, both domestic and international.
In China, state owned enterprises including state owned seed companies typically enjoy preferential policy treatments such as more favorable access to capital, tax breaks and subsidies at various levels of government. These treatments have created barriers of entry protecting state companies at the expense of private ones, both domestic and international.
If we are unable to address such issue in a timely manner, or at all, we may be required to suspend or terminate our related businesses or face other penalties, our business, financial condition, results of operations, and prospects could be materially harmed. ​ ​ 38 Table of Contents
If we are unable to address such issue in a timely manner, or at all, we may be required to suspend or terminate our related businesses or face other penalties, our business, financial condition, results of operations, and prospects could be materially harmed. ​ ​ 36 Table of Contents
Based on our understanding and current assessment, we believe that we were not a PFIC for the taxable year 2022. However, there can be no assurance that we will not be a PFIC for the taxable year and/or later taxable years, as PFIC status is re-tested each year and depends on the facts in such year.
Based on our understanding and current assessment, we believe that we were not a PFIC for the taxable year 2023. However, there can be no assurance that we will not be a PFIC for the taxable year and/or later taxable years, as PFIC status is re-tested each year and depends on the facts in such year.
The following information should be read in conjunction with those statements and Item 5, “Operating and Financial Review and Prospects.” Our summary consolidated statements of operations and comprehensive income data for the fiscal years ended September 30, 2020, 2021 and 2022, and our summary consolidated balance sheet data as of September 30, 2021 and 2022, as set forth below, are derived from, and are qualified in their entirety by reference to, our audited consolidated financial statements, including the notes thereto, which are included in this Annual Report. 15 Table of Contents Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S.
The following information should be read in conjunction with those statements and Item 5, “Operating and Financial Review and Prospects.” Our summary consolidated statements of operations and comprehensive income data for the fiscal years ended September 30, 2021, 2022 and 2023, and our summary consolidated balance sheet data as of September 30, 2022 and 2023, as set forth below, are derived from, and are qualified in their entirety by reference to, our audited consolidated financial statements, including the notes thereto, which are included in this Annual Report. 13 Table of Contents Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S.
The failure to receive necessary permits or approvals could have long-term effects on our ability to enter into foreign markets. Joint ventures, partnerships, and companies with which we will engage for various aspects of our business present a number of challenges that could have a material adverse effect on our business and results of operations and cash flows.
The failure to receive necessary permits or approvals could have long-term effects on our ability to enter into foreign markets. 18 Table of Contents Joint ventures, partnerships, and companies with which we will engage for various aspects of our business present a number of challenges that could have a material adverse effect on our business and results of operations and cash flows.
The reports on our financial statements for the fiscal years ended September 30, 2020, 2021 and 2022, included in this Annual Report on Form 20-F, contain a going concern statement. During fiscal year 2021 and 2022, we raised capital through the sale of our ordinary shares under an at-the-market arrangement and a self-sell registered transaction.
The reports on our financial statements for the fiscal years ended September 30, 2021, 2022 and 2023, included in this Annual Report on Form 20-F, contain a going concern statement. During fiscal years 2021, 2022 and 2023, we raised capital through the sale of our ordinary shares under an at-the-market arrangement and a self-sell registered transaction.
In addition, they have established market presence, have obtained patent protection in some instances for different seeds, and have built up their brand reputation and distribution networks globally. For example, in the United States Monsanto (Bayer) and Corteva Agriscience, dominate the GM corn seed market with approximately 70% of that market.
In addition, they have established market presence, have obtained patent protection in some instances for different seeds, and have built up their brand reputation and distribution networks globally. For example, in the United States, Monsanto (Bayer) and Corteva Agriscience, dominate the GM corn seed market with an estimated 70% of that market.
To the extent we need additional capital; any restrictions on foreign ownership, foreign investment and repatriation of profits will hamper our ability to find capital outside of the PRC. 26 Table of Contents A return to profit repatriation controls may limit our ability to pay dividends and expand our business, and may reduce the attractiveness of investing in PRC business opportunities.
To the extent we need additional capital; any restrictions on foreign ownership, foreign investment and repatriation of profits will hamper our ability to find capital outside of the PRC. A return to profit repatriation controls may limit our ability to pay dividends and expand our business, and may reduce the attractiveness of investing in PRC business opportunities.
Any of these risks could reduce our revenues or increase our expenses, which could adversely affect our results of operations and cash flows. 20 Table of Contents If we fail to keep up with industry trends or technological developments, our business, results of operations and financial condition may be materially and adversely affected.
Any of these risks could reduce our revenues or increase our expenses, which could adversely affect our results of operations and cash flows. If we fail to keep up with industry trends or technological developments, our business, results of operations and financial condition may be materially and adversely affected.
Any of these competitive advantages could cause our existing or future products to become less competitive or outdated, and adversely affect our product acceptance in the market place and our results of operations. 21 Table of Contents We face significant international competition in the GM seed market and the competition may affect our overall sales.
Any of these competitive advantages could cause our existing or future products to become less competitive or outdated, and adversely affect our product acceptance in the market place and our results of operations. We face significant international competition in the GM seed market and the competition may affect our overall sales.
Despite the reform of the Chinese seed industry in 2008 and the anticipated market-driven industry consolidation going forward, any reversion in the Chinese government’s policy to protect state owned seed companies may again pose competitive challenges to non-state owned companies such as Origin.
Despite the reform of the Chinese seed industry in implemented in the 2008 time frame and the anticipated market-driven industry consolidation going forward, any reversion in the Chinese government’s policy to protect state owned seed companies may again pose competitive challenges to non-state owned companies such as Origin.
In such a case, our business would be impaired, and the value of the Company and the ordinary shares would decrease in value, and may in fact be deemed worthless. 31 Table of Contents Whether or not a stock consignment agreement is terminated depends on the consensus of our Board and the consignees.
In such a case, our business would be impaired, and the value of the Company and the ordinary shares would decrease in value, and may in fact be deemed worthless. Whether or not a stock consignment agreement is terminated depends on the consensus of our Board and the consignees.
As a result, any transfer pricing adjustment could have an adverse impact on our financial condition. 25 Table of Contents The discontinuation of any of the preferential tax treatments currently available to our PRC subsidiaries could materially increase our tax liabilities.
As a result, any transfer pricing adjustment could have an adverse impact on our financial condition. The discontinuation of any of the preferential tax treatments currently available to our PRC subsidiaries could materially increase our tax liabilities.
Foreign ownership in entities that directly and indirectly provide food and agricultural products is subject to restrictions under current PRC laws and regulations. Specifically, foreign ownership may not exceed 49%. We are a British Virgin Islands company and our PRC subsidiaries are considered to be a foreign-invested enterprise.
Foreign ownership in entities that directly and indirectly provide food and agricultural products is subject to restrictions under current PRC laws and regulations. Specifically, foreign ownership may not exceed 49%. 30 Table of Contents We are a British Virgin Islands company and our PRC subsidiaries are considered to be a foreign-invested enterprise.
Such translation amounts should not be construed as a representation that the Renminbi amounts could be readily converted into United States dollar amounts at that rate or any other rate. 16 Table of Contents (2) Current working capital is the difference between total current assets and total current liabilities.
Such translation amounts should not be construed as a representation that the Renminbi amounts could be readily converted into United States dollar amounts at that rate or any other rate. (2) Current working capital is the difference between total current assets and total current liabilities.
Monthly averages are calculated using the average of the daily rates during the month. B. Capitalization and indebtedness. Not Applicable C. Reasons for the offer and use of proceeds. Not Applicable. D. Risk factors.
Monthly averages are calculated using the average of the daily rates during the month. 15 Table of Contents B. Capitalization and indebtedness. Not Applicable C. Reasons for the offer and use of proceeds. Not Applicable. D. Risk factors.
There are many risks associated with a VIE structure, which are explained at length herein. 17 Table of Contents ● Aspects of our business are conducted under technical service agreements and other contractual arrangements, which may not provide the business results and assurances we expect from our contract partners. ● Our auditor have issued their opinion with a going concern qualification.
There are many risks associated with a VIE structure, which are explained at length herein. ● Aspects of our business are conducted under technical service agreements and other contractual arrangements, which may not provide the business results and assurances we expect from our contract partners. ● Our auditor has issued their opinion with a going concern qualification.
Our business continues to require substantial investment, human resources and on our cash assets. Our current resources are not likely to be fully support our longer term planned operations and expansion. 18 Table of Contents Our independent auditors have issued their reports with a going concern statement.
Our business continues to require substantial investment, human resources and on our cash assets. Our current resources are not likely to be fully support our longer term planned operations and expansion. Our independent auditors have issued their reports with a going concern statement.
No such treaty currently exists with the British Virgin Islands. Prior to 2008, dividend payments to foreign investors made by FIEs were exempt from PRC withholding tax. Any fluctuations in exchange rates may adversely affect your investment.
No such treaty currently exists with the British Virgin Islands. Prior to 2008, dividend payments to foreign investors made by FIEs were exempt from PRC withholding tax. 25 Table of Contents Any fluctuations in exchange rates may adversely affect your investment.
Unless otherwise noted, for the years ended September 30, 2021 and 2022, all translations from Renminbi to U.S. dollars in this Annual Report were made at RMB 6.4854 and RMB 7.0998 per US $1.00, respectively, which were the prevailing year or period end closing rates for those periods.
Unless otherwise noted, for the years ended September 30, 2022 and 2023, all translations from Renminbi to U.S. dollars in this Annual Report were made at RMB 7.0998 and RMB 7.1798 per US $1.00, respectively, which were the prevailing year or period end closing rates for those periods.
The translation of Renminbi amounts into United States dollar amounts has been made for the convenience of the reader and has been made at the exchange rate quoted by the State Administration of Foreign Exchange in China on September 30, 2022, of RMB 7.0998 to US$1.00.
The translation of Renminbi amounts into United States dollar amounts has been made for the convenience of the reader and has been made at the exchange rate quoted by the State Administration of Foreign Exchange in China on September 30, 2023, of RMB 7.1798 to US$1.00.
Investors should consider the foregoing limitations when making a decision to invest or retain an investment in the Company. 28 Table of Contents We may become a passive foreign investment company, which could result in adverse U.S. tax consequences to U.S. holders.
Investors should consider the foregoing limitations when making a decision to invest or retain an investment in the Company. We may become a passive foreign investment company, which could result in adverse U.S. tax consequences to U.S. holders.
GAAP. As a result, our ordinary shares would likely decline in value or become valueless. The contractual arrangements with the VIE and its shareholders may not be as effective as direct ownership in providing operational control.
GAAP. As a result, our ordinary shares would likely decline in value or become valueless. 31 Table of Contents The contractual arrangements with the VIE and its shareholders may not be as effective as direct ownership in providing operational control.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC. 24 Table of Contents However, it is unclear how tax authorities will determine tax residency based on the facts of each case.
In particular, the SAFE regulations require PRC residents to file with competent SAFE offices information about offshore companies in which they have directly or indirectly invested and to make follow-up filings in connection with certain material transactions involving such offshore companies, such as increases or decreases in investment amount, transfers or exchanges of shares, mergers or divisions, long-term equity or debt investments, or external guarantees or other material events that do not involve return investment. 27 Table of Contents The SAFE regulations required prior registration of direct or indirect investments previously made by PRC residents in offshore companies.
In particular, the SAFE regulations require PRC residents to file with competent SAFE offices information about offshore companies in which they have directly or indirectly invested and to make follow-up filings in connection with certain material transactions involving such offshore companies, such as increases or decreases in investment amount, transfers or exchanges of shares, mergers or divisions, long-term equity or debt investments, or external guarantees or other material events that do not involve return investment.
PRC insurance companies do not offer extensive business insurance products. As a result, we have very limited business liability insurance, business disruption insurance, or product liability coverage for our operations in China. We have determined that the difficulties associated with acquiring such insurance on commercially acceptable terms make it impractical for us to obtain such coverage.
As a result, we have very limited business liability insurance, business disruption insurance, or product liability coverage for our operations in China. We have determined that the difficulties associated with acquiring such insurance on commercially acceptable terms make it impractical for us to obtain such coverage.
The source of the rates is the State Administration of Foreign Exchange in China. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average (1) High Low Period-end 2018 6.6185 6.967 6.2764 6.8632 2019 6.8694 7.0884 6.685 7.0729 2020 6.9969 7.1316 6.7591 6.8101 2021 6.5059 6.7796 6.3572 6.4854 2022 6.7324 6.7620 6.6863 6.7437 July 2022 6.7949 6.8906 6.7324 6.8906 August 2022 6.9621 7.1107 6.8821 7.0998 September 2022 7.1287 7.1768 7.0992 7.1768 October 2022 7.1628 7.2555 7.0363 7.1769 November 2022 6.9833 7.1225 6.9565 6.9646 December 2022 6.7324 6.7620 6.6863 6.7437 (1) Annual averages are calculated from month-end rates.
The source of the rates is the State Administration of Foreign Exchange in China. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average (1) High Low Period-end 2019 6.8694 7.0884 6.685 7.0729 2020 6.9969 7.1316 6.7591 6.8101 2021 6.5059 6.7796 6.3572 6.4854 2022 6.7324 6.7620 6.6863 6.7437 2023 7.0467 7.2157 7.1265 7.1305 July 2023 6.7949 6.8906 6.7324 6.8906 August 2023 6.9621 7.1107 6.8821 7.0998 September 2023 7.1287 7.1768 7.0992 7.1768 October 2023 7.1628 7.2555 7.0363 7.1769 November 2023 6.9833 7.1225 6.9565 6.9646 December 2023 7.1039 7.1176 7.0827 7.0827 (1) Annual averages are calculated from month-end rates.
However, we may be unable to obtain protection for our intellectual property. Even if protection is obtained, competitors, growers or others in the chain of commerce may raise legal challenges to our rights or illegally infringe our rights, including through means that may be difficult to prevent, detect or defend.
Even if protection is obtained, competitors, growers or others in the chain of commerce may raise legal challenges to our rights or illegally infringe our rights, including through means that may be difficult to prevent, detect or defend.
An adverse determination in any such proceeding could subject us to significant liability and damage our market reputation and prevent us from achieving increased sales and market share. Protracted litigation could also result in our customers or potential customers deferring or limiting their purchase of our products. 24 Table of Contents We have limited business insurance coverage in China.
An adverse determination in any such proceeding could subject us to significant liability and damage our market reputation and prevent us from achieving increased sales and market share. Protracted litigation could also result in our customers or potential customers deferring or limiting their purchase of our products.
During such cybersecurity review, we may be required to stop providing services to our customers, and such review could also result in negative publicity to us and diversion of our managerial and financial resources. 37 Table of Contents In addition, the draft amendment to the Measures for Cyber Security Review, or draft measures, published by the Cyberspace Administration of China in July 2021 provides that an application for cyber security review should be made by an issuer who is a “critical information infrastructure operator (CIIO)” or a “data processing operator” as defined therein when an issuer’s securities are listed in a foreign country if the issuer possesses personal information of more than one million users, and that the relevant governmental authorities in the PRC may initiate cyber security review if such governmental authorities determine an operator’s cyber products or services, data processing or potential listing in a foreign country affect or may affect national security.
In addition, the draft amendment to the Measures for Cyber Security Review, or draft measures, published by the Cyberspace Administration of China in July 2021 provides that an application for cyber security review should be made by an issuer who is a “critical information infrastructure operator (CIIO)” or a “data processing operator” as defined therein when an issuer’s securities are listed in a foreign country if the issuer possesses personal information of more than one million users, and that the relevant governmental authorities in the PRC may initiate cyber security review if such governmental authorities determine an operator’s cyber products or services, data processing or potential listing in a foreign country affect or may affect national security.
Some of our PRC operations, being those related to the seed research and seed production are through operating entities established in the PRC that are variable interest entities, collectively, the VIE; b) the Company and investors, in respect of the portion of our business operating in the PRC through a VIE, face uncertainty about future actions by the government of the PRC that could significantly limit and adversely affect the Company’s financial performance and the enforceability of the contractual arrangements of the VIE; c) the Company has filed this annual report on Form 20-F detailing the financial aspects of the company, including consolidation of the VIE operations, which are not separately stated; d) because the Company is a British Virgin Islands company formed in 2004, the Company was not required to apply for approval from the government of the PRC to be listed on a United States stock exchange, however, that could change in the future; and e) the United States Holding Foreign Companies Accountable Act, which requires that the Public Company Accounting Oversight Board (PCAOB) be permitted to inspect the issuer’s public accounting firm within three years, may result in the delisting of the operating company in the future if the PCAOB is unable to inspect the firm.
Some of our PRC operations, being those related to the seed research and seed production are through operating entities established in the PRC that are variable interest entities, collectively, the VIE; b) the Company and investors, in respect of the portion of our business operating in the PRC through a VIE, face uncertainty about future actions by the government of the PRC that could significantly limit and adversely affect the Company’s financial performance and the enforceability of the contractual arrangements of the VIE; c) the Company has filed this annual report on Form 20-F detailing the financial aspects of the company, including consolidation of the VIE operations, which are not separately stated; d) because the Company is a British Virgin Islands company formed in 2004, the Company was not required to apply for approval from the government of the PRC to be listed on a United States stock exchange, however, that could change in the future; and e) the United States Holding Foreign Companies Accountable Act, which requires that the Public Company Accounting Oversight Board (PCAOB) be permitted to inspect the issuer’s public accounting firm within three years, may result in the delisting of the operating company in the future if the PCAOB is unable to inspect the firm. 29 Table of Contents Part of our PRC operations is conducted through contractually controlled subsidiaries rather than by direct ownership of 100% of their equity, the terms of which may have to be enforced, which would require us to incur extra costs, create uncertainty as to ownership of the operating businesses involved, and risk the possible loss of rights.
Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and the Company, except that we could exercise our purchase rights under the agreements with these shareholders to request them to transfer all of their equity interests in the VIE to a PRC entity or individual designated by us, to the extent permitted by PRC law.
We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best interests of the Company or such conflicts will be resolved in our favor. 32 Table of Contents Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and the Company, except that we could exercise our purchase rights under the agreements with these shareholders to request them to transfer all of their equity interests in the VIE to a PRC entity or individual designated by us, to the extent permitted by PRC law.
Similarly, if any of the equity interests of the VIE is inherited by a third party with whom the current contractual arrangements are not binding, we could lose our control over the VIE or have to maintain such control by incurring unpredictable costs, which could cause significant disruption to our business and operations and harm our financial condition and results of operations. 34 Table of Contents Our use of a VIE structure within our overall corporate organization exposes the Company to potential loss of that portion of the business.
Similarly, if any of the equity interests of the VIE is inherited by a third party with whom the current contractual arrangements are not binding, we could lose our control over the VIE or have to maintain such control by incurring unpredictable costs, which could cause significant disruption to our business and operations and harm our financial condition and results of operations.
There are still uncertainties regarding the interpretation and implementation of these opinions, and further explanations or detailed rules and regulations with respect to these opinions may be issued in the future. There is still substantial uncertainty as to whether or not these opinions will impose additional requirements on us.
There are still uncertainties regarding the interpretation and implementation of these opinions, and further explanations or detailed rules and regulations with respect to these opinions may be issued in the future.
Also, under SEC and Nasdaq rules, we do not have to provide in our reports and corporate governance certain information and investor protections. ● The trading of our ordinary shares on Nasdaq is volatile and inconsistent. You may not be able to effect transactions in your shares at a posted price or in the quantity you desire.
Also, under SEC and Nasdaq rules, we do not have to provide in our reports and corporate governance certain information and investor protections. ● The trading of our ordinary shares on Nasdaq is volatile and inconsistent.
In addition, we may incur substantial expenses in defending against these third party infringement claims, regardless of their merit. 23 Table of Contents Efforts to protect our intellectual property rights and to defend against claims can increase our costs and may not always succeed.
In addition, we may incur substantial expenses in defending against these third party infringement claims, regardless of their merit. Efforts to protect our intellectual property rights and to defend against claims can increase our costs and may not always succeed. Any failures could adversely affect our sales and results of operations or restrict our ability to conduct our business.
The relative novelty and the potential uncertainty in the government regulation of genetic technology and ultimate consumer acceptance will have an effect on our business development strategy and research activities and may cause us to re-evaluate our development programs for developing new seeds. 19 Table of Contents The government may not approve or may limit commercialization of genetically modified corn products, which could have an adverse impact on the future of the company.
The relative novelty and the potential uncertainty in the government regulation of genetic technology and ultimate consumer acceptance will have an effect on our business development strategy and research activities and may cause us to re-evaluate our development programs for developing new seeds.
In addition, many of our directors and executive officers reside within the PRC, and substantially all of the assets of these persons are located within the PRC.
We are incorporated in the British Virgin Islands and our PRC operating subsidiaries are formed under PRC law. Substantially all of our assets are located in the PRC. In addition, many of our directors and executive officers reside within the PRC, and substantially all of the assets of these persons are located within the PRC.
If these or other disputes between the shareholders of the VIE and third parties were to impair our control over the VIE, our ability to consolidate the financial results of the VIE would be affected, which would in turn result in a material adverse effect on our business, operations and financial condition. 33 Table of Contents All the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through the courts in China.
If these or other disputes between the shareholders of the VIE and third parties were to impair our control over the VIE, our ability to consolidate the financial results of the VIE would be affected, which would in turn result in a material adverse effect on our business, operations and financial condition.
The Chinese government has only recently begun to issue GM crop safety certificates for eventual commercial cultivation of GM seeds. The Chinese government is encouraging food independence as a country, and we believe that it will increasingly favor GM food products as these products provide better yield and can accommodate changing climatic changes.
The Chinese government is encouraging food independence as a country, and we believe that it will increasingly favor GM food products as these products provide better yield and can accommodate changing climatic changes.
In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that withholding tax rate of 10% will be applicable to dividends payable by PRC companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated. 36 Table of Contents Any limitation on the ability of our PRC located companies and VIE to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that withholding tax rate of 10% will be applicable to dividends payable by PRC companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated.
Any actions by the PRC government to exert more oversight and control over offerings that are conducted overseas or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities and our other outstanding securities to significantly decline or be worthless.
Any actions by the PRC government to exert more oversight and control over offerings that are conducted overseas or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities and our other outstanding securities to significantly decline or be worthless. 33 Table of Contents Contractual arrangements in relation to the VIE may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIE owes additional taxes, which could negatively affect our financial condition and the value of your investment.
In that event we might face delisting of our securities from NASDAQ and the value of our ordinary shares in the market would decline in valuable. 30 Table of Contents Risks relating to our corporate structure Below are risk factors that relate to our business structure, which should be carefully reviewed before making an investment in the securities that may be offered by the company or in the public market.
Risks relating to our corporate structure Below are risk factors that relate to our business structure, which should be carefully reviewed before making an investment in the securities that may be offered by the company or in the public market.
As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a consolidated VIE should be interpreted or enforced under PRC law.
Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a consolidated VIE should be interpreted or enforced under PRC law. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary.
Consequently, if we are not able to fund our research and development activities and deliver new products to the markets we serve on a timely basis, our growth and operations will be harmed. In addition, sales of the Company’s new products could cannibalize sales of some of its current products, offsetting the benefit of even a successful product introduction.
Consequently, if we are not able to fund our research and development activities and deliver new products to the markets we serve on a timely basis, our growth and operations will be harmed.
Investors in the BVI holding company may never have a direct ownership interest in the part of the business that is conducted by the VIE.
Our corporate structure is subject to risks associated with the contractual arrangements with the VIE and the parties to those contractual arrangements. Investors in the BVI holding company may never have a direct ownership interest in the part of the business that is conducted by the VIE.
Independent registered public accounting firms, such as Borgers, the firm we use, that issue the audit reports included in annual reports filed with the SEC are required by the laws of the United States to undergo regular inspections by the Public Company Accounting Oversight Board (“PCAOB”) to assess compliance with the laws of the United States and professional standards.
Independent registered public accounting firms, such as Borgers, the firm we use, that issue the audit reports included in annual reports filed with the SEC are required by the laws of the United States to undergo regular inspections by the Public Company Accounting Oversight Board (“PCAOB”) to assess compliance with the laws of the United States and professional standards. 28 Table of Contents Article 177 of the PRC Securities Law, which became effective in March 2020, states that no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC.
To the extent we are uncompetitive, our business will be adversely affected and our financial results negatively impacted. The global competition in biotechnology will affect our business. We believe we are a leader in biotechnology in China since we have been conducting our proprietary biotechnology research program for many years and have an internal biotech research center.
We believe we are a leader in biotechnology in China since we have been conducting our proprietary biotechnology research program for many years and have an internal biotech research center.
On January 3, 2020, the Company engaged Borgers as its independent registered public accounting firm. The firm is registered with the PCAOB and operates in Lakewood, Colorado, USA, and is subject to PCAOB rules regarding periodic inspection.
The firm is registered with the PCAOB and operates in Lakewood, Colorado, USA, and is subject to PCAOB rules regarding periodic inspection.
In our experience, the seed markets in China have substantial counterfeiting, and we believe many other kinds of agricultural products also are subject to counterfeiting. Overall, we plan to obtain and protect our intellectual property rights and those to which we have intellectual property rights of use and distribution.
Intellectual property rights are important to our business, as our seeds depend on long and complicated development processes. In our experience, the seed markets in China have substantial counterfeiting, and we believe many other kinds of agricultural products also are subject to counterfeiting.
We may not profit from the joint venture as hoped for. The successful development and commercialization of our biotech pipeline of products will be important for our growth. We focus our seed business on biotechnology development in the seed industry. We conduct our own research and development efforts for genetically modified seeds, referred to as GM.
We focus our seed business on biotechnology development in the seed industry. We conduct our own research and development efforts for genetically modified seeds, referred to as GM.
In addition to the uncertainty in how the “resident enterprise” classification could apply, it is also possible that the rules may change in the future, possibly with retroactive effect.
We may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. In addition to the uncertainty in how the “resident enterprise” classification could apply, it is also possible that the rules may change in the future, possibly with retroactive effect.
These provisions could have the effect of depriving you of the opportunity to sell your shares at a premium over prevailing market prices by discouraging third parties from seeking to acquire control of us in a tender offer or similar transactions.
These provisions could have the effect of depriving you of the opportunity to sell your shares at a premium over prevailing market prices by discouraging third parties from seeking to acquire control of us in a tender offer or similar transactions. 27 Table of Contents We qualify as a foreign private issuer and, as a result, are subject to reduced requirements with respect to the reporting of financial statements and other material events to our shareholders and the SEC.
However, it is unclear how tax authorities will determine tax residency based on the facts of each case. If the PRC tax authorities determine that our British Virgin Islands holding company is a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow.
If the PRC tax authorities determine that our British Virgin Islands holding company is a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. We may be subject to enterprise income tax on our worldwide taxable income as well as PRC enterprise income tax reporting obligations.
Therefore, it still leaves leeway for future laws, administrative regulations or provisions of the State Council to provide for contractual arrangements as a form of foreign investment, at which time it will be uncertain whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment in the PRC and if yes, how our contractual arrangements should be dealt with. 35 Table of Contents The Foreign Investment Law grants national treatment to foreign-invested entities, except for those foreign-invested entities that operate in industries specified as either “restricted” or “prohibited” from foreign investment in the Special Administrative Measures (Negative List) for Foreign Investment Access jointly promulgated by the Ministry of Commerce and the National Development and Reform Commission, or the NDRC, and took effect in July 2020.
Therefore, it still leaves leeway for future laws, administrative regulations or provisions of the State Council to provide for contractual arrangements as a form of foreign investment, at which time it will be uncertain whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment in the PRC and if yes, how our contractual arrangements should be dealt with.
GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ 2021 ​ 2022 ​ 2022 ​ RMB’000 RMB’000 RMB’000 US$’000 Revenues 52,513 46,425 52,580 7,406 Cost of revenues (49,000) (33,611) (36,386) (5,125) Gross profit 3,513 12,814 16,194 2,281 Operating expenses ​ ​ ​ ​ Selling and marketing (4,820) (5,564) (7,335) (1,033) General and administrative (58,069) (73,315) (14,321) (2,017) Research and development (4,116) (1,979) (7,434) (1,047) Impairment of assets (28,091) (69,870) — — Total operating expenses, net (95,096) (150,728) (29,090) (4,097) Loss from operations (91,583) (137,914) (12,896) (1,816) Interest expense, net (5,796) (8,558) (8,228) (1,159) Impairment of long-term investment (5,994) (5,958) (2,906) (409) Rental income 7,643 10,603 10,603 1,493 Other non-operating income (expense), net (6,687) 14,924 15,738 2,217 Loss before income taxes (102,417) (126,903) 2,311 326 Income tax (expense) benefits, Current (425) (178) 14 2 Net loss (102,842) (127,081) 2,325 328 Less: Net (loss) income attributable to non-controlling interests (17,581) (35,552) 8,590 1,210 Net loss attributable to Origin Agritech Limited (85,261) (91,529) (6,265) (882) Other comprehensive loss ​ ​ ​ ​ Net loss (102,842) (127,081) 2,325 328 Foreign currency translation difference 1,371 (816) 447 63 Comprehensive loss (101,471) (127,897) 2,772 391 Less: Comprehensive (loss) income attributable to non-controlling interests (17,581) (35,552) 8,590 1,210 Comprehensive loss attributable to Origin Agritech Limited (83,890) (92,345) (5,818) (819) Basic and diluted net income (loss) per share (note 21) ​ ​ ​ ​ ​ ​ ​ ​ Continuing operations ​ (16.95) ​ (16.29) ​ (1.09) ​ (0.15) Basic and diluted net loss per share attributable to Origin Agritech Limited (note 21) ​ (16.95) ​ (16.29) ​ (1.09) ​ (0.15) Shares used in computing earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ Shares used in calculating basic and diluted net income (loss) per share* ​ 5,029,017 ​ 5,617,424 ​ 5,773,094 ​ 5,773,094 Diluted* ​ 5,029,017 ​ 5,617,424 ​ 5,773,094 ​ 5,773,094 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sept 30 Sept 30 Sept 30 Sept 30 ​ 2020 2021 2022 2022 ​ ​ RMB’000 ​ RMB’000 ​ RMB’000 ​ USD’000(1) Consolidated balance sheet data: Cash and cash equivalents 22,482 15,351 17,669 2,489 Restricted cash 147 14 — — Current working capital (2) (112,542) (228,224) (211,325) (29,765) Total assets 254,883 119,038 135,955 19,149 Total current liabilities 176,940 286,367 292,865 41,250 Total liabilities 340,345 304,636 308,597 43,465 Non-controlling interests (8,272) (44,926) (38,770) (5,461) Total Origin Agritech Limited shareholders’ equity (85,462) (185,598) (172,642) (24,317) (1) Translation of Renminbi amounts into United States dollar amounts has been made for the convenience of the reader for the year ended September 30, 2022, and has been made at the exchange rate quoted by the State Administration of Foreign Exchange in China on September 30, 2022, of RMB 7.0998 to US$1.00.
GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ 2022 ​ 2023 ​ 2023 ​ RMB’000 RMB’000 RMB’000 US$’000 Revenues 46,425 52,580 93,307 12,996 Cost of revenues (33,611) (36,386) (76,060) (10,594) Gross profit 12,814 16,194 17,247 2,402 Operating expenses ​ ​ Selling and marketing (5,564) (7,335) (8,359) (1,164) General and administrative (73,315) (14,321) (14,228) (1,982) Research and development (1,979) (7,434) (7,447) (1,037) Impairment of assets (69,870) — (2,204) (307) Total operating expenses, net (150,728) (29,090) (32,238) (4,490) Loss from operations (137,914) (12,896) (14,991) (2,088) Interest income, net (8,558) (8,228) (982) (137) Impairment of long-term investment (5,958) (2,906) (1,490) (208) Rental income 10,603 10,603 10,603 1,477 Other non-operating income (expense), net 14,924 15,738 69,691 9,707 Loss before income taxes (126,903) 2,311 62,831 8,751 Income tax (expense) benefits, Current (178) 14 (162) (23) Net loss (127,081) 2,325 62,669 8,728 Less: Net (loss) income attributable to non-controlling interests (35,552) 8,590 7,337 1,022 Net loss attributable to Origin Agritech Limited (91,529) (6,265) 55,332 7,706 Other comprehensive loss ​ ​ Net loss (127,081) 2,325 62,669 8,728 Foreign currency translation difference (816) 447 (214) (30) Comprehensive loss (127,897) 2,772 62,455 8,698 Less: Comprehensive (loss) income attributable to non-controlling interests (35,552) 8,590 7,337 1,022 Comprehensive loss attributable to Origin Agritech Limited (92,345) (5,818) 55,118 7,676 Basic and diluted net income (loss) per share (note 21) ​ ​ ​ Continuing operations ​ (16.29) (1.09) 8.45 1.18 Basic and diluted net loss per share attributable to Origin Agritech Limited (note 21) ​ (16.29) (1.09) 8.43 1.17 Shares used in computing earnings per share: ​ ​ ​ Shares used in calculating basic and diluted net income (loss) per share* ​ 5,617,424 5,773,094 6,546,153 6,546,153 Diluted* ​ 5,617,424 5,773,094 6,562,278 6,562,278 ​ ​ 14 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ Sept 30 Sept 30 Sept 30 ​ 2022 2023 2023 ​ ​ RMB’000 ​ RMB’000 ​ US$’000 Consolidated balance sheet data: Cash and cash equivalents 17,669 23,708 3,302 Restricted cash — 561 78 Current working capital (2) (211,325) (171,679) (23,912) Total assets 135,955 238,506 33,220 Total current liabilities 292,865 313,461 43,660 Total liabilities 308,597 319,766 44,538 Non-controlling interests (38,770) (23,862) (3,323) Total Origin Agritech Limited shareholders’ equity (172,642) (81,260) (11,318) (1) Translation of Renminbi amounts into United States dollar amounts has been made for the convenience of the reader for the fiscal year ended September 30, 2023, and has been made at the exchange rate quoted by the State Administration of Foreign Exchange in China on September 30, 2023, of RMB 7.1798 to US$1.00.
Risks relating to our business We currently use regional joint venture companies for our seed distribution business; These companies may not be able to perform as we expected. We have regional joint venture companies for our seed distribution business. The Company has stock positions of 51% or 50% in these joint ventures.
We have regional joint venture companies for our seed distribution business. The Company has stock positions of 51% or 50% in these joint ventures. Most of the joint venture partners were the Company’s regional distributors in the past.
If the fines are substantial or if our ability to sell or operate is withdrawn, this will result in additional costs or the loss of revenues and could prevent us from continuing as an operating business.
If the fines are substantial or if our ability to sell or operate is withdrawn, this will result in additional costs or the loss of revenues and could prevent us from continuing as an operating business. 23 Table of Contents The technical services agreements between Origin Biotechnology and the other operating subsidiaries, including the VIE arrangement, may be subject to scrutiny by the PRC tax authorities for transfer pricing adjustments.
If we are unable to fund our operations, we may have to curtail substantial parts of our business operations or cease our business operations. Investors should evaluate their investment in the Company based on these financial uncertainties. Our seed biotechnology joint venture formed with BC-TID may not perform as well as we expected.
If we are unable to fund our operations, we may have to curtail substantial parts of our business operations or cease our business operations. Investors should evaluate their investment in the Company based on these financial uncertainties. The successful development and commercialization of our biotech pipeline of products will be important for our growth.
To date, because of the Chinese government steps taken in combating the spread of the Coronavirus, the impact of the Coronavirus on the Company and on our ability to produce and distribute products has been insignificant. As government policies change, however, our business may be adversely impacted.
We do not believe that the Coronavirus lockdown period had a significant impact on the Company and on our ability to produce and distribute products has been insignificant. As government policies change as a result of the end of the lock down period, however, our business may be adversely impacted.
The potential uncertainty in the government regulation in China of genetic technology and genetically modified, or GM, agricultural products and the acceptance of these products by the public could have an adverse effect on our business. Genetically modified seed products are controversial; thus genetic modification has not yet been accepted in many countries throughout the world.
It could have an adverse effect on our operations if our genetically modified products are unable to pass the safety evaluation for genetically modified agricultural organisms. 17 Table of Contents The potential uncertainty in the government regulation in China of genetic technology and genetically modified, or GM, agricultural products and the acceptance of these products by the public could have an adverse effect on our business.
In addition, if the VIE undergoes an involuntary liquidation proceeding, third-party creditors may claim rights to some or all of its assets, thereby hindering our ability to operate our business, which could materially or adversely affect our business, financial condition and results of operations.
In addition, if the VIE undergoes an involuntary liquidation proceeding, third-party creditors may claim rights to some or all of its assets, thereby hindering our ability to operate our business, which could materially or adversely affect our business, financial condition and results of operations. 34 Table of Contents Apart from our capital funding, we may rely on dividends and other distributions from our wholly and partly owned subsidiaries and the VIE to upstream legally available funds for operational costs and any distributions that might be made by the BVI holding company to investors.
Our involvement in food seed development, an industry that has limits on foreign ownership, could encourage the PRC government to intervene in our operations. Our corporate structure is subject to risks associated with the contractual arrangements with the VIE and the parties to those contractual arrangements.
Our use of a VIE structure within our overall corporate organization exposes the Company to potential loss of that portion of the business. Our involvement in food seed development, an industry that has limits on foreign ownership, could encourage the PRC government to intervene in our operations.
The actual and accounting costs for discontinued operations may have an adverse effect on the financial position of the company in the period of discontinuance, which may result in an adverse market reaction and decline in our stock price.
The actual and accounting costs for discontinued operations may have an adverse effect on the financial position of the company in the period of discontinuance, which may result in an adverse market reaction and decline in our stock price. 21 Table of Contents We or our licensors may be subject to intellectual property infringement claims, which may force us to incur substantial legal expenses and, if determined adversely against us or our licensors, may materially disrupt our business.
In other respects, we do follow the Nasdaq Marketplace Rules, such as having a nominations and compensation committee, but these are voluntary and may be eliminated at any time. 29 Table of Contents A consistently active trading market for shares of our ordinary shares may not be sustained. Historically, trading in our ordinary shares has been volatile.
Consequently, investors may not have the ability to express their opinion on our business and the actions of directors through the voting process for directors. In other respects, we do follow the Nasdaq Marketplace Rules, such as having a nominations and compensation committee, but these are voluntary and may be eliminated at any time.
We may be exposed to product quality claims, which may cause us to incur substantial legal expenses and, if determined adversely against us, may cause us to pay significant damage awards.
In addition, sales of the Company’s new products could cannibalize sales of some of its current products, offsetting the benefit of even a successful product introduction. 22 Table of Contents We may be exposed to product quality claims, which may cause us to incur substantial legal expenses and, if determined adversely against us, may cause us to pay significant damage awards.
Investors in our securities should consider the uncertainties of the legal system within China as part of their evaluation of whether or not to invest or retain their investment in the Company.
Investors in our securities should consider the uncertainties of the legal system within China as part of their evaluation of whether or not to invest or retain their investment in the Company. 26 Table of Contents You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in the PRC based on United States judgments against us, our subsidiaries, officers and directors.
As the medical situation changes relative to the continuing aspects of world-wide pandemic and government policies change in China, we could face adverse consequences to our ability to perform research, generate products and effect distribution of products and otherwise pursue our business.
At this time we cannot guage the future effect on our business of the government Coronavirus policies, if they continue. We could face adverse consequences to our ability to perform research, generate products and effect distribution of products and otherwise pursue our business.
In addition, the Data Security Law was promulgated on June 10, 2021, and became effective in September 2021. The Personal Information Protection Law was promulgated on August 20, 2021, and officially implemented on November 1, 2021. The Data Security Law, among other things, provides for security review procedures for data activities that may affect national security.
The Data Security Law, among other things, provides for security review procedures for data activities that may affect national security.
Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal system in the PRC is not as developed as in some other jurisdictions, such as the United States.
All the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through the courts in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures.
Removed
Most of the joint venture partners were the Company’s regional distributors in the past.
Added
You may not be able to effect transactions in your shares at a posted price or in the quantity you desire. 16 Table of Contents Risks relating to our business We currently use regional joint venture companies for our seed distribution business; These companies may not be able to perform as we expected.
Removed
In 2019, the Company entered into a Cooperation Framework Agreement with Beijing Changping Technology Innodevelop Group (BC-TID), an entity owned by the government of Changping District of Beijing City. As of September 30, 2021, BC-TID has invested a total of RMB137.7 million ($20.2 million) as part of the agreement.
Added
Genetically modified seed products are controversial; thus genetic modification has not yet been accepted in many countries throughout the world. The Chinese government has only recently begun to issue GM crop safety certificates for eventual commercial cultivation of GM seeds.
Removed
The deal documents have been completed by both Origin and BC-TID and have been submitted to government officials for final approval, which approval is delayed due to the Covid19 pandemic and extended to a new completion date of before February 2024.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

46 edited+29 added−11 removed90 unchanged
After the completion of productive testing, the GMO research entity may make an application to the MARA for a safety certificate of the tested GMO. Our products are generally classified as Class I. As of September 30, 2019, the Company has received safety certificate for its phytase corn products.
After the completion of productive testing, the GMO research entity may make an application to the MARA for a safety certificate of the tested GMO. Our products are generally classified as Class I. As of September 30, 2023, the Company has received safety certificate for its phytase corn products.
Rules are also made by government departments responsible for administering the laws covering administrative arrangements, procedures and standards including labelling of seed containers. Seed Production and Operation License The Revised Law combines the seed production license and distribution license regimes into one Seed Production and Operation License (“SP&O License”) and greater intellectual property protection.
Rules are also made by government departments responsible for administering the laws covering administrative arrangements, procedures and standards including labelling of seed containers. 42 Table of Contents Seed Production and Operation License The Revised Law combines the seed production license and distribution license regimes into one Seed Production and Operation License (“SP&O License”) and greater intellectual property protection.
Notwithstanding our obtaining the Bio-Safety Certificate from the Chinese government and our applications, there can be no assurance that GM products generally will be approved in China, and we expect that the introduction and acceptance of GM products will be cautious. 41 Table of Contents Intellectual Property Our intellectual property includes trademarks and patents relating to our seed products.
Notwithstanding our obtaining the Bio-Safety Certificate from the Chinese government and our applications, there can be no assurance that GM products generally will be approved in China, and we expect that the introduction and acceptance of GM products will be cautious. Intellectual Property Our intellectual property includes trademarks and patents relating to our seed products.
We conduct our operations in China primarily through our PRC Operating Companies, of which Beijing Origin (and its subsidiary, Xinjiang Origin) is a VIE arrangement, and the other companies are either full equity or part equity owned by State Harvest, which is full equity owned by the holding company.
We conduct our operations in China primarily through our PRC Operating Companies, of which Hainan Aoyu (and its subsidiary, Xinjiang Origin) is a VIE arrangement, and the other companies are either full equity or part equity owned by State Harvest, which is full equity owned by the holding company.
We are in the process of applying for GMO Biosafety certificate and actively discussing with related authorities to meet the requirements for the biosafety certificate. 44 Table of Contents Foreign Ownership Restrictions of Chinese Seed Companies Currently, China restricts foreign ownership of businesses in the seed industry.
We are in the process of applying for GMO Biosafety certificate and actively discussing with related authorities to meet the requirements for the biosafety certificate. Foreign Ownership Restrictions of Chinese Seed Companies Currently, China restricts foreign ownership of businesses in the seed industry.
Producers for seeds other than the abovementioned five major ones will only need to register their products with the regulators under the Revised Law. 43 Table of Contents Seed approval can be applied at the provincial level and/or the national level.
Producers for seeds other than the abovementioned five major ones will only need to register their products with the regulators under the Revised Law. Seed approval can be applied at the provincial level and/or the national level.
Xinjiang Origin is a subsidiary of Beijing Origin with 51% ownership, and the Company is in the process of transferring this ownership from Beijing Origin to Hainan Aoyu. 46 Table of Contents The table below lists each of our group companies, their place of incorporation and their percentage of ownership interest as of September 30, 2022: ​ ​ ​ ​ ​ ​ ​ Place of incorporation Percentage Name (or establishment)/operation of ownership ​ ​ ​ ​ ​ State Harvest BVI British Virgin Islands 100% equity owned by Origin ​ ​ ​ ​ ​ OAL SMY Limited New Jersey, United States 100% equity owned by Origin ​ ​ ​ ​ ​ Origin Biotechnology Haidian District, Beijing, PRC 100% equity owned by State Harvest BVI ​ ​ ​ ​ ​ Beijing Origin Haidian District, Beijing, PRC 98.52% VIE owned and controlled by State HarvestBVI ​ ​ ​ ​ ​ Hainan Aoyu Sanya, Hainan Province, PRC 100% VIE owned and controlled by State Harvest BVI ​ ​ ​ ​ ​ Xinjiang Origin Jinbo City, Xinjiang Province, PRC 51% equity owned by Beijing Origin ​ ​ ​ ​ ​ Henan Aoyu Zhengzhou City, Henan Province, PRC 51% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Anhui Aoyu Hefei, Anhui Province, PRC 50% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Hubei Aoyu Wuhan, Hubei Province, PRC 51% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Xuzhou Aoyu Xuzhou, Jiangsu Province, PRC 51% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Shandong Aoruixinong Qingdao, Shandong Province, PRC 51% equity owned by Origin Biotechnology ​ Stock Consignment Agreements Under Chinese law, foreign ownership of businesses engaged in the breeding of new varieties, development, production, marketing, distribution and sale of hybrid food crop seeds is limited to 49% pursuant to the Regulation on the Approval and Registration of Foreign Investment Enterprises in Agricultural Seed Industry and The Foreign Investment Industrial Guidance Catalogue.
The following diagram illustrates our current organizational structure as of September 30, 2023. 46 Table of Contents The table below lists each of our group companies, their place of incorporation and their percentage of ownership interest as of September 30, 2023: ​ ​ ​ ​ ​ ​ ​ Place of incorporation Percentage Name (or establishment)/operation of ownership ​ ​ ​ ​ ​ State Harvest BVI British Virgin Islands 100% equity owned by Origin ​ ​ ​ ​ ​ OAL SMY Limited New Jersey, United States 100% equity owned by Origin ​ ​ ​ ​ ​ Origin Biotechnology Haidian District, Beijing, PRC 100% equity owned by State Harvest BVI ​ ​ ​ ​ ​ Hainan Aoyu Sanya, Hainan Province, PRC 100% VIE owned and controlled by State Harvest BVI ​ ​ ​ ​ ​ Xinjiang Originbo Jinbo City, Xinjiang Province, PRC 70.52% equity owned by Hainan Aoyu ​ ​ ​ ​ ​ Henan Aoyu Zhengzhou City, Henan Province, PRC 51% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Anhui Aoyu Hefei, Anhui Province, PRC 50% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Hubei Aoyu Wuhan, Hubei Province, PRC 51% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Xuzhou Aoyu Xuzhou, Jiangsu Province, PRC 51% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Shandong Aoruixinong Qingdao, Shandong Province, PRC 51% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Beijing Origin ​ Beijing, PRC ​ 48.27% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Baodao Origin ​ Zhengzhou, Henan Province, PRC ​ 51% equity owned by Origin Biotechnology ​ ​ ​ ​ ​ Shihezi Baodao ​ Shihezi, Xinjiang Province, PRC ​ 100% equity owned by Baodao Origin ​ Stock Consignment Agreements Under Chinese law, foreign ownership of businesses engaged in the breeding of new varieties, development, production, marketing, distribution and sale of hybrid food crop seeds is limited to 49% pursuant to the Regulation on the Approval and Registration of Foreign Investment Enterprises in Agricultural Seed Industry and The Foreign Investment Industrial Guidance Catalogue.
We believe that these cooperative agreements allow us to access new products without expending substantial costs for our own research and development. In April 2016, we entered into a commercial licensing agreement with DuPont Pioneer, the advanced seed and genetic business of DuPont. Pursuant to the license, the Company and DuPont would jointly develop new seeds for Chinese farmers.
We believe that these cooperative agreements allow us to access new products without expending substantial costs for our own research and development. 38 Table of Contents In April 2016, we entered into a commercial licensing agreement with DuPont Pioneer, the advanced seed and genetic business of DuPont.
These joint ventures include: Hubei Aoyu, Anhui Aoyu in Anhui province, Xuzhou Aoyu in Jiangsu province, Shandong Aoruixinong in Shandong province and Henan Aoyu in Henan province. Origin indirectly holds 50% of the equity in Anhui Aoyu and 51% of equity in the other joint ventures. The remaining equity interests in those joint ventures are held by local distributors.
These joint ventures include: Hubei Aoyu in Hubei Province, Anhui Aoyu in Anhui province, Xuzhou Aoyu in Jiangsu province, Shandong Aoruixinong in Shandong province and Henan Aoyu in Henan province. Origin indirectly holds 50% of the equity in Anhui Aoyu and 51% of equity in the other joint ventures.
Origin owns these joint ventures through Origin Biotechnology. In 2019, the Company entered into a Cooperation Framework Agreement with Beijing Changping Technology Innodevelop Group (BC-TID), an entity owned by the government of Changping District of Beijing City.
The remaining equity interests in those joint ventures are held by local distributors. Origin owns these joint ventures through Origin Biotechnology. 37 Table of Contents In 2019, the Company entered into a Cooperation Framework Agreement with Beijing Changping Technology Innodevelop Group (BC-TID), an entity owned by the government of Changping District of Beijing City.
To date, five corn traits have been approved, including phytase corn, and Bt Rice, but they have yet to obtain approval for commercial seed sales in China. The limited GM technology approval therefore currently limits their competitive advantage.
The extent of future acceptance of GM products is not yet determinable, although there are positive regulatory signs. To date, five corn traits have been approved, including phytase corn, and Bt Rice, but they have yet to obtain approval for commercial seed sales in China. The limited GM technology approval therefore currently limits their competitive advantage.
The preferential treatment of high and new technology enterprise or HNTE, is subject to a reapplication every three-year period.
Our other operating companies are subject to the New EIT at a uniform rate of 25%. The preferential treatment of high and new technology enterprise or HNTE, is subject to a reapplication every three-year period.
The process is generally planned in two steps: first to introgress the traits into partners parental lines and conduct field tests to confirm efficacy; once the results are confirmed and meet the expectations, then we enter into the second step which involves negotiation of a commercial agreement to define rights and benefit sharing.
The process is generally planned in two steps: first to introgress the traits into partners parental lines and conduct field tests to confirm efficacy; once the results are confirmed and meet the expectations, then we enter into the second step which involves negotiation of a commercial agreement to define rights and benefit sharing. 40 Table of Contents With regards to the licensed GM varieties, we have entered into a strategic cooperation agreement with the China Academy of Agriculture Science, or CAAS, to work on biotechnology research and development.
It is a fundamental fact that to get the highest yield of production with the least input on the land from fertilizers and pesticides, the seed industry will need to breed super varieties that are pest and disease resistant as well as drought and salt tolerant.
We believe that GM food crop seeds in time will be approved by MARA for production and sale and will be accepted in the Chinese market over time. 39 Table of Contents It is a fundamental fact that to get the highest yield of production with the least input on the land from fertilizers and pesticides, the seed industry will need to breed super varieties that are pest and disease resistant as well as drought and salt tolerant.
The principal difference among the classes is the reporting obligation to the relevant agricultural administration. The testing of agricultural GMO will normally go through three stages; restricted field testing, enlarged field testing and productive testing.
The testing of agricultural GMO will normally go through three stages; restricted field testing, enlarged field testing and productive testing.
In September, 2020, the Standard Testing Method and Procedures of the Company’s two GMO corn seed traits were approved in a newly 40 Table of Contents published National Standards Catalog by MARA.
In September, 2020, the Standard Testing Method and Procedures of the Company’s two GMO corn seed traits were approved in a newly published National Standards Catalog by MARA. The traits that received the National Testing Standard approval are GH5112E-117C, the Company’s double stack of insect resistance and herbicide tolerance corn and G1105E-823, the Company’s herbicide tolerance corn.
As of September 30, 2021, BC-TID has invested a total of RMB137.7 million ($20.2 million) as part of the agreement. The deal documents have been completed by both Origin and BC-TID and have been submitted to government officials for final approval, which continues to be pending due to the Covid-19 pandemic and BC-TID’s internal process.
As of September 30, 2022, BC-TID has invested a total of RMB137.7 million ($20.2 million) as part of the agreement. The deal documents have been completed by both Origin and BC-TID and have been approved by government officials.
The GMO Regulations govern the research, experiment, production, processing, marketing, import and export of agricultural genetically modified organisms (“GMO”) in China. The GMO Regulations classified agricultural genetically modified organisms, or GMO, into Classes I, II, III and IV according to the extent of their risks to human beings, animals, plants, microorganisms and the ecological environment.
The GMO Regulations classified agricultural genetically modified organisms, or GMO, into Classes I, II, III and IV according to the extent of their risks to human beings, animals, plants, microorganisms and the ecological environment. The principal difference among the classes is the reporting obligation to the relevant agricultural administration.
The Company also sees this as a validation of the germplasm (seed bank) of owned by the Company and its research capabilities. We also face competition from the large multinational companies, including Pioneer (DuPont), Monsanto and Syngenta. These companies present a formidable competitive threat because of their financial resources, the high quality of their seed products, and biotechnological capabilities.
We also face competition from the large multinational companies, including Pioneer (DuPont), Monsanto and Syngenta. These companies present a formidable competitive threat because of their financial resources, the high quality of their seed products, and biotechnological capabilities. These companies will present significant competition in the international market context and increasingly will present a competitive position within the China market.
Much of the genetically-modified product research remains at the academic level. The majority of the largest crop seed companies have been in existence for considerably longer periods of time than we have, and though they have breeding techniques, they are somewhat entrenched in their ways.
The majority of the largest crop seed companies have been in existence for considerably longer periods of time than we have, and though they have breeding techniques, they are somewhat entrenched in their ways. Some of these larger entities are evolved state owned enterprises and some stayed as state-owned entities.
However, any enterprises established before the promulgation of the New EIT law in 2008 that were entitled to preferential tax treatments for a fixed period continued to be entitled to such preferential tax treatment until the expiration of those periods.
However, any enterprises established before the promulgation of the New EIT law in 2008 that were entitled to preferential tax treatments for a fixed period continued to be entitled to such preferential tax treatment until the expiration of those periods. 44 Table of Contents The applicable tax rate under the new EIT law to Beijing Origin is 15% since January 1, 2008, because Beijing Origin has been approved as new technology enterprises and enjoys the reduced New EIT rate of 15%.
Having a subsidiary and operations in Hainan will allow us to conduct research during the winter period. Origin Biotechnolgy holds 49% of Hainan Aoyu and Origin State Harvest holds the 51% balance of ownership through a VIE arrangement. Also in 2022 we founded a US subsidiary OAL SMY Limited in New Jersey, which has conducted limited operations.
In 2022, we registered Hainan Aoyu in Hainan province which is located in the tropical region of China. Having a subsidiary and operations in Hainan will allow us to conduct research during the winter period. Origin State Harvest holds the 100% ownership of Hainan Aoyu through a VIE arrangement.
This arrangement is now terminated. In September 2017, Origin entered into a commercial license and collaboration agreement with KWS SAAT SE (“KWS”). KWS is a global seed company, active in the business of maize, sugar beet and cereal seed production and marketing, as well as research and development in plant breeding.
KWS is a global seed company, active in the business of maize, sugar beet and cereal seed production and marketing, as well as research and development in plant breeding.
Because of our extensive network of seed-producing farmers, we have consistently been able to bring new products to the market within a short period of time. Other seed companies often take an additional season or more to bring an approved product to the market, which can be a significant disadvantage for other companies.
Because of our extensive network of seed-producing farmers, we have consistently been able to bring new products to the market within a short period of time.
The MARA’s grant program was established to award achievement in agricultural technology innovation and to speed up the technology’s applications in agriculture production. The grant award of Origin’s two GMO traits not only validates the success of our past research efforts but also shows the government’s strong support of GMO research and product development in China.
The grant award of Origin’s two GMO traits not only validates the success of our past research efforts but also shows the government’s strong support of GMO research and product development in China. Recently, the Ministry of Agriculture has taken a number of steps to encourage the GMO industry.
Other international intellectual property rights that we may have are not significant to our business at this time. We currently have twenty Chinese patents registered with the State Intellectual Property Office (“SIPO”) and with similar government offices in various countries related to our seed products.
We currently have twenty Chinese patents registered with the State Intellectual Property Office (“SIPO”) and with similar government offices in various countries related to our seed products. Among these twenty patents, seventeen patents are registered in China, and one in each in the United States, Brazil and Argentina.
Licensed Seed Products We signed research agreements with domestic seed companies to incorporate certain Origin Beijing biotech traits into their leading seed varieties in a similar relationship as we have developed with the multinational seed companies.
In addition, we currently have thirty-one Chinese trademarks registered with the Trademark Office of China’s State Administration for Industry and Commerce (“SAIC”). Licensed Seed Products We signed research agreements with domestic seed companies to incorporate certain traits into their leading seed varieties in a similar relationship as we have developed with the multinational seed companies.
To gain control over those companies that Origin may not fully own, State Harvest (China) entered into a stock consignment agreement with shareholders of those companies or, the parent of those entities.
Moreover, if we engage in the research and development of genetically modified seed products, then foreign entities are not currently permitted to own any of the seed production company. To gain control over those companies that Origin may not fully own, State Harvest entered into a stock consignment agreement with shareholders of those companies or, the parent of those entities.
Some of these larger entities are evolved state owned enterprises and some stayed as state-owned entities. We compete within this group on the basis of our consistent product quality, brand identity, customer and technical support, enforcement of our intellectual property rights and a pipeline of proprietary products.
We compete within this group on the basis of our consistent product quality, brand identity, customer and technical support, enforcement of our intellectual property rights and a pipeline of proprietary products. The local seed companies in China, in many respects, are the legacy of a centrally planned agricultural economy.
Recently, the Ministry of Agriculture has taken a number of steps to encourage the GMO industry. Of primary importance is that passage of a new law with regard to hybrid seed approvals. As a result of the law change, three new corn traits have received biosafety certificate approvals in December of 2021.
Of primary importance is that passage of a new law with regard to hybrid seed approvals. As a result of the law change, three new corn traits have received biosafety certificate approvals in December of 2021. Overall, the renewed government activity with regards to GM biosafety certificate approvals is very positive after a decades-long pause in biosafety certificates approvals.
This method will be the national standard for testing procedures for these traits in future variety development and commercialization. During the third fiscal quarter of 2020, the Company was awarded an RMB6.5 million (US$0.95 million) grant from MARA for the successful evaluation of the effects of two of its GMO corn traits, GH5112E-117C and G1105E-823.
During the third fiscal quarter of 2020, the Company was awarded an RMB6.5 million (US$0.95 million) grant from MARA for the successful evaluation of the effects of two of its GMO corn traits, GH5112E-117C and G1105E-823. The MARA’s grant program was established to award achievement in agricultural technology innovation and to speed up the technology’s applications in agriculture production.
In addition to the Seed Law, China regulates the seed and plants through a series of other laws, including the Plant Quarantine Law, Administrative License Law, Administrative Penalties Law, Plant Varieties Law (PVP) and Genetically Modified Organisms Safety Law. Local provincial laws may also apply but these vary from province to province.
Initial emphasis is expected to be for soybeans and corn used as raw materials for biomass. In addition to the Seed Law, China regulates the seed and plants through a series of other laws, including the Plant Quarantine Law, Administrative License Law, Administrative Penalties Law, Plant Varieties Law (PVP) and Genetically Modified Organisms Safety Law.
As was often the case with planned economies, these extensions of the bureaucracy had no profit motive, and no incentive to improve efficiencies, increase sales or innovate with new products. Market expansion was limited by the tight geographic boundaries within which they were designed to operate.
Most of these companies were affiliated with county governments, which played a role in determining what crops would be grown and by whom. As was often the case with planned economies, these extensions of the bureaucracy had no profit motive, and no incentive to improve efficiencies, increase sales or innovate with new products.
Our principal executive offices are located at No. 21 Sheng Ming Yuan Road, Changping District, Beijing 102206, China, and our telephone number is (86-10) 5890-7588. B. Business Overview. Overview Origin Agritech Limited, along with its subsidiaries, is focused on agricultural biotechnology, operating in the PRC. Our seed research and development activities specialize in crop seed breeding and genetic improvement.
Overview Origin Agritech Limited, along with its subsidiaries, is focused on agricultural biotechnology, operating in the PRC. Our seed research and development activities specialize in crop seed breeding and genetic improvement.
We also face competition from the counterfeiting of corn seeds, which has become an increasing problem in China. We believe we possess a competitive technology base, including the capability to develop genetically modified seeds. However, there is little public information in this regard and, as a result, other companies’ internal research pipelines remain largely unknown.
We also face competition from the counterfeiting of corn seeds, which has become an increasing problem in China, notwithstanding the efforts of the government to step up intellectual property protection. We believe we possess a competitive technology base, including the capability to develop genetically modified seeds.
These companies will present significant competition in the international market context and increasingly will present a competitive position within the China market. These companies are investing in research within China and development of seeds that can be planted in China using GM traits and are engaged in many joint venture projects.
These companies are investing in research within China and development of seeds that can be planted in China using GM traits and are engaged in many joint venture projects. The multinational seed companies rely heavily on GM seed products in the non-PRC markets. GM seed products have only begun to be accepted in China.
From the beginning of 2020 to date, our capital expenditures consisted primarily of construction and purchase of plant and equipment, which are located in the PRC. We didn’t have any major capital expenditures during fiscal 2022 as we believe that our existing facilities are adequate to conduct our current and foreseeable future business operations.
From the beginning of 2020 to date, our capital expenditures consisted primarily of construction and purchase of plant and equipment, which are located in the PRC. We started the construction project of Shihezi grain drying and storage factory during fiscal 2023.
As part of the agreement, the Company transferred its seed 39 Table of Contents business of Beijing Origin to Beijing Origin State Harvest Biotechnology Limited (Origin Biotechnology), which is the Company’s wholly owned entity in China. In 2022, we registered Hainan Aoyu in Hainan province which is located in the tropical region of China.
The cash amount was used to repay the bank loan of the Company on the headquarters building and provide working capital. As part of the agreement, the Company transferred its seed business of Beijing Origin to Beijing Origin State Harvest Biotechnology Limited (Origin Biotechnology), which is the Company’s wholly owned entity in China.
Also, the termination of one shareholder’s consignment agreement does not cause the termination of any of other consignment agreement, so it may only result in a reduction in consigned shares under the consignee’s control. 48 Table of Contents The following is a table of the parties to the consignment agreements of the Company: ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Shares PRC Operating Company ​ Consigning Owner ​ Consigned Beijing Origin Gengchen Han 24.99 % ​ Yasheng Yang 20.83 % ​ Liang Yuan 18.74 % ​ Yuping Zhao 2.9 % ​ Weidong Zhang 2.27 % ​ Weicheng Chen 1.42 % ​ ​ ​ 71.16 % ​ Technical Service Agreements All of the intellectual property rights of the Company are held by Origin Biotechnology, some of which are pursuant to technical service agreements dated December 25, 2004, and similar arrangements.
The following is a table of the parties to the consignment agreements of the Company: ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Shares PRC Operating Company ​ Consigning Owner ​ Consigned Hainan Aoyu Gengchen Han 99 % ​ ​ Dezhi Deng ​ 1 % ​ ​ ​ 100 % ​ 48 Table of Contents Technical Service Agreements All of the intellectual property rights of the Company are held by Origin Biotechnology, some of which are pursuant to technical service agreements dated December 25, 2004, and similar arrangements.
The Guideline aligns MARA’s technical guidance with recently updated “Administrative Measures for the Safety Assessment of Agricultural GMOs,” which came into force originally on June 30, 2023. The Guideline applies to bio-safety certificate application for both domestic production (cultivation) and importation as processing materials.
On July 22, 2022, MARA published a revised “Guideline for Safety Assessment of Genetically Modified (GM) Plants” (the “Guideline”) for public comments. The Guideline aligns MARA’s technical guidance with recently updated “Administrative Measures for the Safety Assessment of Agricultural GMOs,” which came into force originally on June 30, 2023.
Two local companies, Beijing DaBeiNong Biotechnology Co. Ltd. and Yuan LongPing High-Tech agriculture Co., Ltd. have received biosafety certificates for their corn traits, which may become competitors in the future. The Company, however, has entered into an 42 Table of Contents agreement with DaBeiNong to explore the combining of their traits with our germplasm for an enhanced GM corn product.
Also, for the most part they do not have research and development programs for new seeds, effective marketing, advertising, technical support or customer service operations. 41 Table of Contents Two local companies, Beijing DaBeiNong Biotechnology Co. Ltd. and Yuan LongPing High-Tech agriculture Co., Ltd. have received biosafety certificates for their corn traits, which may become competitors in the future.
Notwithstanding, the government approvals, GM food products continue to face a low level of public acceptance. We believe that GM food crop seeds in time will be approved by MARA for production and sale and will be accepted in the Chinese market over time.
Notwithstanding, the government approvals, GM food products continue to face a low level of public acceptance.
Seed GMO Safety Regulations The Chinese government published Regulations on Administration of Agricultural Genetically Modified Organisms Safety in December 2011 and the regulations were updated in October 2017 (the “GMO Regulations”). On July 22, 2022, MARA published a revised “Guideline for Safety Assessment of Genetically Modified (GM) Plants” (the “Guideline”) for public comments.
Other seed companies often take an additional season or more to bring an approved product to the market, which can be a significant disadvantage for other companies. 43 Table of Contents Seed GMO Safety Regulations The Chinese government published Regulations on Administration of Agricultural Genetically Modified Organisms Safety in December 2011 and the regulations were updated in October 2017 (the “GMO Regulations”).
The traits that received the National Testing Standard approval are GH5112E-117C, the Company’s double stack of insect resistance and herbicide tolerance corn and G1105E-823, the Company’s herbicide tolerance corn. As part of the approval process, the traits were tested and reviewed by third-party institutes appointed by the MARA.
As part of the approval process, the traits were tested and reviewed by third-party institutes appointed by the MARA. This method will be the national standard for testing procedures for these traits in future variety development and commercialization.
The majority of these local companies continue to lack the scale and the resources to compete with us in a number of ways. Principally, they lack access to the improved, proprietary hybrids. Also, for the most part they do not have research and development programs for new seeds, effective marketing, advertising, technical support or customer service operations.
Market expansion was limited by the tight geographic boundaries within which they were designed to operate. The majority of these local companies continue to lack the scale and the resources to compete with us in a number of ways. Principally, they lack access to the improved, proprietary hybrids.
Overall, the renewed government activity with regards to GM biosafety certificate approvals is very positive after a decades-long pause in biosafety certificates approvals. Also, in December 2021, the Ministry of Agriculture published GMO corn and soybean variety approval procedures and standards which cleared the last regulatory obstruction in China.
Also, in December 2021, the Ministry of Agriculture published GMO corn and soybean variety approval procedures and standards which cleared the last regulatory obstruction in China. In June 2022, the Chinese National Crop Variety Approval Committee released two standards that should clear the path for cultivating genetically modified (GM) crops in the country.
Removed
Both sides have agreed to extend the closing deadline to be before February2024.The cash amount was used to repay the bank loan of the Company on the headquarters building and provide working capital.
Added
With the closing of this deal in August 2023, BC - TID and Beijing Origin State Harvest Biotechnology Limited (Origin Biotechnology) own 51% and 47% of Beijing Origin, respectively. Beijing Origin also has transferred all of its ownership of Xinjiang Originbo to Hainan Aoyu during fiscal 2023.
Removed
Among these twenty patents, seventeen patents are registered in China, and one in each in the United States, Brazil and Argentina. In addition, we currently have thirty-one Chinese trademarks registered with the Trademark Office of China’s State Administration for Industry and Commerce (“SAIC”).
Added
Also in 2022 we founded a US subsidiary OAL SMY Limited in New Jersey, which has conducted limited operations. In 2023, we entered into regional joint venture for corn supply chain and Nutrition Enhanced Corn (NEC) grow - by - contract business. The joint venture is Baodao Origin in Henan province.
Removed
With regards to the licensed GM varieties, we have entered into a strategic cooperation agreement with the China Academy of Agriculture Science, or CAAS, to work on biotechnology research and development.
Added
Origin indirectly holds 51% of the joint venture and the remaining equity interest is held by a feed process enterprise. Our principal executive offices are located at No. 21 Sheng Ming Yuan Road, Changping District, Beijing 102206, China, and our telephone number is (86-10) 5890-7588. B. Business Overview.
Removed
The local seed companies in China, in many respects, are the legacy of a centrally planned agricultural economy. Most of these companies were affiliated with county governments, which played a role in determining what crops would be grown and by whom.
Added
Pursuant to the license, the Company and DuPont would jointly develop new seeds for Chinese farmers. This arrangement is now terminated. In September 2017, Origin entered into a commercial license and collaboration agreement with KWS SAAT SE (“KWS”).
Removed
The multinational seed companies rely heavily on GM seed products in the non-PRC markets. GM seed products have only begun to be accepted in China. The extent of future acceptance of GM products is not yet determinable, although there are positive regulatory signs.
Added
These are a "safety certificate" and a "variety approval" before crops can be commercially cultivated. Of particular importance is the "variety approval." The Company believes that since variety approval hurdle has been cleared, commercialization of genetically modified crops in China is a real possibility.
Removed
The law is expected to boost the commercialization and standardization of genetically modified (GM) germplasm. Initial emphasis is expected to be for soybeans and corn used as raw materials for biomass.
Added
Other international intellectual property rights that we may have are not significant to our business at this time. It is common in the seed industry at present that smaller seed companies will slightly modify seed products and pass them off as their own.
Removed
The applicable tax rate under the new EIT law to Beijing Origin is 15% since January 1, 2008, because Beijing Origin has been approved as new technology enterprises and enjoys the reduced New EIT rate of 15%. Our other operating companies are subject to the New EIT at a uniform rate of 25%.
Added
We believe that the government is increasingly concerned about this as part of its drive to protect the country food supply and is taking a more robust approach to protecting the intellectual property rights of seed producers.
Removed
The following diagram illustrates our current organizational structure as of September 30, 2022. (1) We are in the process of restructuring Beijing Origin Seed Limited based on the joint venture agreement with BC-TID.
Added
We continue to cooperate with the Institute of Biotechnology of the Chinese Academy of Agricultural Sciences to promote the safety declaration of drought - resistant transgenic corn event NAZ - 4. At present, we have completed all the relevant experimental work required for the production experiment of the GM safety declaration and submitted the application in November 2023.
Removed
Currently, we have direct ownership interest of 27.36% in Beijing Origin Seed Limited through State Harvest Holdings Limited, and we have an additional interest of 71.16% in Beijing Origin Seed Limited through State Harvest Holdings Limited under a series of stock consignment agreements with the respective shareholders of Beijing Origin Seed Limited.
Added
Meanwhile we continue to integrate the drought resistance characteristics of this event into the Origin corn inbred line through backcross breeding technology, It is expected to obtain the first batch of drought - resistant transgenic corn hybrids in 2024.
Removed
Our total financial interest in Beijing Origin is 98.52%.
Added
In terms of insect - resistant and herbicide - tolerant transgenic corn, BFL4 - 2, an insect - resistant and herbicide - tolerant transgenic corn developed in cooperation with the Chinese Academy of Agricultural Sciences, it has recently obtained a safety certificate.
Removed
Moreover, if we engage in the research and development of genetically modified seed products, then foreign entities are not currently permitted to own any of the seed production company.
Added
At the same time, Origin has integrated the insect - resistant and herbicide - tolerant corn inbred line and completed seed production in Sanya, Hainan in the winter of 2022.
Added
In May 2023, it participated in the production experiment of the approved new insect - resistant and herbicide - tolerant transgenic corn varieties organized by the Ministry of Agriculture and Rural Affairs. It is expected to obtain the approval certificates of new transgenic corn varieties in 2024, and introduce these products into market in 2024 or 2025.
Added
At the same time, DBN9953 and three others events developed in cooperation with Dabeinong Biotechnology Co., Ltd. continue to integrate the traits of insect resistance and herbicide tolerance of the three events into corn inbred lines of Origin by using backcross breeding technology and molecular marker technology.
Added
The corn inbred line with integrated insect - resistant and herbicide - tolerant traits has completed hybrid seed production in Hainan in the winter of 2022. In May 2023, it participated in the production experiment of insect - resistant and genetically modified corn variety approval organized by the Ministry of Agriculture and Rural Affairs.
Added
It is expected to obtain the new variety approval certificate of genetically modified corn in 2024, and enter market in 2024 or 2025.
Added
In terms of corn gene editing, since Origin has set up the corn gene editing experimental platform in 2017, we have been committed to creating nutrition - enhanced corn (NEC) and improving the traits of corn plant height.
Added
At present, the laboratory has created a number of gene - editing corn transformation events such as high lutein, high lysine, high sterol, stem dwarfing and extension of growth period. These events are under laboratory verification and field experiment verification.
Added
However, there is little public information in this regard and, as a result, other companies’ internal research pipelines remain largely unknown. Much of the genetically-modified product research remains at the academic level.
Added
The Company, however, has entered into an agreement with DaBeiNong to explore the combining of their traits with our germplasm for an enhanced GM corn product. The Company also sees this as a validation of the germplasm (seed bank) of owned by the Company and its research capabilities.
Added
Of particular importance is the expansion of the scope of protection for new plant variety rights and the enhancing of protection mechanisms. The seed law extends the scope of protecting the rights to a new variety from propagation to harvest from the unauthorized use of the protected seed.
Added
Protected activities have been expanded from "production, propagation, and sales" to "production, propagation, processes supporting propagation, sales offers, marketing, import, export, or storage in support of the above," etc. In this way, protection of the rights to new varieties can be implemented at every stage of the supply chain.
Added
The seed law, however, stipulates that if the owner of new variety rights has had a reasonable opportunity to exercise rights over the seed, it may no longer exercise rights over the harvested crops. The seed law has increased efforts to crack down on infringement of the rights to new plant varieties.
Added
The amount of punitive damages for intentional infringement of the rights to a new plant variety has been increased.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

55 edited+7 added−35 removed54 unchanged
Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events in the period from October 1, 2021, to September 30, 2022, that were reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions, or that had the trends relating to the current-year increases in expenses and reduction in revenues and profits.
Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events in the period from October 1, 2022, to September 30, 2023, that were reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions, or that had the trends relating to the current-year increases in expenses and reduction in revenues and profits.
A valuation allowance would be provided for those deferred tax assets if it is more likely than not that the related benefit will not be realized. A full valuation allowance has been established against all net deferred tax assets as of September 30, 2021 and 2022 based on our estimates of recoverability.
A valuation allowance would be provided for those deferred tax assets if it is more likely than not that the related benefit will not be realized. A full valuation allowance has been established against all net deferred tax assets as of September 30, 2022 and 2023 based on our estimates of recoverability.
The borrowings as of September 30, 2022 is an loan from the BC-TID and will be converted to the equity of the joint venture being formed between the Company and BC-TID. The transactions documentation for which has been completed and submitted to government officials for approval. Excluding the borrowings from BC-TID, the Company doesn’t have any other financial debt.
The borrowings as of September 30, 2023 is an loan from the BC-TID and will be converted to the equity of the joint venture being formed between the Company and BC-TID. The transactions documentation for which has been completed and submitted to government officials for approval. Excluding the borrowings from BC-TID, the Company doesn’t have any other financial debt.
Stock-based compensation We adopted FASB ASC 718-10, to measure our issued share options based on the grant-date fair value of the options and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. We adopt the Black-Scholes Model to value the fair value of the share options.
Stock-based compensation We adopted FASB ASC 718-10, to measure our issued share options based on the grant-date fair value of the options and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. We used the Black-Scholes Model to value the fair value of the share options.
Our independent auditors have issued their opinion with the qualification that there is a substantial doubt as to our ability to continue as a going concern. 60 Table of Contents C. Research and Development, Patents and Licenses, etc. We focus our research and development efforts on biotechnology, crop breeding and the development of new crop seeds.
Our independent auditors have issued their opinion with the qualification that there is a substantial doubt as to our ability to continue as a going concern. C. Research and Development, Patents and Licenses, etc. We focus our research and development efforts on biotechnology, crop breeding and the development of new crop seeds.
At the same time, DBN9953 and other three events in cooperation with Dabeinong Biotechnology Co., Ltd. continue to integrate the traits of insect resistance and herbicide tolerance of the three events into corn inbred lines of Origin by using backcross breeding technology and molecular marker technology.
At the same time, DBN9953 and other three events have been developed in cooperation with Dabeinong Biotechnology Co., Ltd. that continue to integrate the traits of insect resistance and herbicide tolerance of the three events into corn inbred lines of Origin by using backcross breeding technology and molecular marker technology.
The corn inbred line with integrated insect-resistant and herbicide-tolerant traits has completed hybrid seed production in Hainan in the winter of 2022. In May 2023, it will participate in the productive experiment of insect-resistant and genetically modified corn variety approval organized by the Ministry of Agriculture and Rural Affairs.
The corn inbred line with integrated insect-resistant and herbicide-tolerant traits has completed hybrid seed production in Hainan in the winter of 2022. In May 2023, it participated in the production experiment of insect-resistant and genetically modified corn variety approval organized by the Ministry of Agriculture and Rural Affairs.
The safe harbor provided in Section 27A of the Securities Act and Section 21E of the Exchange Act shall apply to all forward-looking information provided in this Item 5. 61 Table of Contents
The safe harbor provided in Section 27A of the Securities Act and Section 21E of the Exchange Act shall apply to all forward-looking information provided in this Item 5.
Rental income and other non-operating income (expenses), net The company received rental income for its headquarters building of RMB10.6 million (US$1.5million) and incurred other non-operating income of RMB15.7 million (US$2.2 million) during the fiscal year ended September 30, 2022. For the year ended September 30, 2021, the rental income was RMB10.6 million and the other non-operating expenses were RMB14.9 million.
Rental income and other non-operating income (expenses), net The company received rental income for its headquarters building of RMB10.6 million (US$1.5million) and incurred other non-operating income of RMB69.7 million (US$9.7 million) during the fiscal year ended September 30, 2023. For the year ended September 30, 2022, the rental income was RMB10.6 million and the other non-operating expenses were RMB15.7 million.
We established our southern breeding center in Hainan, China in 2002 and started biotechnology center at the same location in 2010. We have established technological cooperative relationships with five universities and sixteen research institutes in China, including Zhejiang University, China Agricultural University, Chinese Academy of Agricultural Sciences, the National Maize Improvement Center, and Henan Agriculture University. D. Trend Information .
We established our southern breeding center in Hainan, China in 2002 and started biotechnology center at the same location in 2010. 58 Table of Contents We have established technological cooperative relationships with five universities and sixteen research institutes in China, including Zhejiang University, China Agricultural University, Chinese Academy of Agricultural Sciences, the National Maize Improvement Center, and Henan Agriculture University.
In 2020-2021, we have seen encouraging signs of greater acceptance of GM crop seeds at the government level. For this reason we continue to pursue biotechnology seed development and invest in genetic modification programs that focus on improving yields, product quality, and insect resistance and disease tolerance for corn seeds and other selected crop seeds.
We believe there are encouraging signs of greater acceptance of GM crop seeds at the government level. For this reason we continue to pursue biotechnology seed development and invest in genetic modification programs that focus on improving yields, product quality, and insect resistance and disease tolerance for corn seeds and other selected crop seeds.
It is expected to obtain the new variety approval certificate of genetically modified corn by the end of 2023, and enter market in 2024. In terms of corn gene editing, since Origin has set up the corn gene editing experimental platform in 2017, we have been committed to creating nutrition-enhanced corn (NEC) and improving the traits of corn plant height.
It is expected to obtain the new variety approval certificates of genetically modified corn in 2024, and enter market in 2024 or 2025. In terms of corn gene editing, since Origin has set up the corn gene editing experimental platform in 2017, we have been committed to creating nutrition-enhanced corn (NEC) and improving the traits of corn plant height.
The Company consistently reviews its working capital requirements. Despite the Company’s effort to obtain additional funding and reduce operating costs, there is no assurance that the Company’s plans and actions will be successful. In addition, there can be no assurance that in the event additional sources of funds are needed they will be available on acceptable terms, if at all.
Despite the Company’s effort to obtain additional funding and reduce operating costs, there is no assurance that the Company’s plans and actions will be successful. In addition, there can be no assurance that in the event additional sources of funds are needed they will be available on acceptable terms, if at all.
E. Off-balance Sheet Arrangements . We do not have any off-balance sheet guarantees, interest rate swap transactions or foreign currency forward contracts or outstanding derivative financial instruments. We do not engage in trading activities involving non-exchange traded contracts. F. Tabular Disclosure of Commitments and Contingencies . We have various contractual obligations that will affect our liquidity.
E. Off-balance Sheet Arrangements . We do not have any off-balance sheet guarantees, interest rate swap transactions or foreign currency forward contracts or outstanding derivative financial instruments. We do not engage in trading activities involving non-exchange traded contracts. F. Tabular Disclosure of Commitments and Contingencies .
Accumulated deficit was RMB650.6million and RMB656.9million (US$92.5 million) as of September 30, 2021 and 2022, respectively. On May 17, 2019, the Company entered into a Cooperation Framework Agreement with Beijing Changping Technology Innodevelop Group (BC-TID), an entity owned by the government of Changping District of Beijing City.
Accumulated deficit was RMB656.9 million and RMB545.5 million (US$76 million) as of September 30, 2022 and 2023, respectively. On May 17, 2019, the Company entered into a Cooperation Framework Agreement with Beijing Changping Technology Innodevelop Group (BC-TID), an entity owned by the government of Changping District of Beijing City.
In 2022, we will continue to cooperate with the Institute of Biotechnology of the Chinese Academy of Agricultural Sciences to promote the safety declaration of drought-resistant transgenic corn event NAZ-4. At present, we have completed all the relevant experimental work required for the production experiment of the GM safety declaration.
In 2022, we continued to cooperate with the Institute of Biotechnology of the Chinese Academy of Agricultural Sciences to promote the safety declaration of drought-resistant transgenic corn event NAZ-4. We have completed all the relevant experimental work required for the production experiment of the GM safety declaration and submitted the application in November 2023.
It is expected to apply for the safety certificate in March 2023, and continue to integrate the drought resistance characteristics of this event into the Origin corn inbred line through backcross breeding technology, It is expected to obtain the first batch of drought-resistant transgenic corn hybrids in 2024.
Meanwhile we continue to integrate the drought resistance characteristics of this event into the Origin corn inbred line through backcross breeding technology, It is expected to obtain the first batch of drought-resistant transgenic corn hybrids in 2024.
Net cash used in investing activities was RMB1.1 million (US$ 0.2 million) for the fiscal year ended September 30, 2022, compared with net cash provided by investing activities of RMB1.2 million for the fiscal year ended September 30, 2021.
Net cash used in investing activities was RMB11.2 million (US$ 1.6 million) for the fiscal year ended September 30, 2023, compared with net cash used in investing activities of RMB1.1 million for the fiscal year ended September 30, 2022.
The increase in revenues was mainly due to the re-open of our Xinjiang facility and the good market performance of our new hybrids. Operating expenses Total operating expenses from continuing operations for the fiscal year ended September 30, 2022 were RMB29.1 million (US$4.1 million), compared to the operating expenses of RMB150.7 million in fiscal year 2021.
The increase in revenues was mainly due to the re-open of our Xinjiang facility, the good market performance of our new hybrids. Operating expenses Total operating expenses for the fiscal year ended September 30, 2023 were RMB32.2 million (US$4.5 million), compared to the operating expenses of RMB29.1 million in fiscal year 2022.
The molecular characteristics, field efficacy of insect resistance and herbicide tolerance traits, agronomic performance, environmental safety, food safety of the transgenic event were thoroughly evaluated. These results meet the standards of the government GM regulations.
The molecular characteristics, field efficacy of insect resistance and herbicide tolerance traits, agronomic performance, environmental safety, food safety of the transgenic event were thoroughly evaluated. These results meet the standards of the government GM regulations. The summary of these results has been submitted to the Chinese Government for safety certificate (phase 5).
During fiscal year 2022, net cash used in operating activities was RMB3.3 million (US$0.5 million), compared with net cash used in operating activities RMB 25.1 million for the fiscal year ended September 30, 2021.
During fiscal year 2023, net cash provided by operating activities was RMB5.5 million (US$0.76 million), compared with net cash used in operating activities RMB 3.3 million for the fiscal year ended September 30, 2022.
The increase in revenues was mainly due to the re-opening of our Xinjiang facility and the good market performance of our new hybrids.Total operating expenses from continuing operations for the fiscal year ended September 30, 2022 were RMB29.1 million (US$4.1 million), compared to the operating expenses of RMB150.7 million in fiscal year 2021.
The increase in revenues was mainly from our Xinjiang facility, the good market performance of our new hybrids and investment income from subsidiary disposal.Total operating expenses from continuing operations for the fiscal year ended September 30, 2023 were RMB32.2 million (US$4.5 million), compared to the operating expenses of RMB29.1 million in fiscal year 2022.
Net cash used in financing activities was RMB0.3 million for the fiscal year ended September 30, 2022, compared with net cash provided by financing activities of RMB19.8 million for the fiscal year ended September 30, 2021. The Company raised $1.55 million from the sale of 201,000 ordinary shares during the fiscal year ended September 30, 2022.
Net cash provided by financing activities was RMB22.9 million for the fiscal year ended September 30, 2023, compared with net cash used in financing activities of RMB0.3 million for the fiscal year ended September 30, 2022. The Company raised $2.73 million from the sale of 320,000 ordinary shares during the fiscal year ended September 30, 2023.
Results of Operations Fiscal Year ended September 30, 2022, compared to Fiscal Year ended September 30, 2021 Revenues For the fiscal year ended September 30, 2022, revenue was RMB52.6 million (US$7.4 million), compared to RMB46.4 million for the fiscal year ended September 30, 2021.
Results of Operations Fiscal Year ended September 30, 2023, compared to Fiscal Year ended September 30, 2022 Revenues For the fiscal year ended September 30, 2023, revenue was RMB93.3 million (US$13 million), compared to RMB52.6 million for the fiscal year ended September 30, 2022.
A total of 201,000 ordinary shares were issued for this equity financing. Besides aforementioned cash inflows, the Company is also seeking funds from other resources including but not limited to licensing its core seed traits to its customers, applying for more government grants for research and development activities, pursuing other capital investment from investors and selling certain company assets.
Besides the aforementioned cash inflows, the Company is also seeking funds from other resources including but not limited to licensing its core seed traits to its customers, applying for more government grants for research and development activities, pursuing other capital investment from investors and selling certain company assets. The Company consistently reviews its working capital requirements.
Net cash provided by investing activities was RMB1.1 million (US$0.2 million) for the fiscal year ended September 30, 2022, compared with net cash provided by investing activities of RMB1.2 million for the fiscal year ended September 30, 2021.
Net cash used in investing activities was RMB11.2 million (US$1.6 million) for the fiscal year ended September 30, 2023, compared with net cash used in investing activities of RMB1.1 million for the fiscal year ended September 30, 2022.
The following table shows our cash flows with respect to operating activities, investing activities and financing activities for the 12 months ended September 30, 2020, 2021, and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ Item 2020 2021 2022 2022 (In thousands) RMB RMB RMB US$ Net cash used in operating activities (5,615) (25,077) 3,291 465 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by investing activities (42,243) (1,209) (1,102) (156) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities 65,918 19,838 (332) (47) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (decrease) increase in cash and cash equivalents 18,060 (6,448) 1,857 262 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, beginning of year 3,198 22,482 15,351 2,162 ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash and cash equivalents 1,371 (816) 447 63 ​ Operating activities: Net cash provided by operating activities was RMB3.3 million (US$0.5 million) during fiscal year 2022, compared with net cash used in operating activities RMB 25.1 million for the fiscal year ended September 30, 2021.
The following table shows our cash flows with respect to operating activities, investing activities and financing activities for the 12 months ended September 30, 2021, 2022, and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ Item 2021 2022 2023 2023 (In thousands) RMB RMB RMB US$ Net cash used in operating activities (25,077) 3,291 5,456 759 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by investing activities (1,209) (1,102) (11,224) (1,563) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities 19,838 (332) 22,933 3,193 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (decrease) increase in cash and cash equivalents (6,448) 1,857 6,252 869 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, beginning of year 22,482 15,351 17,669 2,461 ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash and cash equivalents (816) 447 (214) (30) ​ Operating activities: Net cash provided by operating activities was RMB 5.5 million (US$0.76 million) during fiscal year 2023, compared with net cash provided by operating activities RMB 3.3 million for the fiscal year ended September 30, 2022.
Substantial doubt about the ability to continue as going concern The Company incurred net losses from continuing operations of RMB102.8 million, RMB127.1 million and net income of RMB2.3million(US$0.33 million) in the years ended September 30, 2020, 2021 and 2022, respectively. Our working capital deficit was RMB228.2 million and RMB211.3million (US$32.1 million) as of September 30, 2021 and 2022, respectively.
Substantial doubt about the ability to continue as going concern The Company incurred net losses from continuing operations of RMB127.1million, net income of RMB2.3 million and RMB62.7 million(US$8.7 million) in the years ended September 30, 2021, 2022 and 2023, respectively. Our working capital deficit was RMB211.3 million and RMB171.6million (US$23.9 million) as of September 30, 2022 and 2023, respectively.
The grant award of Origin’s two GMO traits not only validates the success of our past research efforts but also shows the government’s strong support of GMO research and product development in China. Prior to of September 30, 2022, the Company had raised a total of $1.55 million through equity financing.
The grant award of Origin’s two GMO traits not only validates the success of our past research efforts but also shows the government’s strong support of GMO research and product development in China. For the three fiscal years 2021, 2022 and 2023, the Company had raised $2.62 million, $1.65 million and $2.73 million through equity financing.
Research and development Research and development expenses from continuing operations primarily consist of salary and compensation expenses of personnel engaged in the research and development of our proprietary crop seeds and genetically modified products, travelling expenses, depreciation of plant and equipment, and expenses paid to certain research institutes to carry out research projects on behalf of Origin during the period.
Impairment Impairment of long-term investment for the fiscal year ended September 30, 2023 was RMB 1.49 million (US$ 0.21 million) Research and development Research and development expenses from continuing operations primarily consist of salary and compensation expenses of personnel engaged in the research and development of our proprietary crop seeds and genetically modified products, travelling expenses, depreciation of plant and equipment, and expenses paid to certain research institutes to carry out research projects on behalf of Origin during the period.
Even though Origin currently does not require any such dividends, loans or advances from the PRC Operating Companies, Origin may in the future require additional cash resources from our PRC Operating Companies due to changes in business conditions, to fund future acquisitions or developments, or merely to declare and pay dividends or distributions to our shareholders, although we currently have no intention to do so.
As a result of these and other restrictions under PRC laws and regulations, our PRC Operating Companies are restricted in their ability to transfer a portion of their net assets to Origin either in the form of dividends, loans or advances. 57 Table of Contents Even though Origin currently does not require any such dividends, loans or advances from the PRC Operating Companies, Origin may in the future require additional cash resources from our PRC Operating Companies due to changes in business conditions, to fund future acquisitions or developments, or merely to declare and pay dividends or distributions to our shareholders, although we currently have no intention to do so.
Safe Harbor . Except for historical facts and financial data, the information included in Items 5.A through 5.D and 5.F is deemed to be a “forward looking statement” as that term is defined in the statutory safe harbors.
We have no other contractual obligations as of September 30, 2023 that could potentially affect our liquidity. G. Safe Harbor . Except for historical facts and financial data, the information included in Items 5.A through 5.D and 5.F is deemed to be a “forward looking statement” as that term is defined in the statutory safe harbors.
Net cash used by financing activities was RMB0.3 million for the fiscal year ended September 30, 2022, compared with net cash provided by financing activities of RMB19.8 million for the fiscal year ended September 30, 2021. The Company raised $1.55 million from the sale of 201,000 ordinary shares during the fiscal year ended September 30, 2022.
Net cash used in financing activities was RMB22.9 million for the fiscal year ended September 30, 2023, compared with net cash used in financing activities of RMB0.3 million for the fiscal year ended September 30, 2022. The Company raised $2.73 million from the sale of 320,000 ordinary shares during the fiscal year ended September 30, 2023.
Overall Analysis For the fiscal year ended September 30, 2022, revenue was RMB 52.6 million (US$7.4 million), compared to RMB46.4 million for the fiscal year ended September 30, 2021.
Overall Analysis For the fiscal year ended September 30, 2023, revenue was RMB 93.3 million (US$13 million), compared to RMB52.6 million for the fiscal year ended September 30, 2022.
During fiscal year 2022, net cash used in operating activities was RMB3.3 million (US$0.5 million), a significant improvement compared with net cash used in operating activities RMB25.1 million for the fiscal year ended September 30, 2021.
The loan is converted into equity in 2023. During fiscal year 2023, net cash used in operating activities was RMB5.5 million (US$0.76 million), compared with RMB3.3 million for the fiscal year ended September 30, 2022.
For a description of all of our significant accounting policies, see Note 2 to our consolidated financial statements. 54 Table of Contents Revenues The Company derives most of its revenues from hybrid corn seed. Prior to October 1, 2018, the Company recognized revenue in accordance with Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition (“ASC 605”).
For a description of all of our significant accounting policies, see Note 2 to our consolidated financial statements. 54 Table of Contents Revenues The Company derives most of its revenues from hybrid corn seed.
B. Liquidity and Capital Resources . As of September 30, 2022, and 2021 we had approximately RMB17.7 million (US$2.5million) and RMB15.4 million, respectively, in cash and cash equivalents for continuing operations. Total borrowings as of September 30, 2022 and 2021 were RMB137.7million (US$19.4 million) and RMB137.7 million, respectively.
As of September 30, 2023, and 2022 we had approximately RMB23.7million (US$3.3 million) and RMB17.7 million, respectively, in cash and cash equivalents for continuing operations. Total borrowings as of September 30, 2023 and 2022 were RMB-nil- and RMB137.7 million, respectively.
More than 3,000 events of the stacked traits were screened in a greenhouse environment of Phase 1-Laboratory Research. More events will be generated to meet the high standard of efficacies. In addition to the GM trait pipeline, we have also prepared for the commercialization of the key GM corn seeds.
More events will be generated to meet the high standard of efficacies. 52 Table of Contents In addition to the GM trait pipeline, we have also prepared for the commercialization of the key GM corn seeds.
Investing activities: Net cash provided by investing activities was RMB1.1 million (US$ 0.2 million) for the fiscal year ended September 30, 2022, compared with net cash provided by investing activities of RMB1.2 for the fiscal year ended September 30, 2021. 59 Table of Contents Financing activities: Net cash used by financing activities was RMB0.3 million for the fiscal year ended September 30, 2022, compared with net cash provided by financing activities of RMB19.8 million for the fiscal year ended September 30, 2021.
Investing activities: Net cash used in investing activities was RMB11.2 million (US$1.6 million) for the fiscal year ended September 30, 2023, compared with net cash used in investing activities of RMB1.1 for the fiscal year ended September 30, 2022.
Selling and marketing expenses for fiscal year 2022 were RMB7.3 million (US$1 million), fiscal year 2021 were RMB5.6 million (US$0.9 million).
Selling and marketing Selling and marketing expenses for fiscal year 2023 were RMB8.3 million (US$1.2 million), compared to RMB7.3 million in fiscal year 2022.
In terms of insect-resistant and herbicide-tolerant transgenic corn, BFL4-2, a insect-resistant and herbicide-tolerant transgenic corn cooperated with the Chinese Academy of Agricultural Sciences, has recently obtained a safety certificate. At the same time, Origin has integrated the insect-resistant and herbicide-tolerant corn inbred line of the event and completed seed production in Sanya, Hainan in the winter of 2022.
In terms of insect-resistant and herbicide-tolerant transgenic corn, BFL4-2, an insect-resistant and herbicide-tolerant transgenic corn developed in cooperation with the Chinese Academy of Agricultural Sciences, it has recently obtained a safety certificate.
As of September 30, 2022 and 2021, we had approximately RMB17.7 million (US$2.5 million) and RMB15.4 million, respectively, in cash and cash equivalents for continuing operations. Our cash and cash equivalents primarily consisted of cash on hand and short-term liquid investments with maturities of three months or less deposited with banks and other financial institutions.
Our cash and cash equivalents primarily consisted of cash on hand and short-term liquid investments with maturities of three months or less deposited with banks and other financial institutions.
The summary of these results has been submitted to the Chinese Government for safety certificate (phase 5). 52 Table of Contents Triple Stacked Traits: Stacked triple and quadruple traits of insect resistance and herbicide tolerance genes with different resistance mechanisms have been under intermediate testing. These traits are expected to increase herbicide tolerance and expand the insecticidal spectrum and durability.
Triple Stacked Traits: Stacked triple and quadruple traits of insect resistance and herbicide tolerance genes with different resistance mechanisms have been under intermediate testing. These traits are expected to increase herbicide tolerance and expand the insecticidal spectrum and durability. More than 3,000 events of the stacked traits were screened in a greenhouse environment of Phase 1-Laboratory Research.
General and administrative expenses for the fiscal year ended September 30, 2022 were RMB14.3 million (US$ 2 million), compared to RMB73.3 million year-over-year.In 2021 there was recorded a large sum for the impairment and bad debt provision that was not required for fiscal year 2022.
General and administrative expenses for the fiscal year ended September 30, 2023, were RMB14.2 million (US$1.99 million), compared to RMB14.3 million year-over-year.
A government grant, however, is expected in the 2023 fiscal year for research and development which will offset the expenses compared to 2022. 51 Table of Contents Net income from continuing operations for the fiscal year ended September 30, 2022 was RMB 2.3 million (US$ 0.33 million), compared with net loss from continuing operation of RMB127 million in fiscal year 2021.
Research and development expenses were RMB7.4 million (US$1.04 million) in fiscal year 2023, compared to RMB7.4 million in fiscal year 2022. Net income from continuing operations for the fiscal year ended September 30, 2023 was RMB62.7 million (US$ 8.7 million), compared with net income from continuing operation of RMB2.3 million in fiscal year 2022.
Net loss attributable to Origin for the fiscal year ended September 30, 2022 was RMB6.27 million (US$0.88 million), compared to the net loss of RMB91.5 million for the fiscal year ended September 30, 2021. Net loss per share was RMB1.09 or US$0.15 for the fiscal year 2022, compared with net loss per share of RMB16.29 in fiscal year 2021.
Net income per share was RMB8.45 or US$1.18 for the fiscal year 2023, compared with net loss per share of RMB1.09 in fiscal year 2022. Total assets was RMB 238.5 million for the fiscal year ended September 30, 2023, compared with 136 million for the fiscal year ended September 30, 2022.
Net Loss Net loss attributable to Origin for the fiscal year ended September 30, 2022, was RMB6.3 million (US$0.9 million), compared to the net loss of RMB91.5 million for the fiscal year ended September 30, 2021.
The increase is from investment income by subsidiary disposal. 51 Table of Contents Net loss attributable to Origin for the fiscal year ended September 30, 2023 was RMB 55.3 million (US$7.7 million), compared to the net loss of RMB6.27 million for the fiscal year ended September 30, 2022.
Loss from operations Net income from continuing operations for the fiscal year ended September 30, 2022 was RMB 2.3 million (US$ 0.33 million), compared with net loss from continuing operation of RMB127 million in fiscal year 2021. Interest expense Interest expense was RMB8.2 million (US$1.2 million) for the fiscal year 2022 compared to RMB8.6 million a year ago.
Research and development expenses were RMB7.4 million (US$1 million) in fiscal year 2023, same to fiscal year 2022. Income before income taxes Income Income before income taxes for the fiscal year ended September 30, 2023 was RMB 62.8 million (US$ 8.8 million), compared with net income from continuing operation of RMB2.3 million in fiscal year 2022.
The increase in operating expenses was mainly due to the decrease in General and Administrative expense. Selling and marketing Selling and marketing expenses for fiscal year 2022 were RMB7.3 million (US$1 million), compared to RMB5.6 million in fiscal year 2021.
Selling and marketing expenses for fiscal year 2023 were RMB8.4 million (US$1.2 million), fiscal year 2022 were RMB7.3million (US$1 million). General and administrative expenses for the fiscal year ended September 30, 2023 were RMB 14.2 million (US$ 2 million), compared to RMB14.3 million year-over-year.
Total borrowings as of September 30, 2022 and 2021 were RMB137.7million (US$19.4 million) and RMB137.7 million, respectively. The borrowings as of September 30, 2022 is an loan from BC-TID and will be converted to the equity of the joint venture being formed between the Company and BC-TID. Excluding the borrowings from BC-TID, the Company doesn’t have any other financial debt.
The borrowings as of September 30, 2022 was an loan from BC-TID and has been converted to the equity of the joint venture being formed between the Company and BC-TID. The BC-TID loan converted into equity in 2023.
According to the agreement, RMB137.7 million cash currently booked as long-term debt is an loan and will be converted to the equity for the joint venture when the JV is formed.
According to the agreement, RMB137.7 million cash booked as long-term debt was an loan and has been converted to equity for the joint venture namely Beijing Origin when the deal was completed in August 2023. And Beijing Origin has transferred all of its ownership of Xinjiang Originbo to Hainan Aoyu during fiscal 2023.
In May 2023, it will participate in the productive experiment of the approval of new insect-resistant and herbicide-tolerant transgenic corn varieties organized by the Ministry of Agriculture and Rural Affairs. It is expected to obtain the approval certificate of new transgenic corn varieties by the end of 2023, and enter market in 2024.
At the same time, Origin has integrated the insect-resistant and herbicide-tolerant corn inbred line of the event and completed seed production in Sanya, Hainan in the winter of 2022. In May 2023, it participated in the production experiment for approval of new insect-resistant and herbicide-tolerant transgenic corn varieties organized by the Ministry of Agriculture and Rural Affairs.
Total assets was RMB 136 million for the fiscal year ended September 30, 2022, compared with 119 million for the fiscal year ended September 30, 2021. As of September 30, 2022, and 2021, we had approximately RMB17.7 million (US$2.5 million) and RMB15.4 million, respectively, in cash and cash equivalents for continuing operations.
The increase is from the conversion of a controlled subsidiary into a long-term investment. As of September 30, 2023, and 2022, we had approximately RMB 23.7 million (US$3.3 million) and RMB17.7 million, respectively, in cash and cash equivalents for continuing operations. Total borrowings as of September 30, 2023 and 2022 were RMB -nil-million (US$19.4 million) and RMB137.7 million, respectively.
For the year ended September,30 2020, the rental income was RMB7.6 million and the other non-operating expenses were RMB6.7 million. 58 Table of Contents Net Loss Net loss attributable to Origin for the fiscal year ended September 30, 2021, was RMB91.5 million (US$14.1 million), compared to the net loss of RMB85.3 million for the fiscal year ended September 30, 2020.
Net Income Net Income attributable to Origin for the fiscal year ended September 30, 2023, was RMB62.7 million (US$8.7 million), compared to the net income of RMB2.35 million for the fiscal year ended September 30, 2022. 56 Table of Contents B. Liquidity and Capital Resources .
Loss from operations Loss from operation for the fiscal year ended September 30, 2021, was RMB138.0 million (US$21.3 million), compared with net loss from operation of RMB91.6 million in fiscal year 2020. Interest expense Interest expense was RMB8.6 million (US$1.3 million) for the fiscal year 2021 compared to RMB5.8 million a year ago.
Interest expense Interest expense, net was RMB 0.98 million (US$ 0.14 million) for the fiscal year 2023 compared to RMB8.2 million a year ago.
Removed
As a result, the general and administrative expenses was significantly lower for the fiscal year 2022. Research and development expenses were RMB7.4 million (US$1.05 million) in fiscal year 2022, compared to RMB2 million in fiscal year 2021. Research and development expenses increased because the Company carried most of the R&D budget expenses in 2022 on our own.
Added
It is expected to obtain the approval certificates of new transgenic corn varieties in 2024, and introduce them into the market in 2024 or 2025.
Removed
General and administrative expenses for the fiscal year ended September 30, 2022, were RMB14.3 million (US$2.0 million), compared to RMB73.3 million year-over-year. In 2021 there were recorded a large sum for the impairment and bad debt provision that were no longer required in fiscal year 2022.
Added
The proceeds from the sale of the ordinary shares will be used for working capital and the grant amount will be used for our corn supply chain facilities in Xinjiang and other region. As of September 30, 2023 and 2022, we had approximately RMB23.7million (US$3.3million) and RMB17.7 million, respectively, in cash and cash equivalents for continuing operations.
Removed
As a result, the general and administrative expenses was significantly lower for the fiscal year 2022.
Added
Financing activities: Net cash provided by financing activities was RMB22.9 million for the fiscal year ended September 30, 2023, compared with net cash used in financing activities of RMB 0.32 million for the fiscal year ended September 30, 2022.
Removed
Research and development expenses were RMB7.4 million (US$1.05 million) in fiscal year 2022, compared to RMB2 million in fiscal year 2021. Research and development expenses increased because the Company carried most of the R&D budget in fiscal year 2022. A government grant for R&D is expected in 2023 which will offset the expenses of research and development.
Added
A total of 219,440, 201,000 and 320,000 ordinary shares were issued for these equity financing.
Removed
Fiscal Year ended September 30, 2021, compared to Fiscal Year ended September 30, 2020 Revenues For the fiscal year ended September 30, 2021, revenue was RMB 46.4 million (US$7.2 million), compared to RMB52.5 million for the fiscal year ended September 30, 2020.
Added
In July, 2022, Origin Biotechnology entered into a supply agreement with Henan Yingdafeng Agricultural Development Limited (“Yingdafeng”) to supply 100,000 tonnes corn bulk commodities. Due to the impact of Covid-19 and quarantine policies in Xinjiang province, the products were not delivered as scheduled.
Removed
The decline in revenues was mainly due to significant scrap sales in fiscal year 2020 and limited supply in fiscal year 2021. In the aggregate scrap sales make up an immaterial amount of our total sales.
Added
Yingdafeng filed lawsuit and the local court in Neixiang County issued first legal judgement on August 16, 2023 that requires Origin to pay a total of RMB22 million to Yingdafeng.
Removed
Due to the nature of the seed industry, we normally produce our hybrid corn seeds according to our annualized production plan that is developed at least one year before expected delivery to our customers.
Added
After Origin appealed the decision from the local court in Neixiang County, the Intermediate People's Court of Nanyang City (a higher-level court over Neixiang County People’s Court) decided on December 14, 2023 to revoke the judgement of Neixiang Contry People’s Court. The case is now sent back to the People's Court of Neixiang County, Henan Province for retrial.
Removed
If our production plan is too aggressive, we may produce more seeds than the market demands, resulting crop seed that goes unsold and ultimately in aged seeds which cannot be sold as crop seed. Often we decide not to sell the aged seeds as crop seed products to maintain our consistent high seed quality.
Removed
We perform testing regularly on our seed products such as germination rate testing.
Removed
In the event we conclude that our seeds are not meeting our quality control standards as crop seed, the aged seed inventory may be sold as common feed products at greatly reduced prices, which results in additional revenue to the Company in the form of scrap sales. 56 Table of Contents The decline in revenues for FY 2021 and FY2020 was overall a decline in sales of our crop seed products.
Removed
We believe the decline was due to a shortage of our crop seed inventory supply and, more generally, increasing competition in seed market.
Removed
We had a shortage of inventory supply because parts of our older inventory deteriorated to such a degree that it became scrap seed, and our production of new seed product had not increased sufficiently to meet needed capacity. From 2015 to 2017, we overproduced our inventory. Seeds that weren’t sold in subsequent years aged and became old inventory.
Removed
Because of our larger inventory levels we decided to produce less seed in subsequent years. As time passed, we found the old seed inventory began to fall below our quality standards, one being the germination rate, for example. Additionally, the older corn seed varieties were becoming less popular with growers.
Removed
In the 2019-2020 season, we scrapped 1,323 metric tons of seed, which meant they were sold as normal feed crop other than seed, at greatly discounted prices to crop seed, namely ‘scrap sale.’ As a result, our supply to distributors for 2020 was decreased, and thus sales also were decreased.
Removed
Moreover, we scrapped another 240 metric tons of seed in 2020, which likewise influenced our supply for 2021 and led to a decline in sales and revenue. As a result of our scrap seed sales over the last couple of years, we believe we have cleaned up all of our inventory levels and the quality levels..
Removed
We believe that now we currently have a seed inventory available for sale where most seed is newly produced. In general, our scrap sales are deemed to be insignificant as follows: For the year ended September 30, 2021, we had revenues of RMB45.71M for hybrid corn seed (98%) and scrap revenue of RMB0.72M (2%).
Removed
For the year ended September 30, 2020, we had revenues of RMB52.04M for hybrid corn seed (99%) and scrap revenue of RMB0.47M (1%). Operating expenses Total operating expenses from continuing operations for the fiscal year ended September 30, 2021 were RMB150.7 million (US$23.2 million), compared to the operating expenses of RMB95.1 million in the fiscal year 2020.
Removed
The increase in operating expenses was mainly due to a few one-time expenses. See General and Administrative expense section below for additional discussion. Selling and marketing Selling and marketing expenses for fiscal year 2021 were RMB5.6 million (US$0.9 million), compared to RMB4.8 million.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

29 edited+8 added−7 removed33 unchanged
The board of directors believes that Ms. Wang qualifies as an “audit committee financial expert” within the meaning of all applicable rules. The board of directors believes that Ms. Wang has financial expertise because of her educational backgrounds and her extensive experience in financial reporting for private and public companies.
Wang qualifies as an “audit committee financial expert” within the meaning of all applicable rules. The board of directors believes that Ms. Wang has financial expertise because of her educational backgrounds and her extensive experience in financial reporting for private and public companies.
The current charter of the Compensation Committee, which was adopted March 16, 2007, provides that the committee is responsible for: ● reviewing and making recommendations to our board of directors regarding our compensation policies and forms of compensation provided to our directors, officers and other senior employees; ● reviewing and determining performance-based awards and compensation for our officers and other employees; ● reviewing and determining share-based compensation (including the 2009, 2014 AND 2021 Performance Equity Plans) for our directors, officers, employees and consultants; ● administering our equity incentive plans (including the 2009, 2014 AND 2021 Performance Equity Plans) in accordance with the terms thereof; and ● such other matters that are specifically delegated to the Compensation Committee by our board of directors from time to time.
The current charter of the Compensation Committee, which was adopted March 16, 2007, provides that the committee is responsible for: ● reviewing and making recommendations to our board of directors regarding our compensation policies and forms of compensation provided to our directors, officers and other senior employees; ● reviewing and determining performance-based awards and compensation for our officers and other employees; ● reviewing and determining share-based compensation (including the 2009, 2014 AND 2021 Performance Equity Plans) for our directors, officers, employees and consultants; ● administering our equity incentive plans (including the 2009, 2014 AND 2021 Performance Equity Plans) in accordance with the terms thereof; and 63 Table of Contents ● such other matters that are specifically delegated to the Compensation Committee by our board of directors from time to time.
Our employees are not covered by any collective bargaining agreement. We believe that we have a good relationship with our employees. 66 Table of Contents E. Share Ownership.
Our employees are not covered by any collective bargaining agreement. We believe that we have a good relationship with our employees. ​ 65 Table of Contents E. Share Ownership.
The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of January 1, 2023, by each of our directors and executive officers who beneficially own our ordinary shares, and other principal shareholders. ​ ​ ​ ​ ​ ​ ​ Shares Beneficially Owned ​ ​ ( * ) ​ ​ ​ ​ ​ Percentage of ​ ​ ​ Number Total ​ Directors and Executive Officers: ​ ​ ​ Gengchen Han, Chairman of the Board and CEO (1)(2) 836,383 13.18 % Michael W.
The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of January 8, 2024, by each of our directors and executive officers who beneficially own our ordinary shares, and other principal shareholders. ​ ​ ​ ​ ​ ​ ​ Shares Beneficially Owned ​ ​ ( * ) ​ ​ ​ ​ ​ Percentage of ​ ​ ​ Number Total ​ Directors and Executive Officers: ​ ​ ​ Gengchen Han, Chairman of the Board and CEO (1)(2) 836,383 13.2 % Michael W.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management. The following table sets forth certain information regarding our directors and executive officers as of January 31, 2023. ​ ​ ​ ​ ​ Name Age Position Gengchen Han 68 Chairman of the Board, Chief Executive Officer Michael W.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management. The following table sets forth certain information regarding our directors and executive officers as of September 30, 2023. ​ ​ ​ ​ ​ Name Age Position Gengchen Han 68 Chairman of the Board, Chief Executive Officer Michael W.
Lin received his Ph.D. and Master’s Degree from CAAS and his Bachelor’s degree in Biology from University of Sichuan. 62 Table of Contents B. Compensation. The aggregate cash compensation paid to our directors and executive officers as a group was RMB nil (US$ nil) for the twelve months ended September 30, 2022.
Lin received his Ph.D. and Master’s Degree from CAAS and his Bachelor’s degree in Biology from University of Sichuan. B. Compensation. The aggregate cash compensation paid to our directors and executive officers as a group was RMB nil (US$ nil) for the twelve months ended September 30, 2023.
The agreement currently has a term of three years commencing on January 1, 2021. Dr. Han is entitled to insurance benefits, five weeks’ vacation, a car and reimbursement of business expenses and, if necessary, relocation expenses. The agreement is terminable by Origin for death, disability and cause. Dr.
Han has an employment agreement with us. The agreement currently has a term of three years commencing on January 1, 2024. Dr. Han is entitled to insurance benefits, five weeks’ vacation, a car and reimbursement of business expenses and, if necessary, relocation expenses. The agreement is terminable by Origin for death, disability and cause. Dr.
We offer our employees additional annual merit-based bonuses in accordance with the overall performance of our company, his or her department and the individual.
All of our employees are located in China. We offer our employees additional annual merit-based bonuses in accordance with the overall performance of our company, his or her department and the individual.
Michael Trimble has an understanding of Generally Accepted Accounting Principles and financial statements, the ability to assess the general application of such principles in connection with our financial statements, including estimates, accruals and reserves, experience in analyzing or evaluating financial statements of similar breadth and complexity as our financial statements, an understanding of internal controls and procedures for financial reporting and an understanding of Audit Committee functions.
Michael Trimble has an understanding of Generally Accepted Accounting Principles and financial statements, the ability to assess the general application of such principles in connection with our financial statements, including estimates, accruals and reserves, experience in analyzing or evaluating financial statements of similar breadth and complexity as our financial statements, an understanding of internal controls and procedures for financial reporting and an understanding of Audit Committee functions. 62 Table of Contents The board of directors believes that Ms.
The Nominating Committee will identify, evaluate and recommend candidates to become members of the Board of Directors with the goal of creating a balance of knowledge and experience.
The Nominating Committee will identify, evaluate and recommend candidates to become members of the Board of Directors with the goal of creating a balance of knowledge and experience. The Nominating Committee is not a fully independent committee.
The main purpose of the plan is to provide an existing structure and renewable benefit plan for senior management and directors and others providing services to the company in order to align our employee incentives towards our stock performance. We had outstanding awards for nil options under the 2021 Plan at September 30, 2022. 63 Table of Contents C.
The main purpose of the plan is to provide an existing structure and renewable benefit plan for senior management and directors and others providing services to the company in order to align our employee incentives towards our stock performance. We had outstanding awards for 36,000 options under the 2021 Plan at September 30, 2023.
The material provisions of these agreements are discussed under Item 4.C of this Annual Report. Technical Service Agreements All of the intellectual property rights of the company are held by Origin Biotechnology pursuant to technology service agreements dated December 25, 2004 and other similar arrangements among the company subsidiaries.
Technical Service Agreements All of the intellectual property rights of the company are held by Origin Biotechnology pursuant to technology service agreements dated December 25, 2004 and other similar arrangements among the company subsidiaries. The material provision of the technology service agreements are discussed under Item 4.C of this Annual Report. 2. Interests of experts and counsel. Not applicable.
Directors and executives are awarded with equities and stock options, which are stated in the chart found below. 2009 Performance Equity Plan On April 22, 2010, the company adopted the 2009 Performance Equity Plan, under which we are able to issue equity awards with the right to acquire up to 1,500,000 ordinary shares to our directors, officers, employees, individual consultants and advisors.
Directors and executives are awarded with equities and stock options, which are stated in the chart found below. 2014 Performance Equity Plan On December 22, 2014, the company adopted the 2014 Performance Equity Plan, under which we are able to issue equity awards for up to 5,000,000 ordinary shares to our directors, officers, employees, individual consultants and advisors.
Trimble, Director (3) 51,900 ** % Shaojiang Chen Director (1) — ** % Fei Wang, Director (1)(4) 4,000 ** % Min Lin, Director (1) 2,000 ** % All Officers and Directors (5 persons) 894,283 14.07 % ​ ​ ​ ​ ​ ​ 5% and Greater Shareholders Tiger Capital Fund SPC (5) 1,696,450 23.25 % * Beneficial ownership and percentage are determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended. ** Less than 1% (1) The business address of each of the individuals is c/o 21 Shengmingyuan Road, Changping District, Beijing, PRC 102206.
Trimble, Director (3) 51,900 ** % Shaojiang Chen Director (1) — ** % Fei Wang, Director (1)(4) 4,000 ** % Min Lin, Director (1) 4,000 ** % Shaojiang Chen ​ 2,000 ​ ** % ​ ​ ​ ​ ​ ​ All Officers and Directors (5 persons) 898,283 14.18 % ​ ​ ​ ​ ​ ​ 5% and Greater Shareholders Comane International Group Ltd (5) 1,000,000 15.79 % * Beneficial ownership and percentage are determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended. ** Less than 1% (1) The business address of each of the individuals is c/o 21 Shengmingyuan Road, Changping District, Beijing, PRC 102206.
From 1989 until 1990 he worked for the International Maize and Wheat Improvement Center, or CIMMYT, in Mexico. He worked for Pioneer Hi-bred International from 1990 to 1996; his positions there included Regional Technical Coordinator for Asia/Pacific and Regional Supervisor for China Business. Dr. Michael W. Trimble has been a director of Origin since May 2006. Dr.
He worked for Pioneer Hi-bred International from 1990 to 1996; his positions there included Regional Technical Coordinator for Asia/Pacific and Regional Supervisor for China Business. Dr. Michael W. Trimble has been a director of Origin since May 2006. Dr.
The Nominating Committee is not a fully independent committee. 65 Table of Contents Pursuant to a vote by the board of directors taken at a board meeting held March 16, 2007, the Nominating Committee charter was amended.
Pursuant to a vote by the board of directors taken at a board meeting held March 16, 2007, the Nominating Committee charter was amended.
Our officers are appointed by the board of directors and hold office until their successors are duly elected and qualified, but may be removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office may be filled by resolution of directors. Employment Agreements Dr. Han has an employment agreement with us.
Our officers are appointed by the board of directors and hold office until their successors are duly elected and qualified, but may be removed at any time, with or without cause, by resolution of directors.
Trimble 66 Independent Director Shaojiang Chen 58 Independent Director Fei Wang 46 Independent Director Min Lin 58 Independent Director ​ Dr. Gengchen Han is the Chairman of Origin and has been the Chief Executive Officer of Origin since December 3, 2018. He also served, in the past, as the President and the Chief Executive of Origin at various times. Dr.
Trimble 66 Independent Director Shaojiang Chen 58 Independent Director Fei Wang 46 Independent Director Min Lin 58 Independent Director ​ 59 Table of Contents Dr. Gengchen Han is the Chairman of Origin and has been the Chief Executive Officer of Origin since December 3, 2018.
In addition to current equity awards to the directors and officers, we plan to expand our equity awards to a broader range of employees in order to align our employee incentives towards our stock performance. We had outstanding awards for 303,060 options under the 2014 Plan at September 30, 2022.
In addition to current equity awards to the directors and officers, we plan to expand our equity awards to a broader range of employees in order to align our employee incentives towards our stock performance.
The Audit Committee also has a general compliance oversight role in assuring that our directors, officers and management comply with our code of ethics, reviews and approves related party transactions, deals with complaints regarding accounting, internal controls and auditing matters, and oversees compliance with accounting and legal requirements applicable to us. 64 Table of Contents Pursuant to the terms of its charter, as amended, the Audit Committee’s responsibilities include, among other things: ● annually reviewing and reassessing the adequacy of the Audit Committee’s form of charter; ● reviewing our annual audited financial statements with our management and our independent auditors and the adequacy of our internal accounting controls; ● reviewing analyses prepared by management and independent auditors concerning significant financial reporting issues and judgments made in connection with the preparation of our financial statements; ● engaging of the independent auditor; ● reviewing the independence of the independent auditors; ● reviewing our auditing and accounting principles and practices with the independent auditor and reviewing major changes to our auditing and accounting principles and practices as suggested by the independent auditor or our management; ● appointment of the independent auditor; and ● approving professional services provided by the independent auditors, including the range of audit and non-audit fees.
Pursuant to the terms of its charter, as amended, the Audit Committee’s responsibilities include, among other things: ● annually reviewing and reassessing the adequacy of the Audit Committee’s form of charter; ● reviewing our annual audited financial statements with our management and our independent auditors and the adequacy of our internal accounting controls; ● reviewing analyses prepared by management and independent auditors concerning significant financial reporting issues and judgments made in connection with the preparation of our financial statements; ● engaging of the independent auditor; ● reviewing the independence of the independent auditors; ● reviewing our auditing and accounting principles and practices with the independent auditor and reviewing major changes to our auditing and accounting principles and practices as suggested by the independent auditor or our management; ● appointment of the independent auditor; and ● approving professional services provided by the independent auditors, including the range of audit and non-audit fees.
We have filed documentation with Nasdaq exempting the company under those provisions of the Nasdaq regulations that BVI law does not require the company to follow. D. Employees. We currently have 63 employees, including management, managers and research and related personnel. All of our employees are located in China.
We have filed documentation with Nasdaq exempting the company under those provisions of the Nasdaq regulations that BVI law does not require the company to follow. In June 2023, the Board of Directors adopted a “clawback” policy, compliant with Nasdaq regulations. 64 Table of Contents D. Employees. We currently have 63 employees, including management, managers and research and related personnel.
None of the above shareholders have voting rights that differ from the voting rights of other shareholders. A substantial number of the ordinary shares are held in “street name,” and the company believes that a large portion of these shares represent holdings of non-United States shareholders through brokers in non-United States jurisdictions.
A substantial number of the ordinary shares are held in “street name,” and the company believes that a large portion of these shares represent holdings of non-United States shareholders through brokers in non-United States jurisdictions. Because these holdings are in street name, the company cannot determine the actual number or jurisdictions in which these shares are held.
Those awards held by the directors and officers are listed below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ Exercise ​ ​ ​ ​ ​ Option Price Grant Date Expiration Date Gengchen Han ​ ​ ​ 12,000 ​ $ 5.19 /Share ​ January 2, 2019 ​ January 2, 2024 ​ 12,000 ​ $ 5.30 /Share ​ January 2, 2020 ​ January 2, 2025 ​ 12,000 ​ $ 13.99 /Share ​ January 5, 2021 ​ January 5, 2026 ​ 12,000 ​ $ 7.23 /Share ​ January 3, 2022 ​ January 3, 2027 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Michael Trimble ​ ​ ​ ​ ​ ​ ​ ​ 2,000 ​ $ 5.19 /Share ​ January 2, 2019 ​ January 2, 2024 ​ 2,000 ​ $ 5.30 /Share ​ January 2, 2020 ​ January 2, 2025 ​ 2,000 ​ $ 13.99 /Share ​ January 5, 2021 ​ January 5, 2026 ​ 2,000 ​ $ 7.23 /Share ​ January 3, 2022 ​ January 3, 2027 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Min Lin ​ ​ ​ ​ ​ ​ ​ ​ 2,000 ​ $ 7.23 /Share ​ January 3, 2022 ​ January 3, 2027 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fei Wang 2,000 ​ $ 5.30 /Share ​ January 2, 2020 ​ January 2, 2025 ​ On April 30, 2021, the company adopted the 2021 Performance Equity Plan, under which we are able to issue equity awards for up to 1,000,000 ordinary shares to our directors, officers, employees, individual consultants and advisors.
Those awards held by the directors and officers are listed below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ Exercise ​ ​ ​ ​ ​ Option Price Grant Date Expiration Date Gengchen Han ​ ​ ​ 12,000 ​ $ 5.19 /Share ​ January 2, 2019 ​ January 2, 2024 ​ 12,000 ​ $ 5.30 /Share ​ January 2, 2020 ​ January 2, 2025 ​ 12,000 ​ $ 13.99 /Share ​ January 5, 2021 ​ January 5, 2026 ​ 12,000 ​ $ 7.23 /Share ​ January 3, 2022 ​ January 3, 2027 ​ ​ 12,000 ​ $ 6.79/Share ​ May 22, 2023 ​ May 22, 2028 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Michael Trimble ​ ​ ​ ​ ​ ​ ​ ​ 2,000 ​ $ 5.19 /Share ​ January 2, 2019 ​ January 2, 2024 ​ 2,000 ​ $ 5.30 /Share ​ January 2, 2020 ​ January 2, 2025 ​ 2,000 ​ $ 13.99 /Share ​ January 5, 2021 ​ January 5, 2026 ​ 2,000 ​ $ 7.23 /Share ​ January 3, 2022 ​ January 3, 2027 ​ ​ 2,000 ​ ​ 6.79 ​ May 22, 2023 ​ May 22, 2028 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Min Lin ​ ​ ​ ​ ​ ​ ​ ​ 2,000 ​ $ 7.23 /Share ​ January 3, 2022 ​ January 3, 2027 ​ ​ 2,000 ​ ​ 6.79 ​ May 22, 2023 ​ May 22, 2028 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fei Wang 2,000 ​ $ 5.30 /Share ​ January 2, 2020 ​ January 2, 2025 ​ 2,000 ​ ​ 6.79 ​ May 22, 2023 ​ May 22, 2028 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shaojiang Chen ​ 2,000 ​ ​ 6.79 ​ May 22, 2023 ​ May 22, 2028 ​ C.
Please refer to Item 6.E “Directors, Senior Management and Employees – Share Ownership.” 67 Table of Contents 1. Related party transactions. Stock Consignment Agreements We operate our business in China through our PRC Operating companies. We have entered into stock consignment agreements in connection with the share ownership with certain of the company subsidiaries.
The company believes that it continues to qualify as a foreign private issuer. ​ 66 Table of Contents ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A Major shareholders. Please refer to Item 6.E “Directors, Senior Management and Employees – Share Ownership.” 1. Related party transactions. Stock Consignment Agreements We operate our business in China through our PRC Operating companies.
Han is also the Executive Chairman of Beijing Origin and its affiliated companies, a position that he has held since founding the business in 1997. Dr. Han was the Co-Chief Executive Officer and Chief Executive Officer of the Company from its inception in 1997 until January 1, 2009 and from August 1, 2011 to April 25, 2016. Dr.
He also served, in the past, as the President and the Chief Executive of Origin at various times. Dr. Han is also the Executive Chairman of Beijing Origin and its affiliated companies, a position that he has held since founding the business in 1997. Dr.
We had no outstanding awards options under the 2009 Plan at September 30, 2022. 2014 Performance Equity Plan On December 22, 2014, the company adopted the 2014 Performance Equity Plan, under which we are able to issue equity awards for up to 5,000,000 ordinary shares to our directors, officers, employees, individual consultants and advisors.
The outstanding awards under this plan as of 9/30/2023 is 224,700, and the ordinary shares available for future grant as of 9/30/2023 is zero. 60 Table of Contents 2021 Performance Equity Plan On April 30, 2021, the company adopted the 2021 Performance Equity Plan, under which we are able to issue equity awards for up to 1,000,000 ordinary shares to our directors, officers, employees, individual consultants and advisors.
Han has more than 20 years of experience in research and development of hybrid seed products, particularly corn seed. From 1982 until 1984, Dr. Han was a lecturer at the Henan Agriculture University. From 1984 to 1987, Dr. Han received his Ph.D. degree in Plant Breeding and Cytogenics from Iowa State University.
Han was a lecturer at the Henan Agriculture University. From 1984 to 1987, Dr. Han received his Ph.D. degree in Plant Breeding and Cytogenics from Iowa State University. From 1989 until 1990 he worked for the International Maize and Wheat Improvement Center, or CIMMYT, in Mexico.
(5) The business address of Tiger Capital Fund SPC (Tiger Fund) is Floor 4, Willow House, Cricket Square, Grand Cayman, KY 1-9010, Cayman Islands. In addition, Includes 1,000,000 ordinary shares issuable under a warrant held by Tiger Capital Fund SPC that expire January 4, 2024.
(5) The business address of Comane International Group Ltd is 2 Pacific Square, Suite 106, Central, Hong Kong. This includes 1,000,000 ordinary shares issuable under a warrant held by Comane International Group Ltd that expire January 4, 2027. None of the above shareholders have voting rights that differ from the voting rights of other shareholders.
The material provision of the technology service agreements are discussed under Item 4.C of this Annual Report. Corn Originator Agreement Beijing Origin entered into an agreement with Trimble Genetics International LLC, or Trimble Genetics, a plant genetics research company. Michael W.
We have entered into stock consignment agreements in connection with the share ownership with certain of the company subsidiaries. The material provisions of these agreements are discussed under Item 4.C of this Annual Report.
Removed
The main purpose of the plan was to provide an existing structure and renewable benefit plan for senior management and directors and others providing services to the company. No further awards may be made under this plan.
Added
Han was the Co-Chief Executive Officer and Chief Executive Officer of the Company from its inception in 1997 until January 1, 2009 and from August 1, 2011 to April 25, 2016. Dr. Han has more than 20 years of experience in research and development of hybrid seed products, particularly corn seed. From 1982 until 1984, Dr.
Removed
Because these holdings are in street name, the company cannot determine the actual number or jurisdictions in which these shares are held. The company believes that it continues to qualify as a foreign private issuer. ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A Major shareholders.
Added
There are 886,320 ordinary shares available for future grant as of September 30, 2023.
Removed
Trimble, one of our directors, is the founder and president of Trimble Genetics and currently owns 100% of its equity interest. Under this agreement, Beijing Origin hires Trimble Genetics as its agent to test, promote, license and collect research fees on hybrids involving inbred lines of corn developed by Beijing Origin.
Added
Any vacancy occurring in any office may be filled by resolution of directors. 61 Table of Contents Board Diversity Each year the board of directors, will review the appropriate characteristics, skills, and experience required for the board of directors as a whole and its individual members.
Removed
Trimble Genetics retains fifty percent of such research fees and pays the remaining fifty percent to Beijing Origin. This agreement is immaterial in amount or significance. Corn Inbred and Hybrid Transfer and Use Agreement Beijing Origin entered into an agreement with Trimble Genetics on September 6, 2002.
Added
In evaluating the suitability of individual candidates, we will consider factors including, without limitation, an individual's character, integrity, judgment, potential conflicts of interest, other commitments, and diversity.
Removed
Under this agreement, Trimble Genetics provides corn inbreds and hybrids to Beijing Origin for experimental testing purposes. The agreement applies to all corn inbreds and hybrids transferred from Trimble Genetics to Beijing Origin previously, currently or in the future. If a hybrid from the testing proves to be marketable, the parties will negotiate a license agreement.
Added
While we have no formal policy regarding board diversity for our board of directors as a whole or for each individual member, our board of directors will consider such factors as gender, race, ethnicity and experience, area of expertise, as well as other individual attributes that contribute to the total diversity of viewpoints and experience represented on the board of directors.
Removed
If for any reason, it is not possible to conclude a license agreement, Beijing Origin agrees to return all remnant inbred seed and to destroy any inbreds or hybrids that may have originated from the material provided by Trimble Genetics. This agreement is immaterial in amount or significance.
Added
The following is a table indicating the current board diversity.
Removed
Xinjiang Origin In May 2011 Beijing Origin established Xinjiang Origin for seed production and distribution. Beijing Origin invested RMB51 million for a 51% ownership of Xinjiang Origin. 2. Interests of experts and counsel. Not applicable.
Added
Board Diversity Matrix (As of September 30, 2023) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Directors ​ Five ​ ​ ​ ​ ​ ​ ​ ​ ​ Did Not Disclose ​ ​ ​ ​ ​ ​ ​ ​ Demographic ​ ​ Female Male ​ Non-Binary ​ Background Part I: Gender Identity ​ ​ ​ ​ Directors ​ 1 ​ 4 ​ — ​ — Part II: Demographic Background African American or Black ​ ​ — — Alaskan Native or Native American ​ ​ — — Asian 4 ​ — — Hispanic or Latinx ​ ​ — — Native Hawaiian or Pacific Islander ​ ​ — — White 1 ​ — — Two or More Races or Ethnicities ​ ​ — — LGBTQ+ ​ ​ — — Did Not Disclose Demographic Background ​ ​ — — ​ Employment Agreements Dr.
Added
The Audit Committee also has a general compliance oversight role in assuring that our directors, officers and management comply with our code of ethics, reviews and approves related party transactions, deals with complaints regarding accounting, internal controls and auditing matters, and oversees compliance with accounting and legal requirements applicable to us.

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