Axiom Holdings, Inc. (OTCBB:APYV) Files An 8-K Completion of Acquisition or Disposition of Assets

Item 2.01 The Share Exchange Agreement and Related Transactions.

This Form 8-K (Form 8-K), dated December 21, 2016, sets forth the
terms of an amendment to the Share Exchange Agreement (the SEA
Amendment) discussed below in Item 1.01 Entry into a Material
Definitive Agreement, disclosure required under items under Form
8-K Item 2.01 Completion of Acquisition or Disposition of Assets,
Item 3.02 Unregistered Sale of Equity Securities, Item 5.01
Changes in Control of Registrant, Item 5.06 Change in Shell
Company Status, and Item 9.01 Financial Statements and Exhibits
and Form 10 Disclosure.

Item 1.01 Entry into a Material Definitive
Agreement.

On December 21, 2016, the Company, Horizon Resources Co. Ltd., a
Cayman Islands company and a wholly owned subsidiary of the
Company (Horizon), CJC(Hong Kong), Ltd. (CJC) and the CJC
Shareholders entered into an amendment to the Share Exchange
Agreement in which Horizon agreed to acquire all of the issued
and outstanding CJC Shares from the CJC Shareholders in exchange
for the issuance by the Company to the CJC Shareholders of
200,000,000 shares of Common Stock. The Share Exchange Agreement
as amended by the SEA Amendment is collectively referred to as
the Share Exchange Agreement, as amended. The SEA Amendment also
provides for the addition of Sichuan Xing Tie Electric Power
Company Limited which is an additional subsidiary of CJC to be
acquired as part of the transaction. The Share Exchange Agreement
as originally drafted provided for the direct acquisition by the
Company of the CJC Shares, and the SEA Amendment accomplishes
this through the transfer of the CJC Shares to Horizon, resulting
in indirect ownership by the Company of the CJC Shares through
its wholly owned subsidiary Horizon. The SEA Amendment also
corrects the name of CJC which was incorrectly written in the
Share Exchange Agreement as CJC Holdings, Ltd. rather than the
correct name of CJC(Hong Kong), Ltd.

The foregoing description of the SEA Amendment and the Share
Exchange Agreement do not purport to be complete and is qualified
in its entirety by reference to such agreements, which are filed
as Exhibits 10.1 and 10.2 hereto, and are incorporated herein by
reference.

Item 2.01 Completion of Acquisition or Disposition of
Assets.

The information set forth in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.01.

On December 21, 2016, our wholly owned subsidiary Horizon
completed the acquisition of the CJC Shares as provided for in
the Share Exchange Agreement as amended by the SEA Amendment. to
the terms and conditions of the Share Exchange Agreement, as
amended, the CJC Shareholders who collectively own 100% of the
issued and outstanding shares of CJC exchanged their CJC Shares
for an aggregate of 200,00,000 shares of our common stock. to
terms of the Share Exchange Agreement and immediately prior to
the completion of the acquisition of CJC, Low Tuan Lee, Lim Wei
and Chua Seong cancelled an aggregate of 200,000,000 shares of
our common stock. Upon completion of the closing, CJC will become
a subsidiary of our company and the CJC Shareholders as a group
will hold approximately 58.8% of our pro-forma shares of Common
Stock outstanding which is expected to be approximately
340,000,000 shares giving effect to the issuance of the shares to
acquire CJC and the share cancellation.

FORM 10 DISCLOSURE

Following the completion of the acquisition of CJC, our business
and operations are now those of CJC and its subsidiaries as
discussed below. Following is information on the business and
operations of CJC and its subsidiaries, Xiaojin County Jitai
Power Investment Company Limited, Xiaojin County Xin Hong
Electric Power Development Company Limited, Sichuan Xing Tie
Electric Power Company Limited, Xiao Jin County EnZe Hotel
Management Company Limited, and Xiao Jin County SiGuNiang
Mountain Hotel Management Company Limited. Unless specifically
set forth to the contrary, when used in this report the terms
“we”, “our”, the “Company” and similar terms refer to CJC
and its subsidiaries.

History of and Rationale Behind the
Transactions

In August 2016, the shareholders of CJC developed a plan to
position itself to acquire companies that were seeking to expand
and obtain the benefits of a U.S. public company (the
Restructuring). A key element of the Restructuring was to enter
into a transaction with a public company in the United States by
which we, the public company, would acquire operations based in
the PRC, all in compliance with PRC law. To accomplish this, the
shareholders of CJC formed JinBaiXing (Shenzhen) Clean Energy
Technology Service Company Limited (JBX),formed on August 26,
2016, to acquire companies engaged in power production and
JinTaiHong (Shenzhen) Hotel Management Service Company Limited
(JTH), formed on August 26, 2016, to acquire companies engaged in
the hospitality industry. JBX and JTH are wholly-owned foreign
entities organized under the laws of the PRC (the WFOEs).

Effective as of August 31, 2016, JBX has acquired or has
agreements under which it has acquired 100% of the issued and
outstanding equity of the following operating companies organized
under the laws of the PRC. These companies make up our Power
Production Segment:

		Xiaojin County Jitai Power Investment Company Limited (Jitai Power Investment), formed on November 10, 2003,
	Xiaojin County Xin Hong Electric Power Development Company Limited (Xin Hong Power Development), formed on January 17, 2006, and
	Sichuan Xing Tie Electric Power Company Limited (Xing Tie Electric), formed on November 12, 2003.

Effective as of August 31, 2016, JTH has acquired or has
agreements under which it has acquired 100% of the issued and
outstanding equity of the following operating companies organized
under the laws of the PRC. These companies make up our
Hospitality Segment:

		Xiao Jin County EnZe Hotel Management Company Limited (EnZe Hotel Management), formed on May 25, 2016; and
	Xiao Jin County SiGuNiang Mountain Hotel Management Company Limited (SiGuNiang Mountain Hotel Management),formed on September 13, 2007.

Having identified Axiom Holdings, Inc. as the preferred public
company to acquire, and CJChaving consolidated its acquisitions
of the operating companies listed above, CJC and the CJC
Shareholders entered into the Share Exchange Agreement, as
amended with Axiom and Horizon, and the transactions set forth in
that agreement were completed on December 21, 2016.

None of Axiom, Horizon, CJC or its subsidiaries have entered any
bankruptcy, receivership or similar proceedings.

The Share Exchange Transaction

On October 10, 2016, we entered into the Share Exchange Agreement
with CJC, together with its subsidiaries, JBX, Jitai Power
Investment, Xin Hong Power Development, JTH, EnZe Hotel
Management and SiGuNiang Mountain Hotel Management and the two
shareholders of CJC, Hu Dengyang and Yang Chuan (the CJC
Shareholders). to the Agreement, we agreed to acquire all of the
issued and outstanding shares of CJC from the CJC Shareholders in
exchange for the issuance to the CJC Shareholders of 200,000,000
shares of the Companys common stock, par value $0.001 per share
(the Common Stock).In connection with the transactions
contemplated under the Share Exchange Agreement, we agreed to
cancel 200,000,000 shares of our Common Stock currently
outstanding prior to the closing of the transactions, and
therefore the shares of Common Stock issued to the CJC
Shareholders in the transactions to the Share Exchange Agreement
will represent approximately 58.8% of the issued and outstanding
shares of the Companys Common Stock at the closing of such
transactions.

On December 21, 2016, the Company, Horizon, CJC(Hong Kong), Ltd.
(CJC) and the CJC Shareholders entered into an amendment to the
Share Exchange Agreement in which Horizon agreed to acquire all
of the issued and outstanding CJC Shares from the CJC
Shareholders in exchange for the issuance by the Company to the
CJC Shareholders of 200,000,000 shares of Common Stock. The Share
Exchange Agreement as amended by the SEA Amendment is
collectively referred to as the Share Exchange Agreement, as
amended. The SEA Amendment also provides for the addition of Xing
Tie Electric which is an additional subsidiary of CJC to be
acquired as part of the transaction. The Share Exchange Agreement
as originally drafted provided for the direct acquisition by the
Company of the CJC Shares, and the SEA Amendment accomplishes
this through the transfer of the CJC Shares to Horizon, resulting
in indirect ownership by the Company of the CJC Shares through
its wholly owned subsidiary Horizon. The SEA Amendment also
corrects the name of CJC which was incorrectly written in the
Share Exchange Agreement as CJC Holdings, Ltd. rather than the
correct name of CJC(Hong Kong), Ltd.

On December 21, 2016, our wholly owned subsidiary Horizon
completed the acquisition of the CJC Shares as provided for in
the Share Exchange Agreement as amended by the SEA Amendment. to
the terms and conditions of the Share Exchange Agreement, as
amended, the CJC Shareholders who collectively own 100% of the
issued and outstanding shares of CJC exchanged their CJC Shares
for an aggregate of 200,00,000 shares of our common stock. to
terms of the Share Exchange Agreement and immediately prior to
the completion of the acquisition of CJC, Low Tuan Lee, Lim Wei
and Chua Seong cancelled an aggregate of 200,000,000 shares of
our common stock. Upon completion of the closing, CJC will become
a subsidiary of our company and the CJC Shareholders as a group
will hold approximately 58.8% of our pro-forma shares of Common
Stock outstanding which is expected to be approximately
340,000,000 shares giving effect to the issuance of the shares to
acquire CJC and the share cancellation.

BUSINESS

Each of Axiom, Horizon, CJC, and the WFOEs are holding companies
and have no principal business. The following consists of a
discussion of the CJC operating subsidiaries that make up the
operations within the Power Production Segment and the
Hospitality Segment:

Power Production Segment

Overview. We are engaged in operating, developing and
seek to acquire electric generating facilities in China. We
currently operate two hydro-electric generating plants each of
which have average annual output capacity of 112.5548 million
kWh. In addition, two hydro-electric generating plants are under
construction as discussed below. In addition, we are seeking to
acquire other electric generating plants in China.

Jitai Power Investment. Jitai Power Investment operates
a hydropower electric generation station located in Xiaojin,
Sichuan, China, which commenced operations in September 2009. The
station has an annual average output of 125.664 million kilowatt
hours (kWh).

Xin Hong Power Development. Xin Hong Power Development
operates, or is completing, the Jiesigou I, II and III hydropower
stations located in Xiaojin, Sichuan, China. The Jiesigou II
hydropower station began operations in September, 2016 with an
installed electricity capacity of 24,000 kWh, and an average
annual output of 112.5548 million kWh. The Jiesigou I and
Jiesigou III hydropower stations are currently expected to come
on-line in 2019.

Xing Tie Electric. Xing Tie Electric is engaged in the
purchase and sale of power generating equipment, primarily to Xin
Hong Power Development.

Hospitality Segment

EnZe Hotel Management. EnZe Hotel Management owns and is
nearing completion of construction of the Enze Hotel located at
47 Government Street, Mei Xin Town, Xiaojin County, China upon.
The hotel is expected to be completed and open for business in
June 2017. This hotel is located across the street from the
HongjunHuishi Square. The Enze Hotel will have 190 guest rooms,
including 178 luxury guest rooms, and 12 deluxe suites, and will
cover a total of over 114,000 square feet. The hotel will include
a shopping area, business center, the 600-seatEnZe Restaurant, a
tea house in the lobby, a KTV (karaoke) house with ten private
rooms, a seven room spa, five conference rooms, three large
meeting rooms, and two multi-function halls which will
accommodate up to 800 people. We intend to sell bookings for the
hotel, the public meeting halls, the restaurant and the spa
directly in person, over the phone, through our website, and
through third party service providers including internet- and
mobile-based third party service providers. We will lease space
in our shopping area to premium brand retailers.

SiGuNiang Mountain Hotel Management. SiGuNiang Mountain
Hotel Management owns and is nearing completion of construction
of the Mt. Four Sisters Hotel, located in SiGuNiang Mountain
Town, Xiaojin County, Sichuan Province, China. The hotel is
expected to be completed and open for business in June 2017. The
hotel is adjacent to the provincial highway S303, and its rear
faces the Siguniang Mountain town government center. This area is
the center of tourism, entertainment and catering services in
SiGuNiang Mountain Town, and is approximately 143 miles from
Chengdu, the capital city of Sichuan and approximately 112 miles
from Maerkang, the capital of Aba Autonomous Region. The hotel
will have 90 guest rooms on six floors, will cover a total of
over 71,000 square feet, and is mainly in the Jiarong Tibetan
>

Trademarks

We do not have any trademarks. We do not consider the protection
of our trademarks to be important to our business.

Customers

Power Production Segment. We operate two power plants
within this segment. The Jiema hydroelectric station and the
Jiesigou II hydropower station sells their electricity to a
single customer, National Sichuan Xiaojin County Electricity
Supply Company Ltd., an unrelated third party. Please refer to
Risk Factors below for a discussion of the risks inherent with
providing electricity to a single customer.

Hospitality Segment. The Enze Hotel and Mt. Four Sisters
Hotel (together, the Hotel Brands) intend to target the domestic
and international tourism consumer market and corporate and
government travel and retreat market. We plan to position the
Enze Hotel as a modern international-standard luxury hotel,
offering 178 luxury suites and 12 deluxe suites for lodging, a
high end Tibetan >

Sales and Marketing

Power Production Segment. Power generation stations
often sell all electricity output to a single customer as noted
above. We do not engage in direct marketing activities, and we
believe that direct marketing activities are not necessary in the
power generation and electricity sales industry, due to the
increased weight given to reliable and consistent operation of
power stations.

Hospitality Segment. The Enze Hotel and the Mt. Four
Sisters Hotel currently under construction are expected to be
completed and open for business in June 2017. Accordingly, the
Hospitality Segment does not have any revenues as of the date of
this report. The Hospitality Segment is expected to target the
domestic and international consumer tourism market through
marketing campaigns leveraging internet-based third-party travel
companies and other internet-based advertising. We may also
implement marketing campaigns using print media, product
placement techniques, radio (including internet-based radio such
as XimalayaFM), television, trade shows and physical display
marketing techniques such as subway advertisements. We may seek
partnerships with local and provincial level government tourism
agencies. We intend to hire in-house sales and marketing staff to
target both the consumer tourism market and the corporate and
government retreat market.

Suppliers

Power Production Segment. Our Jiema hydroelectric
station, operated by Jitai Power Investment, is a hydroelectric
station which uses the flow of water from the Wori River to power
its electricity production. Our Jiesigou II station, operated by
Xin Hong Power Development, uses the flow of water from the
Jiesigou River to power its electricity production. Our Jiesigou
I and Jiesigou III stations which are under construction, are
expected to use the flow of water from the Jiesigou River to
power their electricity production.

Hospitality Segment. The Enze Hotel and the Mt. Four
Sisters Hotel are still under construction as of the date of this
report. Construction materials are sourced from a variety of
regions. We believe we will have access to a sufficient supply of
construction materials to complete the construction of the hotels
we plan to open.

Government Approvals

Power Production Segment

All of our hydroelectric power stations are subject to extensive
regulation by the PRC governmental authorities, including central
governmental authorities such as the Ministry of Commerce, the
State Administration for Industry and Commerce, the National
Development and Reform Commission, the State Electricity
Regulatory Commission, the State Administration of Taxation, the
Ministry of Environmental Protection, the Ministry of
Communications and Transportation, the Ministry of Water
Resources, the Ministry of Land and Resources and the Ministry of
Housing and Urban-Rural Development, as well as their provincial
and local counterparts. Government regulations address virtually
all aspects of our operations, including, among others, the
following:

		planning and construction of new power projects;
	the granting of power generation, dispatch and supply permits;
	the amount and timing of power generation;
	the setting of on-grid tariffs paid to power producers and power tariffs paid by consumers of electricity;
	power grid control and power dispatch, including the setting of preferential policies for the dispatch of renewable energy generated power;
	allocation of water resources and control of water flows;
	environmental protection and safety standards;
	acquisitions by foreign investors; and
	taxes, in particular Enterprise Income Tax and Value Added Tax.

Lastly, in accordance with relevant PRC laws and regulations,
hydroelectric power projects are required to pass a completion
acceptance procedure. Jitai Power has obtained the required
permit to operate the Jiema hydroelectric power station. Xin Hong
Power Development has applied for the required permits and
received the approvals required to develop and operate the
Jiesigou II hydroelectric power station that went into production
in September 2016. We plan to obtain all further government
approvals required to operate the Jiesigou I and III
hydroelectric power stations that are currently under
construction. Further, we believe our hydroelectric power
stations have the necessary government approvals to operate.

Hospitality Segment

The Chinese hospitality sector, including hotel owners and
operators, is subject to regulation at the national level by the
China National Tourism Administration, and at the local level by
the local tourism administrations.

Construction of our hotel properties is subject to regulation in
the PRC. prior to the start of construction projects, project
owners must, in accordance with relevant provisions of the State.
We are required to apply to local governmental authorities where
the project is located for construction permits, except for small
projects below a certain value set government regulators. We
believe the construction of our two hotel properties comply with
the current government regulations. In addition, upon completion
of construction, we plan to obtain all required government
approvals to operate the hotels.

Research and Development

Power Production Segment. We conduct research and
development within our Power Production Segment related to the
efficient generation of hydroelectric power, efficient storage of
electricity and electricity distribution and transfer practices.
Since the price of our electricity is set by contract and subject
to negotiation with our customers, who have substantial
negotiating leverage, we are limited in our ability to charge our
customers a higher price to finance research and development
activities.

Hospitality Segment. Both of our hotel properties are
under construction and not operational, and management devotes
substantially all of its time on completion of construction of
the hotel properties. We anticipate significant resources being
required for research and development activities in the area of
sales and marketing, commercial leasing and the selection of
shopping brands to lease our commercial spaces, and evolving
trends in the regional tourism sector. If we are capable of
building significant brand value, we will have the ability to
finance increased research and development activities through
increased pricing to the customer.

Industry and Competitive Advantages

Power Production Segment

Competition within the electric power industry has only been
introduced recently in China, as energy producers were
historically controlled by the government. China has experienced
significant capacity shortages, and suppliers have often been
unable to meet the surging demand for electricity. We believe
that competition between power projects to sell electricity is
lessened due to prevalent supply shortages. Nonetheless, we
believe that competition will increase in the long run.

All hydroelectric power projects in China are subject to dispatch
conducted by various dispatch centers. A dispatch center is
required to dispatch electricity to the Regulations on the
Administration of Electric Power Dispatch Networks and Grids,
issued by the State Council with effect from November1, 1993, and
in accordance with its agreements with hydroelectric power
projects subject to its dispatch. Power generation companies are
also required to enter into on-grid dispatch agreements with
power grid companies. As a result, there is competition for
favorable dispatch treatment in Chinas electric power industry,
especially during the off-peak periods. Our ability to sell
electricity depends on the dispatch and allocation determined by
the dispatch requirements of the local grids to which we sell our
electricity. We therefore do not compete directly with other
power producers to sell the electricity we generate, but instead,
to sell the electricity solely through the local grids. As a
generator of renewable energy, hydroelectric power projects are
technically entitled to preferential treatment in dispatchment
over thermal power projects. This factor has led to increased
interest in and support to hydropower in China.

Competition may come from Chinas five biggest power generating
companies, which are all state-owned enterprises and currently
operate primarily coal-fired power projects but have become
increasingly interested in hydroelectric power projects and other
forms of renewable energy. These companies have excellent
relationships with the power grids, which provide them an
advantage when introducing new plants to a grid. Certain smaller
China-based and overseas listed power companies are also seeking
to acquire hydroelectric power projects in China. Hydroelectric
power projects in China are also attractive investments for
international investors seeking to generate and trade certified
emissions reduction credits. We believe these local and foreign
companies are acquiring hydroelectric power projects along with
other renewable energy operations and lack the segment focus that
our Company has. While we are aware of their activities in the
market, we have not experienced direct competition with them to
date for project acquisition. We may also encounter some
competition from venture capital and private equity funds,
leveraged buyout funds and other foreign funded entities
interested in acquiring hydropower assets in China. We believe we
have the expertise and experience in the hydropower sector to
compete effectively with these players.

Hospitality Segment

Our Hospitality Segment will operate hotels which will seek to
attract customers largely on the basis of the location of the
Hotel Brands in regions of superior natural scenery. Domestic and
international tourists traveling within the PRC have many choices
for destinations that offer similar benefits, including Guilin,
Tibet, Gansu and Ningxia, and Yunnan Province. Our competitive
advantage in the tourism market in the PRC is linked to Xiaojin
County and Sichuan Province maintaining their appeal to domestic
and international tourists. We believe that our main competitive
advantage will be enhanced brand value and attention to high
quality service. Chinese online travel companies and mobile
applications rank hotels by customer feedback, and we are
committed to maintaining a top quality online presence with
regard to customer satisfaction.

GOVERNMENT REGULATION

This section sets forth a summary of the most significant PRC
regulations that affect our business and the industry in which we
operate.

We operate our business in China under a legal regime consisting
of the State Council, or China central government, and several
ministries and agencies under its authority, including the
Ministry of Commerce, the State Administration for Industry and
Commerce, the State Administration of Foreign Exchange, the
National Development and Reform Commission, the Ministry of Water
Resources, the Ministry of Environmental Protection, the Ministry
of Land and Resources, the Ministry of Housing and Urban-Rural
Development, the State Administration of Taxation, and the State
Electricity Regulatory Commission. From time to time, these
authorities issue regulations that apply to our business.

Regulations Relating to Foreign
Investment

On December27, 2011, the National Development and Reform
Commission and the Ministry of Commerce jointly promulgated a
revised Catalogue for the Guidance of Foreign Investment
Industries, or the Catalogue, which came into effect on
January30, 2012. The Catalogue lists those industries and
economic activities in which foreign investment in China is
encouraged, restricted or prohibited. to the Catalogue,
construction and operation of hydroelectric power projects with
the main purpose of power generation fall within the encouraged
category.

The principal PRC regulations in connection with foreign
investment include:

		The Sino-foreign Equity Joint Venture Law (1979), as amended;
	The Regulations of Implementation of the Sino-foreign Equity Joint Venture Law (1983), as amended;
	The Wholly Foreign-owned Enterprise Law (1986), as amended;
	The Detailed Rules of the Wholly Foreign-owned Enterprise Law (1990), as amended;
	The Company Law of the PRC (1993), as amended;
	The Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (2009);
	The Interim Administrative Measures on Foreign Investment (2004);
	The Circular Regarding Further Strengthening and Regulating the Administration of Foreign Invested Projects issued by the National Development and Reform Commission (2008).
	Circular of the General Office of the State Council on the Establishment of Security Review System Regarding Mergers and Acquisitions in China by Foreign Investors (2011)

Generally, the acquisitions of domestic enterprises by foreign
investors in China are subject to the prior approvals of the
National Development and Reform Commission and the Ministry of
Commerce, or their local counterparts. After obtaining the
approvals from the National Development and Reform Commission and
the Ministry of Commerce, the change of shareholders must be
registered with the State Administration for Industry and
Commerce or its local counterparts and other alteration
registrations shall be filed with the government authorities in
charge of foreign exchange, customs, tax, land,etc. The
acquisition of hydropower plants may also be subject to security
review.

Environmental Protection Regulations

Pollution and Pollutants

In accordance with the China Environmental Protection Law adopted
on December 26, 1989, the Administration Supervisory Department
of Environmental Protection of the State Council sets the
national guidelines for the discharge of pollutants. The PRCs
provincial governments, autonomous regions and municipalities may
also set their own guidelines for the discharge of pollutants
within their own provinces or districts in the event that the
national guidelines are inadequate. A company which causes
environmental pollution and discharges other polluting materials
which endanger the public should implement environmental
protection methods and procedures into their business operations.
This may be achieved by setting up a system of accountability
within the companys business structure for environmental
protection, adopting effective procedures to prevent
environmental hazards such as waste gases, water and residues,
dust powder, radioactive materials and noise arising from
production, construction and other activities from polluting and
endangering the environment. The environmental protection system
and procedures should be implemented simultaneously with the
commencement of and during the operation of construction,
production and other activities undertaken by the company. Any
company which discharges environmental pollutants should report
and register such discharge with the Administration Supervisory
Department of Environmental Protection and pay any fines imposed
for the discharge. A fee may also be imposed on the company for
the cost of any work required to restore the environment to its
original state. Companies which have caused severe pollution to
the environment are required to restore the environment or remedy
the effects of the pollution within a prescribed time limit. If a
company fails to report and/or register the environmental
pollution it caused, it will receive a warning or be penalized.
Companies that fail to restore the environment or remedy the
effects of the pollution within the prescribed time will be
penalized or have their business licenses terminated. Companies
that have polluted and endangered the environment must bear the
responsibility for remedying the danger and effects of the
pollution, as well as to compensate any losses or damages
suffered as a result of such environmental pollution.

We believe that our operations in the PRC comply with the current
environmental protection requirements and will continue to
evaluate the proposed environmental regulations. We are not
subject to any admonition, penalty, investigations or inquiries
imposed by the environmental regulators, nor are we subject to
any claims or legal proceedings to which we were named as a
defendant for violation of any environmental laws and
regulations.

Regulation of foreign exchange.

The PRC government imposes restrictions on the convertibility of
the RMB and on the collection and use of foreign currency by PRC
entities. Under current regulations, the RMB is convertible for
current account transactions, which include dividend
distributions, and the import and export of goods and services.
Conversion of RMB into foreign currency and foreign currency into
RMB for capital account transactions, such as direct investment,
portfolio investment and loans, however, is still generally
subject to the prior approval of or registration with SAFE.

Under current PRC regulations, foreign-invested enterprises such
as our PRC subsidiaries are required to apply to SAFE for a
Foreign Exchange Registration Certificate for Foreign-Invested
Enterprise. With such a certificate (which is subject to review
and renewal by SAFE on an annual basis), a foreign-invested
enterprise may open foreign exchange bank accounts at banks
authorized to conduct foreign exchange business by SAFE and may
buy, sell and remit foreign exchange through such banks, subject
to documentation and approval requirements. Foreign-invested
enterprises are required to open and maintain separate foreign
exchange accounts for capital account transactions and current
account transactions. In addition, there are restrictions on the
amount of foreign currency that foreign-invested enterprises may
retain in such accounts.

Regulation of foreign exchange in certain onshore and
offshore transactions.

SAFE issued a public notice, or SAFE Circular 75, in October 2005
requiring PRC residents to register with the local SAFE branch
before establishing or controlling any company outside of China
for the purpose of capital financing with assets or equity
interests in any onshore enterprise located in China, referred to
in the notice as a special purpose company. On July 4, 2014, SAFE
issued the SAFEs Notice on Relevant Issues Concerning Foreign
Exchange Administration for PRC Residents to Engage in Outbound
Investment and Financing and Inbound Investment via Special
Purpose Vehicles, or SAFE Circular 37, which has superseded SAFE
Circular 75. Under SAFE Circular 75, SAFE Circular 37 and other
relevant foreign exchange regulations, PRC residents who make, or
have previously made, prior to the implementation of these
foreign exchange regulations, direct or indirect investments in
offshore companies will be required to register those
investments. In addition, any PRC resident who is a direct or
indirect shareholder of an offshore company is also required to
file or update the registration with the local branch of SAFE,
with respect to that offshore company for any material change
involving its round-trip investment, capital variation, such as
an increase or decrease in capital, transfer or swap of shares,
merger, division, long-term equity or debt investment or the
creation of any security interest. If any PRC shareholder fails
to make the required registration or update the previously filed
registration, the PRC subsidiary of that offshore parent company
may be prohibited from distributing their profits and the
proceeds from any reduction in capital, share transfer or
liquidation to their offshore parent company, and the offshore
parent company may also be prohibited from injecting additional
capital into its PRC subsidiary.

In addition, on August 8, 2006, six PRC regulatory authorities,
including the Ministry of Commerce, the State Assets Supervision
and Administration Commission, the State Administration for
Taxation, the State Administration for Industry and Commerce, the
CSRC and SAFE, jointly issued the Regulations on Mergers and
Acquisitions of Domestic Enterprises by Foreign Investors, or the
New MA Rules, which became effective on September 8, 2006. This
regulation, among other things, includes provisions that purport
to require that an offshore special purpose vehicle formed for
purposes of overseas listing of equity interests in PRC companies
and controlled directly or indirectly by PRC companies or
individuals obtain the approval of the CSRC prior to the listing
and trading of such special purpose vehicles securities on an
overseas stock exchange. On September 21, 2006, the CSRC
published on its official website procedures regarding its
approval of overseas listings by special purpose vehicles. The
CSRC approval procedures require the filing of a number of
documents with the CSRC and it would take several months to
complete the approval process.

Regulations on dividend distribution

The principal PRC regulations governing the distribution of
dividends by foreign-invested enterprises include:

		The Sino-foreign Equity Joint Venture Law (1979), as amended;
	The Regulations of Implementation of the Sino-foreign Equity Joint Venture Law (1983), as amended;
	The Wholly Foreign-owned Enterprise Law (1986), as amended;
	The Detailed Rules of the Wholly Foreign-owned Enterprise Law (1990), as amended;
	Foreign Currency Administration Rules (1996), as amended;
	The Company Law of China (1993), as amended;
	The Enterprise Income Tax Law of China; and
	The Implementation Regulations of Enterprise Income Tax Law of China.

Under the above-mentioned regulations, foreign-invested
enterprises in China may pay dividends only out of their
accumulated profits, if any, determined in accordance with PRC
accounting standards and regulations. In addition, wholly
foreign-owned enterprises in China are required to set aside at
least 10.0% of their after-tax profits each year, if any, to fund
the reserve fund unless such reserve fund has reached 50.0% of
their respective registered capital and to set aside a percentage
of their after-tax profits to their employee bonus and welfare
fund which is decided by their respective board of directors.
Sino-foreign equity joint ventures are required to set aside
their reserve fund, enterprise development fund and employee
bonus and welfare fund at percentages that are decided by their
respective board of directors. PRC domestic companies are
required to set aside at least 10.0% of their after-tax profits
each year, if any, to fund their respective statutory reserve
fund unless such fund has reached 50.0% of their respective
registered capital. These reserves are not distributable as cash
dividends.

SAFE regulations on employee share
options.

In December2006, the Peoples Bank of China promulgated the
Administrative Measures of Foreign Exchange Matters for
Individuals or the Peoples Bank of China Regulation. In
January2007, the State Administration of Foreign Exchange issued
implementing rulesfor the Peoples Bank of China Regulation,
which, among other things, specified approval requirements for
certain capital account transactions such as a PRC citizens
participation in the equity incentive plan of an overseas
publicly listed company. On March28, 2007, the State
Administration of Foreign Exchange issued the Operating
Procedures on Administration of Foreign Exchange regarding PRC
Individuals Participation in Employee Share Ownership Plans and
Employee Stock Option Plans of Overseas Listed Companies, or the
Stock Option Rule. The purpose of the Stock Option Ruleis to
regulate foreign exchange administration of PRC citizens who
participate in equity incentive plans of overseas-listed
companies. The Stock Option Rulewas replaced by the Notice of the
State Administration of Foreign Exchange on Issues Related to
Foreign Exchange Administration in Domestic Individuals
Participation in Equity Incentive Plans of Companies Listed
Abroad, or the New Stock Option Rule, which was issued on
February15, 2012.

According to the New Stock Option Rule, PRC residents who are
granted shares or stock options by companies listed on overseas
stock exchanges based on the stock incentive plans are required
to register with the State Administration of Foreign Exchange or
its local branches. to the New Stock Option Rule, PRC residents
participating in the stock incentive plans of overseas listed
companies shall retain a qualified PRC agent, which could be a
PRC subsidiary of such overseas publicly-listed company or
another qualified institution selected by such PRC subsidiary, to
conduct the registration with the State Administration of Foreign
Exchange and other procedures with respect to the stock incentive
plans on behalf of these participants. Such participants must
also retain an overseas entrusted institution to handle matters
in connection with their exercise of stock options, purchase and
sale of corresponding stocks or interests, and fund transfer. In
addition, the PRC agents are required to amend the registration
the State Administration of Foreign Exchange with respect to the
stock incentive plan if there is any material change to the stock
incentive plan, the PRC agents or the overseas entrusted
institution or other material changes. The PRC agents shall, on
behalf of the PRC residents who have the right to exercise the
employee share options, apply to the State Administration of
Foreign Exchange or its local branches for an annual quota for
the payment of foreign currencies in connection with the PRC
residents exercise of the employee share options. The foreign
exchange proceeds received by the PRC residents from the sale of
shares under the stock incentive plans granted and dividends
distributed by the overseas listed companies must be remitted
into the bank accounts in the PRC opened by the PRC agents before
distribution to such PRC residents. In addition, the PRC agents
shall file each quarter the form for record-filing of information
of the Domestic Individuals Participating in the Stock Incentive
Plans of Overseas Listed Companies with the State Administration
of Foreign Exchange or its local branches.

In addition, the State Administration for Taxation has issued
circulars concerning employee stock options. Under these
circulars, our employees working in China who exercise stock
options will be subject to PRC individual income tax. Our PRC
subsidiary has obligations to file documents related to employee
stock options with relevant tax authorities and to withhold
individual income taxes of those employees who exercise their
stock options. If our employees fail to pay their income taxes,
or we fail to withhold them, we may face sanctions imposed by the
tax authorities or other PRC government authorities.

We do not currently have any share option plans. Although further
clarification is required as to how the Share Option Rule will be
interpreted or implemented, we believe that if we were to adopt
such a plan, we and our PRC employees who have been granted share
options will be subject to the Share Option Rule when our company
becomes an overseas listed company. If we or our PRC employees
fail to comply with the Share Option Rule, we and/or our PRC
employees may face sanctions imposed by foreign exchange
authority or any other PRC government authorities.

Regulations Relating to Labor and Social
Insurance

We are subject to various labor laws and regulations in the PRC
including but not limited to the PRC Labor Law, the PRC Labor
Contract Law, the Implementation Regulations of the PRC Labor
Contract Law, the PRC Social Insurance Law (promulgated on
October28, 2010 with effect from July1, 2011), the Regulations of
Insurance for Work-related Injury, the Interim Provisions on
Registration of Social Insurance and the Interim Regulations on
the Collection and Payment of Social Insurance Premiums. to the
PRC Labor Law and the PRC Labor Contract Law, labor contracts in
written form shall be executed to establish labor relationship
between our employees and our company. We must provide wages
which are no lower than local minimum wage standards to our
employees. We are required to establish a system for labor safety
and sanitation, strictly abide by State rulesand standards and
provide relevant education to our employees. Violations of the
PRC Labor Contract Law and the PRC Labor Law may result in the
imposition of fines and other administrative liabilities.
Criminal liability may arise in serious cases.

The amendment ofPRC Labor Contract Lawwas issued on
December28,2012and was effective from July1,2013.The amended
labor contract law enhances the protection of the dispatched
workers, who shall be entitled to equal pay for equal work as the
permanent staff members of an employing unit. The employment by
labor dispatching is only a supplementary form, which shall apply
only to temporary (no more than 6 months), auxiliary or back-up
positions.

According to the Regulations of Insurance for Work-related Injury
effective as of January1, 2004 (which was amended on December8,
2010 with effect from January1, 2011), employers in China shall
pay the work-related injury insurance fees for their employees,
and their employees do not pay the work related injury insurance
fees.

According to the Interim Regulation on the Collection and Payment
of Social Insurance Premiums effective as of January22, 1999 and
Interim Measures concerning the Management of the Registration of
Social Insurance effective as of March19, 1999, employers in
China shall conduct the registration of social insurance with the
competent authorities, and make contributions to the basic
pension insurance, basic medical insurance and unemployment
insurance for their employees.

According to Interim Measures concerning the Maternity Insurance
for Employees of Enterprises effective as of January1, 1995, the
employers in China shall pay the maternity insurance fees not
more than one percent of an employees total salary for their
employees, and their employees do not pay the maternity insurance
fees.

According to Regulations on the Management of Housing Fund
effective as of April3, 1999, employers in China shall conduct
the registration of housing fund with the competent authorities,
open the relevant account with the designated banks and pay the
housing fund equal to not less than five percent of an employees
monthly average salary in the last year for their employees.

On October28, 2010, Social Insurance Law of the PRC was
promulgated, which took effect on July1, 2011. to the Social
Insurance Law, the government will establish a social insurance
system including basic endowment insurance, basic medical
insurance, employment injury insurance, unemployment insurance
and maternity insurance. An employer must, within 30 days from
the date of its formation, apply to local social insurance agency
for social insurance registration. Where an employer fails to
apply for social insurance registration, the social insurance
administrative department will order it to take remedial measures
within a prescribed time limit. Failure to implement these
measures within the prescribed time limit will lead to a fine of
1 to 3 times the amount of the social insurance premiums due and
payable. The social insurance administrative department may also
impose a fine of not less than RMB500 but not more than RMB3,000
upon persons primarily responsible for such failure.

According to the Interim Measures for Participation in the Social
Insurance System by Foreign Nationals Working within the
Territory of China, effective on October15, 2011, foreigner
nationals legally recruited and employed by enterprises duly
registered within the territory of China must participate in
basic social insurance, with social insurance premiums to be
contributed respectively by themselves and their employer as
required.

Value-added Tax

According to the amended Provisional Regulations of the PRC on
Value-added Tax effective on January1, 2009, and the amended
Detailed Rulesfor the Implementation of the Provisional
Regulations of the PRC on Value-added Tax effective since
November1, 2011, all organizations and individuals engaged in the
sale of goods, provision of processing, repairs and replacement
services, and importation of goods within the territory of the
PRC are taxpayers of value-added tax. Ordinary tax payers shall
pay value-added tax at the rate of 13% or 17%, while small scale
tax payers shall pay value-added tax at the rate of 3%. According
to the Notice Regarding the Application of Low Value-added Tax
Rate and Simplified Method Taxation Policies to Certain Products,
or the Notice, which was jointly issued by the Ministry of
Finance and the State Administration of Taxation on January19,
2009 and took effect, retrospectively, on January1, 2009, small
hydropower generation units administrated at or below the county
level may choose to apply the value-added tax rate of 6% in
accordance with the simplified method to electric power they
generate. Small hydropower generation units are defined as
hydropower generation units with the installed capacity of no
greater than 50 MW. The value-added tax payers using simplified
method cannot claim the input value-added tax credits on their
purchases.

Regulation in Relation to Land

All land in China is either state owned or collectively owned,
depending on the location of the land. All land in the urban
areas of a city or town is state owned, and all land in the
suburban areas of a city or town and all rural land are, unless
otherwise specified by law, collectively owned. The State has the
right to expropriate or requisition with compensations land in
accordance with law if required for the benefit of the public.

In April1988, the Constitution of China, or the Constitution, was
amended by the National Peoples Congress to allow for the
transfer of land use rights for value. In December1988, the Land
Administration Law was amended to permit the transfer of land use
rights for value.

In accordance with the Land Administration Law amended in 2004,
the construction unit shall obtain the state-owned land use
rights through grant or by other means with consideration. But
the following land may be obtained through governmental
allocation with the approval of the peoples governments at and
above the county level according to law:

		Land for use by government organs and for military use;
	Land for building urban infrastructure and for public welfare undertakings;
	Land for building energy, communications and water conservancy and other infrastructure projects heavily supported by the State; and
	Other land as provided for by the law and administrative decrees.

Under the Provisional Regulations of China concerning the Grant
and Assignment of the Land Use Right of State-owned Land in Urban
Areas, or the Urban Land Regulations, promulgated in May1990,
local governments at or above county level have the power to
grant land use rights for specific purposes and for a definite
period to a land user to a contract for the grant of land use
rights against payment of a grant premium.

Under the Urban Land Regulations, all local and foreign
enterprises are permitted to acquire land use rights unless the
law provides otherwise. The State may not resume possession of
lawfully granted land use rights prior to expiration of the term
of grant. If public interest requires the resumption of
possession by the State under special circumstances during the
term of grant, compensation must be paid by the State. A land
user may lawfully assign, mortgage or lease its granted land use
rights to a third party for the remainder of the term of grant.
Under the Urban Land Regulations, there are different maximum
periods of grant for different uses of land: 70 years for
residential purposes; 40 years for commercial, tourism and
entertainment purposes; 50 years for industrial, public
utilities, comprehensive or other purposes.

On October22, 2001, the Ministry of Land and Resources
promulgated the Catalogue of Allocated Land, according to which,
for infrastructure facilities projects, such as energy,
transportation and water resources heavily supported by the
State, the land use rights may be allocated; for the
infrastructure facilities projects, such as energy,
transportation and water resources which are aimed at
profit-making and not heavily supported by the State, land use
rights shall be supplied for value.

On March16, 2007, the National Peoples Congress promulgated the
Properties Rights Law of China effective from October1, 2007,
which stipulates that the construction land use rights may only
be created through grant or allocation. For land used for
industrial, business, entertainment or commercial residential
purposes, the construction land use rights must be granted by
means of public tender, auction or listing-for-sale. To create
the construction land rights through allocation is stringently
restrained. For adopting such means of allocation, the provisions
on land uses in the laws and administrative regulations must be
observed.

On January3, 2008, the State Council promulgated the Notice of
the State Council Regarding Promoting Saving and Intensive Use of
Land, according to which, except for the lands used for military,
social security housing and special purposes, it is promoted that
the use of land for governmental offices, transportation, energy,
water resources and other infrastructures (industries) shall be
compensated. In particular, the compensated use of land should be
applied to those lands used for commercial purposes firstly. As a
result, we expect to be required to pay compensation for some or
all of the allocated land occupied by our hydroelectric power
projects.

On March5, 2011, the State Council issued the Regulations on Land
Reclamation, which was effective on the same date.On December27,
2012,the Ministry of Land and Resources promulgated Measures for
the Implementation of the Regulation on Land Reclamation, which
is effective from March1, 2013.According to the regulationsand
its implementation measures, land reclamation means the
activities of adopting rectification measures on land damaged by
production or construction activities or natural disasters to
restore the land to usable condition. With respect to reclaiming
the land, the land damaged by production or construction
activities shall be reclaimed by the production or construction
entity according to the principle of reclamation by the party
causing the damage. The party responsible for rehabilitating the
land shall submit the land reclamation plan together with the
other relevant materials when filing an application for
construction land or mining rights. If such party fails to
prepare the land reclamation plan or the land reclamation plan
fails to meet the relevant requirements, the application will be
denied.

Regulations on Construction

to the Construction Law, effective from March1, 1998 and amended
on April22, 2011 with effect from July1, 2011, prior to the start
of construction projects, project owners must, in accordance with
relevant provisions of the State, apply to competent construction
administrations at or above the county level of the place where
the project is to be located for construction permits, except for
small projects below a value set by the competent construction
administration of the State Council.

Regulation of Power

The Electric Power Law, which became effective on April1, 1996,
Regulation on the Administration of Electric Power Dispatch to
Networks and grids effective on November1, 1993 and the
Regulations on Electric Power Supervision and Administration,
which became effective on May1, 2005, set out the regulatory
framework of the power industry in China. to this framework the
on-grid tariffs are approved and supervised by China government,
and all power projects in China are subject to the dispatch of
the power they produce by power grid companies assigned to them.

Regulation of On-grid Tariffs

On February10, 2002, the State Council promulgated the Issuance
of the Reform Plan for the Electric Power System Circular,
according to which, in the long-term on-grid tariff will be
gradually determined by market competition.

On April6, 2007, the General Office of the State Council issued
the Opinions on Implementing Further Reform in Electric Power
Industry during the Eleventh Five-year Plan Period, which
confirms, among other things, the continuance of further reform
of tariff, establishment of the formation system of on-grid
tariff corresponding to the competition in power generation
segment, execution of the tariff policies favorable to energy
saving and environmental protection, and full implementation of
the tariff scheme stimulating the development of clean energy.

The Electric Power Law, effective from April1, 1996, provides the
general principles for determining tariffs, which are intended to
include reasonable compensation for costs, a reasonable profit
and tax, to share expenses fairly and to promote the construction
of power projects.

In April23, 2001, the former State Development and Planning
Commission, the predecessor to the National Development and
Reform Commission, issued a notice containing guidelines for
tariff administration. to the notice, a new on-grid
tariff-setting mechanism, based on the operating term of power
stations as well as the average costs of comparable advanced
power stations adopting the same type of techniques that were
constructed during the same period within the same provincial
power grid, was gradually implemented.

On July9, 2003, the State Council promulgated the Tariff Reform
Scheme. In accordance with the Tariff Reform Scheme, the
direction of the reform of the on-grid tariff is to introduce a
competitive mechanism in all respects and the tariff shall be set
through the competition of supplying and demanding parties.
During the transition period, the on-grid tariff is mainly
implemented by a two-part tariff system, among which, capacity
tariff shall be set by the government and the energy tariff shall
be set by market competition. Competitive bidding for a portion
of the energy tariff and other transition methods may also be
adopted according to actual situations.

On March28, 2005, the National Development and Reform Commission
issued the Interim Measures on Regulation of On-grid Tariff, the
Interim Measures on Regulation of Transmission and Distribution
Tariff, and the Interim Measures on Regulation of End-user
Tariff, to provide guidance for the reform of the tariff-setting
mechanism in the transition period.

The National Development and Reform Commission issued the Trial
Measures for the Administration of the Tariff of, and the Sharing
of Costs in Connection with, Power Generation Using Renewable
Energy Resources, or the Trial Measures, on January4, 2006,
however, the Trial Measures explicitly stipulate that the
mechanism for setting the tariff after tax for hydroelectricity
be in accordance with prevailing regulations for the time being.

On July25, 2007, the State Electricity Regulatory Commission
promulgated the Supervision and Administration Measures on the
Full Purchase of Electricity of Renewable Energy Resources by
Grid Enterprises effective from September1, 2007. The Measures
provide that except for large or medium hydroelectric power
projects, renewable energy power generators will not participate
in competitive bidding for on-grid tariffs. If hydropower
generators with the electricity fully purchased by grid companies
are engaged in any transaction in the power market, they shall
comply with relevant rulesand regulations of the State
Electricity Regulatory Commission.

Regulation of Distributed Power
Generation

On July18, 2013, the Interim Measures on Distributed Power
Generation (the Interim Measures) was issued by the National
Development and Reform Commission for the purpose of encouraging
enterprises, professional resource service companies and
individuals to invest in and to operate distributed power
generation projects by exempting the electric power business
permits of the distributed power generation projects. The
distributed power generation applies to the
small-sizehydroelectric power plantswith total installed capacity
of no more than 50 MW. In accordance with the Interim Measures,
power grid enterprises shall simplify the procedures of
grid-connected application and provide consulting, moderating and
grid-connected testing service for the distributed power
generation connected with the distribution network of no more
than 35KV. As for the small-sizehydroelectric power plants and
other distributed power generation connected with the
distribution network of no more than 35KV, the power grid
enterprises shall manage the grid connection work based on the
principle of convenience and efficiency.

Regulation of Power Dispatch

On November1, 1993, the Regulations on the Administration of
Electric Power Dispatch to Networks and Grids, or the Dispatch
Regulations, became effective. The Dispatch Regulations apply to
all power projects in China and require them to generate power in
accordance with their grid connection agreements.

On August2, 2007, the State Council approved the Measures on
Dispatch of Energy Saving Power Generation (For Trial
Implementation), or the Trial Dispatch Measures, jointly issued
by the National Development and Reform Commission, the State
Electricity Regulatory Commission, the former State Environmental
Protection Bureau, the predecessor of the Ministry of
Environmental Protection and Office of the National Energy
Leading Group. to the Trial Dispatch Measures, the dispatch
priority of power generation units is determined in the following
sequence: (a)non-adjustable power generation units utilizing
renewable energy (including hydraulic energy); (b)adjustable
power generation units utilizing renewable energy (including
hydraulic energy) and garbage generator units which meet the
requirements of environmental protection; (c)nuclear power
generation units; (d)coal- fired heat-load based CHP units and
multiple resource power generation units; (e)gas-fired power
generation units; (f)coal-fired power generation units, including
cogeneration units without heat load; and (g)oil-fired power
generation units.

The Provisions on the Administration of Electric
Power Business Permits

On October13, 2005, the State Electricity Regulatory Commission
promulgated the Provisions on the Administration of Electric
Power Business Permits, which came into effect on December1,
2005. to this regulation, public power projects, grid-connected
self-provided power projects, and other projects as prescribed by
the State Electricity Regulatory Commission shall apply for and
procure power generation permits. The enterprises failing to
obtain power generation permits and illegally conducting power
business shall be ordered to obtain the permits and any illegal
income shall be forfeited, with fines up to five times the
illegal income being imposed. If a crime is constituted, criminal
liability shall arise.

Regulations Relating to Transfer of State-Owned
Assets

Under the Interim Measures for the Management of the Transfer of
State-owned Assets of Enterprises, or the Interim Measures,
jointly promulgated by the State-owned Assets Supervision and
Administration Commission of the State Council, and the Ministry
of Finance, with the effective date on February1, 2004, the
transfer of state-owned assets can be carried out by auction,
bidding, agreement or other means that are permitted under the
PRC laws and regulations. A seller of state-owned assets must
appoint an asset valuation institution to evaluate the
to-be-transferred assets and the valuation report, after being
confirmed by or filed with relevant authority in charge of
state-owned assets administration, shall be referenced to
determine the transfer price. In case the transfer price is lower
than 90% of the valuation result, the transaction shall be
suspended and shall not proceed until being approved by relevant
approval authorities.

On December31, 2006, the State-owned Assets Supervision and
Administration Commission and the Ministry of Finance jointly
issued the Circular on Some Issues Relevant to the Transfer of
State-owned Assets of Enterprises, or the Circular. to the
Circular, the state-owned assets are permitted to be transferred
over the counter only under the following two (2)circumstances
with the approval of the State-owned Assets Supervision and
Administration Commission or the State-owned Assets Supervision
and Administration Commission offices at provincial level and at
the set price:

(1)Where there are special requirements on the transferee in the
restructuring of the key industries and sectors of national
economy; or

(2)Where the direct transfer by agreement is necessary in the
internal assets reorganization of the invested enterprises that
is the enterprises supervised by relevant state-owned assets
regulatory authorities as the investors, and the transferor and
the transferee should both be the invested enterprises or their
wholly invested or absolutely controlled enterprises.

According to the Circular, in the event that the proposed
state-owned assets are to be transferred to a foreign investor,
such transfer shall proceed publicly in a related assets exchange
market. If the agreement must necessarily be conducted by
agreement, the requirements on transfer by agreement specified by
the Interim Measures and the Circular shall be all satisfied. If
the foreign investors are potential transferees and the target
assets belong to the sectors in which foreign capital is
restricted or forbidden to be invested in accordance with the
Catalogue for the Guidance of Foreign Investment Industries and
other applicable PRC laws and regulations, the transferor shall
indicate the relevant information publicly to remind the
potential transferees. If a foreign investor becomes the
transferee in the assets exchange market, the transferor shall
obtain approval from relevant governmental authorities in
accordance with applicable laws and regulations.

Regulations on the Safety Management of the
Hydroelectric Power Plants

On November29, 2013, the Ministry of Water Resource issued the
Urgent Notice on the Safety Management of the Hydroelectric Power
Plants. In accordance with the notice, the hydroelectric power
plants shall check the hidden dangers, establish safety
management system and liability system, enhance the relevant
safeguard measures and deliver the information in time in case of
emergency.

Regulations on Environmental Protection in
Construction Projects

All hydropower stations in China are subject to the Environmental
Protection Law, the Environmental Impact Evaluation Law, the Law
on the Prevention and Treatment of Water Pollution, the Law on
the Prevention and Treatment of Air Pollution and the Law on
Ocean Environment Protection, or collectively, the National
Environmental Laws, relevant administrative regulations,
ministerial rulesand the environmental rulespromulgated by the
local governments in which jurisdictions the hydropower stations
are located. According to the National Environmental Laws, the
State Environmental Protection Administration, the predecessor of
the Ministry of Environmental Protection, sets national
pollutants emission standards and provincial governments may set
their local standards for the pollutant emission not specified in
the national standards, and set stricter local standards which
are required to be filed at the State Administration for
Environmental Protection, the predecessor of the Ministry of
Environmental Protection. Enterprises discharging pollutants in
areas where the local standards for pollutant emission have been
set shall observe such local standards.

to the Environmental Impact Evaluation Law promulgated on
October28, 2002, the Administrative Ruleson Environmental
Protection of Construction Projects promulgated on November29,
1998, and Administrative Measures on Environmental Protection
Acceptance upon Completion of Construction Projection promulgated
on December27, 2001, enterprises are required to engage qualified
and certified institutions to provide environmental impact
evaluations on construction projects and to prepare environmental
impact assessments. Construction of any new hydroelectric power
project or expansion of an existing hydroelectric power project
may only commence after such an assessment is submitted to and
approved by the relevant environmental protection administrative
authority.

According to the Classified Directory for Environmental
Protection and Administration of Construction Projects,
promulgated on September2, 2008 by the Ministry of Environmental
Protection and effective on October1, 2008, the construction of
hydroelectric power projects are required to prepare
environmental impact assessment forms except for those with total
installed capacity of 1,000.0KW or above, pumped storage power
stations and hydroelectric power projects in environmental
sensitive areas being required to prepare environmental impact
assessment reports. In accordance with the Environmental Impact
Evaluation Law, construction of any hydropower station is
prohibited without the approval of the relevant government
authorities of such environmental report or form and the related
underlying documents if construction of a hydropower station
occurs without such governmental approval, whether by failing the
evaluation or not applying for an evaluation, then the relevant
enterprise will be ordered to cease construction and be subject
to making up relevant procedures within a prescribed time period
with the relevant environmental protection administrative
authorities. Enterprises that fail to complete such formal
procedures within the prescribed time may be fined, and the
management and other personnel with direct responsibility for the
enterprise are subject to administrative penalties. The National
Environmental Laws generally impose discharge fees for polluting
substances, and provide for possible closure by the central or
local government of any enterprise which fails to comply with
orders requiring it to cease or rectify the activities causing
environmental damage.

In accordance with the Administrative Ruleson Environmental
Protection of Construction Projects, the Administrative Measures
on the Completion Acceptance of Environmental Protection of the
Construction Projects and other relevant regulations, each
hydroelectric power project must be tested and approved by local
environmental agencies before commissioning, and is subject to
continuous government monitoring after commissioning. After the
completion of the construction of the hydroelectric power
project, it must apply for completion acceptance of environmental
protection.

On December29, 2011, the Ministry of Environment Protection
issued the Notice on Strengthening Environment Impact Assessment
in Southwestern China (the Notice), which became effective on the
same date of its issuance. According to the Notice, the
acceptance for approving environmental assessment documents for
hydroelectric constructing projects shall be supported by an
investigative opinion on the environment impact assessment of the
development plan for the river valleys where such projects are
located. With respect to the river valleys with prior development
history, if no environment impact assessment on the development
plan is available, submission of environmental assessment
documents for the hydroelectric construction projects must be
supported by retrospective researches on the environment impact
assessment of the development.

The Law of Energy Conservation of China

On October28, 2007, the Standing Committee of the National
Peoples Congress adopted amendments to the Law of Energy
Conservation, which sets forth policies to encourage energy
conservation in industrial sector, buildings, transportation,
public institutions and key energy consumption entities. The
amendments also seek to develop small hydroelectric power
generation plants based on the principle of scientific planning
and orderly development.

Regulations on Water and Soil
Conservation

On June29, 1991, the Law of Water and Soil Conservation was
promulgated, which was amended on December25, 2010 with effect
from March1, 2011. On August1, 1993, the Implementation
Regulations on the Law of Water and Soil Conservation were
issued, which were amended on December29, 2010 with effect from
January8, 2011. In accordance with these regulations, when
launching a construction project that may result in water and
soil loss in mountainous areas, upland areas, and sandy areas
with high wind or any other area specified in the water and soil
conservation plan prone to water and soil loss, the construction
entity shall compile a water and soil conservation scheme and
submit it to the water resources authority of the peoples
government at or above the county level for approval. Facilities
for water and soil conservation shall be designed, constructed
and put into operation simultaneously with the principal part of
the construction project and subject to the completion acceptance
by relevant governmental authorities, including the water
resources authority, before the construction project is put into
production. Enterprises shall in the course of construction and
production adopt water and soil conservation measures and shall
be liable to the control of any loss of water and soil. In case
commencing the construction of a construction project, which is
required to compile a water and soil conservation scheme, without
such scheme or without procuring the approval for such scheme,
the water resources authority of the peoples government at or
above the county level shall order the construction entity to
cease the illegal act and go through the relevant formalities
within the prescribed time limit; if it fails to do so, a fine up
to RMB500,000 shall be imposed upon; and disciplinary actions
shall be taken against the directly liable person in charge and
other directly liable persons of the production or construction
entity according to law. Where any entity puts a construction
project into operation without going through completion
acceptance of facilities for water and soil or failing to pass
such completion acceptance, the water resources authority of the
peoples government at or above the county level shall order it to
cease production or use until the completion acceptance is
passed, and a fine up to RMB500,000 shall be imposed upon.

On January29, 2014, the National Development and Reform
Commission, the Ministry of Finance, the Ministry of Water
Resources and the Peoples Bank of China jointly issued the
Administrative Measures for the use of the compensation fees for
water and soil conservation. The enterprises and individuals
shall be obligatedto the compensation fees for water and soil
conservation for the construction projects conducted in the
mountainous area, hilly area, the windy desert region and the
other regions liable to the water and soil loss, which will
result in the unrecoverable water and soil conservation
capability. The compensation fees shall be charged one-time based
on the area of the occupied land.

Regulations on Water Drawing

According to the Water Law, which was promulgated by the Standing
Committee of the National Peoples Congress on August29, 2002 and
took effect on October1, 2002, any legal entity or individual
drawing water directly from rivers, lakes or underground shall
apply to the water administrative departments or the drainage
management departments for a Water Drawing Permit and pay the
water resource fees in order to obtain the water drawing rights
in accordance with the national water drawing system and the
water resource fees system. The State Council is responsible for
stipulating the detailed rulesregarding the implementation of the
Water Drawing Permit system and the collection of water resource
fees.

On February21, 2006, the State Council promulgated the
Administrative Regulations on Water-drawing Permits and the
Collection of Water Resource Fees, or the Water Drawing
Regulations, effective from April15, 2006. to the Water Drawing
Regulations, any entity or individual that draws water resources
shall, other than for the exceptions prescribed in the Water
Drawing Regulations, apply for a Water Drawing Permit and pay
water resource fees. Absence of the water drawing permit or
failure to obtain such a permit may result in the forced
cessation of the water drawing activity, the requirement of
immediate remediation and/or the imposition of fines.

The Water Drawing Regulations also provide that a water-drawing
entity or individual shall pay water resource fees. A
water-drawing entity or individual shall draw water according to
the government-approved annual water drawing plan. For water
drawing exceeding the plan or quota, water resource fees shall be
charged progressively on the excess.

In accordance with the Water Drawing Regulations, the amount of
water resource fees due shall be determined based on the levy
standard of water resource fees at the locality of the water
intake and the actual volume of water for drawing. As for water
drawing for the purpose of hydroelectric power generation, the
amount of water resource fees due may be determined based on the
levy standard of water resource fees at the locality of the water
intake and the actual quantity of electricity generated. When a
water drawing entity or individual refuses to pay, delays, or
otherwise defaults on the payment of water resource fees, the
entity or individual will be subject to the penalties prescribed
under the Water Law.

On April9, 2008, the Ministry of Water Resources promulgated the
Measures for Administration of Water Drawing Permits, or the
Water Drawing Permit Measures. Under the Water Drawing Permit
Measures, for construction projects which need to apply for water
drawing, the applicant shall entrust an organization with
corresponding qualification to prepare a Construction Project
Water Resources Analysis Report. For construction projects which
draw a comparatively low volume of water and have a comparatively
small impact on the surrounding environment, the applicant may be
exempted from complying with the requirement to prepare a
Construction Project Water Resources Analysis Report but should
fill out a Construction Project Water Resources Analysis Form.
The applicant should submit the application documents to the
relevant authority for obtaining the Water Drawing Permit after
the construction of the water-drawing project or facility has
been completed and its trial operation has lasted for 30 days.

On November10, 2008, the Ministry of Finance, the National
Development and Reform Commission and the Ministry of Water
Resources jointly issued the Administrative Measures on the
Collection and Use of Water Resource Fees, or the Water Resource
Fees Measures, effective from January1, 2009. In accordance with
the Water Resource Fees Measures, the water resource fees shall
be levied on a monthly basis. A water-drawing entity or
individual shall submit the volume of water drawn (or the
quantity of electricity generated) to the competent water
resources authority in charge of collection of water resource
fees on a monthly basis and shall make payment of water resource
fees within seven days after receiving the Water Resource Fees
Payment Notice sent by the competent water resources authority in
charge of collection of water resource fees. The Water Resource
Fees Measures further clarify that the levy standard of water
resource fees shall be set by the National Development and Reform
Commission jointly with the Ministry of Finance and the Ministry
of Water Resources with respect to the water conservancy projects
directly under the administration of the PRC central government
or covering different provinces, autonomous regions, or
municipalities directly under the PRC central government whose
water drawing shall be subject to examination and approval of the
drainage area management authority. In addition, the Water
Resource Fees Measures stipulate that the levied water resource
fees are to be exclusively used for water conservation protection
and management, as well as the reasonable development of water
resources.

Regulations on Renewable Energy
Resources

The Law of Renewable Energy Resources of China

On February28, 2005, the Standing Committee of the National
Peoples Congress adopted the Law of Renewable Energy Resources,
or the Renewable Energy Law, effective from January1, 2006. On
December26, 2009, the Standing Committee of the National Peoples
Congress adopted an amendment to the Renewable Energy Law, which
has come into effect on April1, 2010. to the Renewable Energy
Law, the PRC government encourages the development and
utilization of renewable energy resources, including the
connection of renewable energy power generators to local power
grids. to the Renewable Energy Law, the PRC government implements
the development and utilization of renewable energy resources by
encouraging the purchase of all renewable energy generated. The
State Council energy department, in conjunction with the national
power regulatory agency and the State Council finance department,
determines, in accordance with the national renewable energy
development and utilization plan, the proportion of renewable
energy power generation with respect to the overall generating
capacity for the planning period. The grid enterprises must enter
into grid connection agreements with renewable energy power
generation enterprises which have procured administrative permits
or have submitted filings and must purchase all hydro-produced
power meeting the technical standards for grid connection within
their grid coverage. Grid enterprises refusing to purchase power
produced by renewable energy generators may be fined in an amount
up to double the economic loss suffered by the renewable energy
generator. The Renewable Energy Law also authorizes the relevant
pricing authorities to set on grid tariffs based on the
principles in favor of promoting the utilization of renewable
energy and being economically reasonable, and to adjust the
tariffs in accordance with the improvement of the renewable
energy development and utilization technologies. However, the
Renewable Energy Law also stipulates that the application of the
Renewable Energy Law to hydroelectric power is guided by the
department in charge of energy of the State Council and subject
to the approval of the State Council. Such guidance has yet to be
provided by the State Council, and in practice the local grids or
relevant pricing authorities may not always follow the Renewable
Energy Law when purchasing power or setting tariffs.

The Medium and Long Term Development Plan of Renewable Energy
Resources

In light of the rapid growth of China economy and rising
consumption of energy, China government increasingly encourages
the development and use of renewable energy resources. On
August31, 2007, the National Development and Reform Commission
issued the Medium and Long Term Development Plan of Renewable
Energy Resources, or the Medium and Long Term Development Plan.
According to the Medium and Long Term Development Plan, the share
of the development and use of renewable energy accounted for 7.5%
of the primary energy consumption in 2005. It aims to have the
consumption of renewable energy reach 10.0% of the total energy
consumption by 2010, and 15.0% by 2020.

The Guiding Catalogue for the Development of Renewable Energy
Resources Industry

On November29, 2005, in accordance with the Renewable Energy Law,
the National Development and Reform Commission promulgated the
Guiding Catalogue for the Development of Renewable Energy
Resources Industry, or the Guiding Catalogue. Grid-connected
hydroelectric power projects are included in the Guiding
Catalogue. In accordance with relevant provisions of the
Renewable Energy Law, financial institutions may provide
preferential loans with interest subsidies to the development and
utilization projects relating to renewable energy resources which
are included in the Guiding Catalogue and satisfy the credit
requirements. In addition, the Guiding Catalogue contains two
categories of hydropower and four categories of relevant
equipment manufacturing which are encouraged and shall be
entitled to a series of preferential policies in the area of
technology research/development, taxation, pricing,
marketing/sales and import/export, the details of which shall be
promulgated by the State Council. To date, the State Council has
not issued any regulatory guidance to provide relevant details
regarding these preferential policies. Business activities
conducted by us in the development and use of hydroelectric power
are encouraged by the government and we may be entitled to
benefit from these preferential policies once the State Council
issues detailed implementation rules.

The Administrative Regulations on Power Generation of
Renewable Energy Resources

On January5, 2006, the National Development and Reform Commission
promulgated the Administrative Regulations on Power Generation of
Renewable Energy Resources. to this regulation, grid operators
are required to ensure renewable energy power generators are
connected to their power grid.

The Supervision and Administrative Measures on the Full
Purchase of Electricity of Renewable Energy Resources by Grid
Enterprises

On July25, 2007, the State Electricity Regulatory Commission
promulgated the Supervision and Administrative Measures on the
Full Purchase of Electricity of Renewable Energy Resources by
Grid Enterprises effective from September1, 2007. This regulation
further stipulates the grid operators must purchase all the power
generated by renewable energy power generators connected to their
grid. The regulation also provides that except for large or
medium sized hydroelectric power projects, renewable energy power
generators do not need to participate in competitive bidding for
their on-grid tariffs. This regulation also provides that power
dispatch institutions must give priority to renewable power
generation companies when dispatching power.

We believe that we are in material compliance with the current
government regulations discussed above. We are not subject to any
admonition, penalty, investigations or inquiries imposed by any
government regulators, nor are we subject to any claims or legal
proceedings to which we are named as a defendant for violation of
any PRC laws and regulations.

Employees

As of September 30, 2016, we had approximately 43 full time
employees in the PRC. We believe we have good working
relationships with our employees. We are currently not a party to
any collective bargaining agreements.

For our employees in the PRC, we are required to contribute a
portion of their total salaries to the Chinese governments social
insurance funds, including medical insurance, unemployment
insurance and job injuries insurance, as well as a housing
assistance fund, in accordance with relevant regulations. We
expect the amount of our contribution to the governments social
insurance funds to increase in the future as we expand our
workforce and operations.

Our History

We were organized in Nevada on August 7, 2013 under the name At
Play Vacations, Inc. The Company incorporated a wholly-owned
subsidiary, Quality Resort Hotels, Inc. in Florida on August 8,
2013. Originally, we operated as a vacations company that booked
on-line travel, offering low rates on rooms in popular resort
destinations in North America in return for clients to attend
marketing presentations from a local real estate developer. Our
corporate headquarters were located in Punta Gorda, Florida, and
our initial fiscal year end was September 30.

For the period from inception (August 7, 2013) to September 30,
2013, we generated $10,000 from the issuance of 10,000,000 shares
of common stock to our officers and directors of the Company. For
the year ended September 30, 2014, we generated $70,000 from the
issuance of 7,000,000 shares of our common stock during September
2014 and $ 30,000 from the short-term loan from a related party.

On August 7, 2015, founding stockholders and sole directors
Michael Hay and Jake Martin, sold the entirety of their shares,
totaling 10,000,000 shares, to Chua Seong Seng, Lim Wei Lin and
Low Tuan Lee in a private transaction. Effective August 17, 2015,
each of Michael Hay and Jake Martin resigned from their
respective positions as officers of the Company, and Chua Seong
Seng was appointed as the President and Chief Executive Officer,
Lim Wei Lin was appointed as the Secretary, and Low Tuan Lee was
appointed as the Chief Financial Officer and Treasurer of the
Company. Also effective August 17, 2015, Chua Seong Seng, Lim Wei
Lin and Low Tuan Lee were appointed as directors of the Company,
and each of Michael Hay and Jake Martin resigned as directors of
the Company.

On August31, 2015, theBoard of Directors approved a 20:1 forward
split of its common stock, such that shareholders holding shares
of the Company common stock will receive twenty new shares of
common stock for each old share upon surrendered to the Company.

On September 7, 2015, the Company incorporated its wholly-owned
subsidiary Horizon Resources Co. Ltd in the Cayman Islands.

On September 16, 2015, the Company filed a Certificate of
Amendment changing the Companys name to Axiom Holdings, Inc. and
increasing the authorized shares of common stock to 3,000,000,000
shares of common stock, with par value of $0.001 per share, and
50,000,000 shares of preferred stock with a par value of $0.001
per share. The amendment was approved by shareholders holding
58.5% of the issued and outstanding stock.

On October 1,2015, the Board of Directors approved a change in
the Companys fiscal year end from September 30, to December 31.
The Company filed its annual report on Form 10-K for the year
ended September 30, 2015. The Company filed a transition report
for the period from October 1, 2015 through December 31, 2015 on
Form 10-Q/T.

On February 19, 2016, the following occurred with respect to the
management of the Company: (i) Chua Seong Seng resigned as Chief
Executive Officer, President and as a director; (ii) Lim Wei Lin
resigned as Secretary and as a director; and (iii) Low Tuan Lee
was appointed Chief Executive Officer and President, and retained
his position as Chief Financial Officer and director.

In April 2016, the Company determined to discontinue operations
related to on-line travel booking which was performed under the
Companys subsidiary Quality Resort Hotels, Inc.

On June 23, 2016, Quality Resort Hotels, Inc. was legally
dissolved with the state of Florida.

On October 3, 2016, our board of directors of approved the
selection of Anthony Kam Associates Ltd, Certified Public
Accountants as our independent registered public accounting firm
replacing Sadler, Gibb Associates, LLC.

On October 10, 2016, we entered into the Agreement with CJC and
the CJC Shareholders. On December 21, 2016, the Company, CJC, the
CJC Shareholders and Horizon entered into theShare Exchange
Agreement, as amended, to which Horizon agreed to acquire all of
the CJC Shares in exchange for the issuance by the Company to the
CJC Shareholders of 200,000,000 shares of Common Stock. In
connection with the Transactions, the Company canceled
200,000,000 shares of its Common Stock currently outstanding
prior to the closing of the Transactions.

Also on October 10, 2016, the Company appointed Curtis Riley as
the Companys Chief Executive Officer and Chief Financial Officer
to succeed Low Tuan Lee who resigned those positions with the
Company. In addition, Mr. Riley has been appointed as a member of
the Companys board of directors.

RISK FACTORS

You should carefully consider the risks described below and all
other information contained in this report before making an
investment decision. If any of the following risks actually
occur, our business, financial condition and results of
operations could be materially and adversely affected. In that
event, the trading price of our common stock could decline, and
you may lose part or all of your investment. This report also
contains forward-looking information that involves risks and
uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result
of many factors, including the risks described below and
elsewhere in this report.

Risks Related to our Business and Industry

Risk Factors Relating to Our Business

Our operations may be interrupted by realization of
unexpected risks or difficulties in integrating acquired
businesses, which could interrupt our existing business and
materially and adversely affect our results of
operations.

Our continued growth and ability to leverage our management
expertise depend on the successful implementation of our
acquisition strategy. We cannot assure you that any particular
acquisition will produce the intended benefits. For instance, if
we fail to integrate an acquired project into our operations
successfully, or the synergies expected from an integration
ultimately fail to materialize, then our existing business
operations may be interrupted. We may have as a result expended
significant management time, capital and other resources to the
transaction, which interrupted our existing business operations.

Risks which may be incurred through acquisitions include, but are
not limited to:

		potential construction or engineering problems which may expose us to severe economic loss or legal liabilities and require substantial expenditure from us to remediate;
	unforeseen or hidden liabilities, including exposure to legal proceedings, associated with newly acquired companies;
	failure to generate sufficient revenues to offset the costs and expenses of acquisitions;
	potential impairment losses and amortization expenses relating to goodwill and intangible assets arising from any of such acquisitions, which may materially reduce our net income or result in a net loss; and
	possible contravention of Chinese regulations applicable to such acquisitions.

Any one or a combination of the above risks could interrupt our
existing business and materially adversely affect our results of
operations.

We have not obtained formal title certificates to
some of the properties we occupy, which may subject us to
lawsuits or other actions being taken against us and may result
in our loss of the right to operate on these properties and
increased operating expenses.

We have not obtained formal title certificates in respect of the
land that certain of our operating companies use. We are in the
process of completing the legal procedures for obtaining the
relevant title certificates for the parcels of land and buildings
involved and registering them in the name of our operating
companies. However, we may not be able to obtain all of the
formal title certificates. Our rights as owner or occupier of
these properties and buildings may be adversely affected as a
result of the absence of formal title certificates and we may be
subject to lawsuits or other actions taken against us and may
lose the right to continue to operate on these properties. We
intend to use proceeds from funds raised in the equity capital
markets following the Transactions to obtain missing title
certificates for the full legal use of the land we use in our
business.

Energy Business

Our business is dependent upon hydrological
conditions, which may from time to time result in conditions that
are unfavorable to our business operations.

Our hydroelectric power generating prospects are dependent upon
hydrological conditions prevailing from time to time in Sichuan
Province in which our existing and planned hydroelectric power
projects are located. There can be no assurance that the water
flows at our existing and future sites will be consistent with
our expectations, or that climatic and environmental conditions
will not change significantly from the prevailing conditions at
the time our projections were made. Water flows vary each year,
and depend on factors such as rainfall, snowfall, rate of
snowmelt and seasonal changes. We believe that over time, while
annual precipitation levels will typically be above or below
average, such variations will mostly likely average out. However,
our existing and future hydroelectric power projects may be
subject to substantial variations in climatic and hydrological
conditions which may reduce water flow and thus our ability to
generate electricity. While we have selected our hydroelectric
power projects for operation and development in part on the basis
of their projected outputs, the actual water flow required to
produce those outputs may not exist or be sustained. If
hydrological conditions result in droughts or other conditions
that negatively affect our existing or proposed hydroelectric
generation business, our results of operations may be materially
and adversely affected.

We may encounter difficulties in pursuing our
acquisition strategy, which would result in us being dependent
upon our current portfolio of hydroelectric power projects and
having limited revenue growth potential.

If we intend to continue acquiring hydroelectric power projects,
our ability to implement our acquisition strategy depends on a
number of factors, in particular, our ability to maintain our
current portfolio of hydroelectric power projects, identify
suitable acquisition targets, and reach agreements with sellers
for acceptable consideration and on commercially reasonable terms
and secure financing necessary for completing future
acquisitions. There is no guarantee that we have the ability to
pursue acquisition opportunities we identify in the future or the
ability to maintain our current portfolio of power projects. We
do not currently anticipate any major asset purchase in at least
the short term. We cannot assure you that we will not need to
sell energy-related operating assets. In addition, if we decide
to make additional acquisitions in the future, we believe
identifying and acquiring projects on reasonable terms may be
more difficult as domestic and international competitors seek to
acquire small hydroelectric power projects in China. Furthermore,
depending on factors such as the national monetary policy and the
credit market environment in China, in the event that we are in a
position to pursue acquisitions in the future, we may not be able
to secure financing for additional acquisitions. If we are unable
to acquire suitable hydroelectric power projects in China, we
will be dependent upon our existing hydroelectric power projects.
This may result in our dependence upon the performance of our
existing operating plants and upon electricity sales in the
existing geographical areas. It may also subject us to increased
risks associated with drought or other natural disasters in the
existing geographical areas we operate and limit our ability to
grow our revenues and to obtain the benefits of scale that we
anticipate.

The operation of our hydroelectric power projects and
customer demand for our power may be vulnerable to disruptions
caused by natural and man-made disasters, which may materially
and adversely affect our results of operations.

Our hydroelectric power projects could be required to cease
operating in the event of a drought, and to cease operating or
even be damaged in the event of a flood. Water supply to our
hydroelectric power projects and the projects themselves are
vulnerable to natural disasters including, but not limited to,
earthquakes, storms, tornadoes and floods, as well as disasters
caused by human actions such as terrorist attacks, military
conflicts and other deliberate or inadvertent actions which may
affect the availability of water supplies or water flow to our
hydroelectric power projects. Our hydroelectric power projects
are in an area of relatively high seismic risk as compared to
other areas of China. Such disasters are unpredictable and can
significantly damage our access to water supply and power plant
equipment as well as the property of our consumers. For example,
on May 12, 2008, Sichuan Province was struck by an earthquake
measuring 8.0 in surface wave magnitude (Richter scale) and with
an epicenter located 80 kilometers west northwest of Chengdu on
the Longmenshan fault. The Zipingpu Dam, a hydroelectric dam
located 20 kilometers east of the epicenter of the earthquake,
experienced some damage and temporary suspension of activities as
a result of the earthquake. Under such circumstances, market
demand for power in general may be significantly and adversely
affected, reducing the need for the electricity we produce, and
we may be unable to continue operation of our plants or to
produce the level of electricity we expect. Insurance coverage
that we may currently or in the future maintain may not be
adequate to compensate us for all damages and economic losses
which may arise in connection with these disasters. Such
disruption to our operations could materially and adversely
affect our results of operations.

We derive our energy distribution revenues solely
from the sale of hydroelectric power electricity to one customer.
Any prolonged disruption to the demand for hydropower or
termination our customer relationship may cause our revenues to
decrease significantly.

Our energy-related business derives revenues solely from the sale
of electricity generated by our hydroelectric power projects, and
the sole customer for electricity sales by Jitai Power Investment
is National Sichuan Xiaojin County Electricity Supply Company
Ltd. If for any reason this customer reduces or eliminates its
purchases of hydropower, whether due to the emergence of a
cheaper renewable energy source, withdrawal of government policy
support for the dispatch of renewable energy or a severe drop in
the demand for power in the region, we may not have alternative
customers readily available to us. Without alternative sources of
income, our revenues would decrease significantly should a
reduction in demand for hydropower or lack of customers continue
for a prolonged period.

Failure to renew our power purchase agreements could
result in a reduction or complete loss of revenues from the
hydroelectric power projects, which would have a materially
adverse effect on our revenues, results of operations and net
cash used in operating activities.

Jitai Power Investments power purchase agreement with National
Sichuan Xiaojin County Electricity Supply Company Ltd. Expires in
August 2020. This agreement provides for automatic renewal. If we
should be unable to renegotiate a power purchase agreement with
this customer, it is unlikely we would be able to obtain
alternative customers for the power generated by the project.

The operations of our hydroelectric power projects
may be adversely affected by the failure of key equipment, civil
structures or transmission systems, which could result in lost
revenues, increased maintenance costs and our owing damages to
our customers for lost revenues.

The breakdown or failure of key equipment or of a civil structure
in our hydroelectric power projects could disrupt the generation
of electricity and result in revenues being lower than expected.
Further, any breakdown or failure of one or more of our
transmission systems could disrupt transmission of electricity by
a power plant to the power grid. We could experience an equipment
breakdown at our hydroelectric power projects, resulting in
temporary suspensions of electricity generation and distribution.
Repair of such breakdowns may take one or two days or up to a
month, depending on the nature of the problem and availability of
spare parts. In addition, if the problem is related to the grid,
we will not be able to dispatch our power until the grid carries
out the necessary repairs. A portion of the generation facilities
that we have acquired, or may acquire in the future, were, or may
have been, constructed many years ago. Older generating equipment
may require significant capital expenditure to keep it operating
efficiently. Such equipment is also likely to require periodic
upgrading and improvement. Breakdown or failure of one of our
plants also may prevent us from performing under the applicable
power sales agreements which, in certain situations, could result
in termination of the agreements or incurring liability for
liquidated damages. These events may reduce our ability to
generate power, resulting in loss of revenues and increased
maintenance costs.

Our power generating operations may be adversely
affected by operational risks, which may result in uninsured
losses.

Operating hydroelectric power projects involves many risks and
hazards which may be beyond our control and could cause
significant business interruptions, personal injuries and
property or environmental damage, and could increase power
generating costs at affected hydroelectric power projects for an
unknown duration. These risks include but are not limited to:
failure of power transmission systems; unexpected maintenance or
technical problems; human error; failure of our mechanical,
software or monitoring systems; and industrial accidents. The
occurrence of any of these events, and the consequences resulting
from them, may not be covered adequately or at all by our
insurance policies. We do not currently carry any third-party
liability insurance, business interruption insurance or insurance
covering environmental damage arising from accidents on our
property or relating to our operations. Losses incurred or
payments we may be required to make may have a material adverse
effect on our results of operations and financial condition.

On-grid tariffs are set based on regulatory guidance,
actual supply of electricity to a power grid and regional demand
for electricity, and changes in these factors may materially and
adversely affect our results of operations.

All our electricity sales are to power grids and such sales are
subject to on-grid tariffs. Since April 2001, the Chinese
government has gradually implemented an on-grid tariff setting
mechanism based on the actual costs of power projects as well as
the average costs of comparable power projects that were
constructed during the same period within the same provincial
power grid.

This on-grid tariff setting mechanism was intended to replace the
old mechanism for setting on-grid tariffs for planned output.
Based on our experience, the determination of such average costs
usually takes into consideration such factors as:

		construction costs, which vary according to the installed capacity of the individual power projects;
	operating and administrative expenses;
	maintenance and repair costs of power projects; and
	interest expense on outstanding debts.

In addition, the price for electric power sold to end consumers
is fixed in China because the sales price of electricity is
uniformly formulated by the National Development and Reform
Commission. Thus, we must estimate the price at which the
National Development and Reform Commission will allow power grids
to sell electricity and set our prices so that, from the power
grids perspective, their cost for our electricity is acceptable
when considered with the costs of other power producers on the
grid. Thus, although our on-grid tariffs are lower than those for
thermal power projects, the tariff levels we obtain from local
grids may still be impacted by changes in the cost of generating
thermal power and actual regional demand for power. In addition,
if demand for electricity rises beyond expectations, then we
cannot raise our prices accordingly to benefit from the increased
demand. If actual sales prices are significantly below our
estimates for such sales prices, then our financial condition and
results of operations may be materially and adversely affected.

If less than all of the electricity we generate is
dispatched by the grids, our future revenues will be
reduced.

Our profitability depends, in part, upon each of our
hydroelectric power projects generating electricity at a level
sufficient to meet or exceed the planned generation agreed with
our local dispatch company, which in turn will be subject to
local demand for electric power and dispatching to the grids by
the dispatch centers of the local grid companies.

The dispatch of electric power generated by a power project is
controlled by the dispatch centers of the applicable grid
companies to a dispatch agreement with us and to governmental
dispatch regulations. No assurance can be given that the dispatch
centers will dispatch the full amount of the planned generation
of our power projects. A reduction by the dispatch centers in the
amount of electric power dispatched relative to our hydroelectric
power projects planned generation could have a material adverse
effect on our power generation and thus reduce our revenues. To
date, however, other than external factors described elsewhere,
such as limitations on transmission capacity in several
instances, the only situation we have experienced when the
dispatch centers accept less than the full amount of the power
capable of being generated by our power projects is during brief
periods of particularly heavy precipitation when our projects and
others generate more power than the grids can physically accept
and transmit. This occurs notwithstanding regulatory requirements
that grids accept all power generated by renewable energy
sources.

Compliance with environmental regulations can be
costly, and we may become subject to further environmental
compliance requirements in connection with our operations, which
could materially and adversely affect our results of operations
and financial condition.

We are required to comply with PRC national and local regulations
regarding environmental protection for the construction and
operation of our hydroelectric power projects. To the extent that
our existing hydroelectric power projects may have been in
compliance with PRC environmental protection laws and regulations
at the time they were constructed, we cannot assure you that the
PRC government will not require retroactive application of
current laws and regulations to such old plants. Compliance with
environmental regulations can be very expensive, and
non-compliance with these regulations may result in adverse
publicity, potentially significant monetary damages and fines and
suspension of our business operations. In addition, if more
stringent regulations are adopted in the future, the costs of
compliance with these new regulations could be substantial. If we
fail to comply with any future environmental regulations, we may
be required to pay substantial fines, suspend production or even
cease operations. We do not carry any insurance for damages
resulting from failure to comply with environmental regulations.

Our business and business prospects rely in part on
policy support from the PRC government, and our financial
condition and results of operations may be materially and
adversely affected if we lose such support.

National, provincial and local governments in China support the
expansion of hydroelectric power, which eases the approval
process for facility acquisition, construction and financing.
Expansion of both large and small-scale hydroelectric power
production is one of the priorities for the development of the
nations power supply, and foreign investment in the sector is
encouraged. We currently enjoy several types of government
support, including policy support for local grids to purchase all
the power we generate and potentially lower levels of VAT levied
on small hydropower production. If for any reason, such as
development of new energy production technologies or migration to
other renewable energy sources, China removes such policy
support, our financial condition and results of operations may be
materially and adversely affected.

Competition in the PRC power industry may increase,
and our results of operations and growth prospects may be
materially and adversely affected if we are unable to compete
effectively.

Our business depends on the competitiveness of
hydroelectric power generation in relation to other forms of
electric power generation. Fewer hydroelectric power projects may
be built and less electricity from hydroelectric power sources
may be sold if fossil fuel prices remain suppressed or if other
renewable energy sources become less expensive than hydroelectric
power, either of which could have a material adverse effect on
our results of operations, financial condition and growth
prospects.

The demand for power projects that produce electricity from
renewable energy sources such as water depends in part on the
cost of generation from other sources of energy. The terms under
which supplies of petroleum, coal, natural gas and other fossil
fuels, as well as uranium, can be obtained are key factors in
determining the economic interest of using these energy sources
rather than renewable energy sources. The principal energy
sources in competition with renewable energy sources are
petroleum, coal, natural gas and nuclear energy. A decline in the
competitiveness of electricity from renewable energy sources in
terms of cost of generation, technological progress in the
exploitation of other energy sources, discovery of large new
deposits of oil, gas or coal, or a decline in prices of those
fuels, could weaken demand for electricity generated from
renewable energy sources.

In the renewable energy sector, competition primarily exists with
regard to factors such as bidding for available sites,
performance of sites in generation, quality of technologies used,
price of power produced and scope and quality of services
provided, including operation and maintenance services. A decline
in the competitiveness of electricity generated from
hydroelectric sources in terms of such factors could weaken
demand for hydroelectric power. Should hydroelectric power
production become uncompetitive with other forms of renewable
energy production, or if fossil fuel production continues to
become more cost competitive, the construction of hydroelectric
power projects may slow, thus reducing our pool of potential
acquisition targets and limiting our ability to grow our
operations.

Planning, construction, acquisition and operation of
our hydroelectric power projects require us to obtain and
maintain a significant number of permits and approvals from PRC
government agencies. Failure to obtain and maintain these permits
and approvals could result in significant fines and our loss of
the right to develop or operate those assets, which would
materially and adversely affect our future growth plans and
results of operations.

The planning, construction, acquisition and operation of small
hydroelectric power projects in China requires permits and
approvals to be obtained and maintained under different
regulatory schemes administered by a wide range of PRC government
agencies. We believe we have the appropriate permits and
approvals required to develop and operate our hydroelectric power
projects. In the event, however, it is determined that we failed
to obtain all required permits and approvals, we may in certain
cases, be subject to significant fines or the government
authorities requiring us to cease operation of our hydroelectric
power projects, or unwind the acquisition of the project, any of
which would materially and adversely affect our future growth
plans and results of operations. Failure to obtain permits and
approvals for our development projects may result in our
inability to complete and operate the project, or our being
subject to penalties and fines upon completion of the project,
either of which could materially and adversely affect our future
growth and results of operations.

Our operations in China are extensively regulated by
the PRC government and our costs associated with compliance with
such regulations are substantial. Our results of operations and
future growth prospects may be materially and adversely affected
by future changes in government regulations and
policies.

All of our hydroelectric power projects in China are subject to
extensive regulation by the PRC governmental authorities,
including central governmental authorities such as the Ministry
of Commerce, the State Administration for Industry and Commerce,
the National Development and Reform Commission, the State
Electricity Regulatory Commission, the State Administration of
Taxation, the Ministry of Environmental Protection, the Ministry
of Communications and Transportation, the Ministry of Water
Resources, the Ministry of Land and Resources and the Ministry of
Housing and Urban-Rural Development, as well as their provincial
and local counterparts. Government regulations address virtually
all aspects of our operations, including, among others, the
following:

		planning and construction of new power projects;
	the granting of power generation, dispatch and supply permits;
	the amount and timing of power generation;

		the setting of on-grid tariffs paid to power producers and power tariffs paid by consumers of electricity;
	power grid control and power dispatch, including the setting of preferential policies for the dispatch of renewable energy generated power;
	allocation of water resources and control of water flows;
	environmental protection and safety standards;
	acquisitions by foreign investors; and
	taxes, in particular Enterprise Income Tax and Value Added Tax.

Our costs of compliance with, and reliance on, this regulatory
system are significant to our business. An increase in the cost
of compliance could increase our operating costs and expenses and
materially and adversely affect our results of operations.
Moreover, policy movements against renewable energy power
producers could limit our opportunities for growth and materially
and adversely affect our revenues.

The transfer of state-owned assets in China is
subject to approval by authorities in charge of state-owned
assets administration and supervision and involves a public
bidding process. Any failure by us or prior owners of our
projects to comply with PRC laws and regulations in respect of
the transfer of state-owned assets may result in the imposition
of fines or forfeiture of our projects.

We currently have a portfolio of two operating hydroelectric
power projects and two hydroelectric power projects scheduled to
begin operation by 2019. Some of our projects were previously
state-owned assets. Under PRC law, the transfer of state-owned
assets is subject to strict procedures and approvals. We are in
the process of complying with all requisite procedures in
acquiring state-owned assets. However, if a previous transferor
of state-owned assets failed to comply with relevant PRC law, the
transfer of the state-owned assets may be reversed by the
government or fines may be levied. In such circumstances, we will
have a legal right to recover our investment in the assets, but
we may not be able to recover from the relevant parties, which
could result in a loss of power generation plants, loss of
revenues and a significant increase in operating costs.

Hotel Business

We are subject to the business, financial and
operating risks common to the hotel business which could reduce
our revenues and limit opportunities for growth.

Business, financial and operating risks common to the hotel
business include:

		significant competition from hospitality providers in the region and from regions within the PRC which offer similar travel experiences and attractions, particularly related to the natural beauty of the landscape which surrounds our planned hotel properties;
	the costs and administrative burdens associated with complying with applicable laws and regulations in the PRC;
	delays in construction or delays and cancellations of planned or future development or refurbishment projects;
	changes in desirability of geographic regions for travel within the PRC and shortages of desirable locations for future development;
	decreased corporate or governmental travel-related budgets and spending, as well as cancellations, deferrals or renegotiations of group business such as industry conventions;
	negative public perception of corporate travel-related activities;
	statements, actions, or interventions by governmental officials related to travel, meetings or other aspects of hotel business and operations;
	the increasing influence and reliance on technology for distribution channels and the impact of internet intermediaries and other new industry entrants on supply, pricing and the value of our brands;
	health, safety and environmental laws, rules and regulations and other governmental and regulatory action;
	changes in operating costs including, but not limited to, energy, water, labor costs (including the impact of labor shortages and unionization), food costs, workers compensation and health-care related costs, insurance and unanticipated costs such as acts of nature and their consequences;
	the availability and cost of capital to allow us to fund new hotel construction and existing hotel renovations; and
	cyclical over-building in the hotel business and residential and vacation ownership business.

Our revenues, profits, or market share could be
harmed if we are unable to compete effectively.

The hotel and hospitality industries are highly competitive. Our
properties will compete for customers with other hotel and resort
properties, ranging from national and international hotel brands
to independent, local and regional hotel operators. We also
compete with other vacation options such as cruises, as well as
alternative lodging arrangements in which residential properties
in locations throughout the world are marketed, reserved and
rented in a manner consistent with hotels. Furthermore, new or
existing competition that uses a business model that is different
from our business model may challenge our ability to remain
competitive. We will compete based on a number of factors,
including quality and consistency of rooms, restaurant and
meeting facilities and services and attractiveness of location.
Some of our competitors may have substantially greater marketing
and financial resources than we will have, and if we are unable
to successfully compete in these areas, our operating results
could be adversely affected.

Moreover, we may enter into and maintain management agreements
and leases with property owners. We may compete with other hotel
companies for this business primarily on the basis of fees,
contract terms, brand recognition, and reputation. In connection
with entering into these agreements, we may be required to make
investments in, or guarantee the obligations of, third parties or
guarantee minimum income to third parties. The terms of our
management agreements and leases for each of our hotels will be
influenced by contract terms offered by our competitors, among
other things. We cannot assure you that we will be able to enter
into future collaborations, enter into new agreements or renew
agreements in the future on terms that are favorable to us.

Degradation in the quality or reputation of our brand
could adversely affect our financial results
andgrowth.

For our properties to be attractive and competitive, we will have
to spend money periodically to keep the properties well
maintained, modernized and refurbished. This will create an
ongoing need forcash. To the extent that we cannot fund
expenditures from cash generated by operations, funds will be
borrowed or otherwise obtained. Failure to make the investments
necessary to maintain or improve such properties, act in
accordance with applicable brand standards or project a
consistent brand imagecould adversely affect the quality and
reputation of our brands. If the reputation or perceived quality
of our brands declines, our market share, reputation, business,
financial condition or results of operations could be affected.

External perception of our hotels could harm our
brands and reputation as well as reduce our revenues and lower
our profits.

Our brands and our reputation will become one of our important
assets. Our ability to attract development partners and to
attract and retain guests will depend, in part, upon the external
perceptions of our brand, the quality of our hotels and services
and our corporate and management integrity. There is a risk to
our brand and our reputation if we fail to act responsibly or
comply with regulatory requirements in a number of areas, such as
safety and security, sustainability, responsible tourism,
environmental management, human rights and support for local
communities. The considerable increase in the use of social media
over recent years has greatly expanded the potential scope and
scale, and increased the rapidity of the dissemination of the
negative publicity that could be generated by any such adverse
incident or failure. An adverse incident involving our associates
or our guests, or in respect of our third-party vendors or owners
and the industry, and any media coverage resulting therefrom, may
harm our brand and reputation, cause a loss of consumer
confidence in us or the industry, and negatively impact our
results or operations.

Third-party and internet-based reservation or booking
channels may negatively impact our revenues.

We expect significant booking to be performed through third-party
internet travel intermediaries such as eLong, Ctrip and Qunar;
international third-party internet travel intermediaries such as
Expedia, Orbitz and Booking.com; groupbuy companies which provide
hotel booking, such as Meituan; Alitrip, which is a business unit
of Alibaba Group Holding Limited; travel companies such as Tuniu
Corporation and Tongcheng Network Technology Share Co., Ltd.; and
lesser-known online travel service providers. In addition,
travelers can book stays on websites that facilitate the
short-term rental of homes and apartments from owners, thereby
providing an alternative to hotel rooms. As the percentage of
internet bookings increases, these intermediaries may be able to
obtain more volume or better rates. Some internet reservation
intermediaries are attempting to commoditize hotel rooms by
increasing the importance of price and general indicators of
quality (such as three-star downtown hotel) at the expense of
brand identification, which we expect to be among our most
important assets. Moreover, third-party reservation channels may
be able to obtain higher commissions, reduced room rates or other
significant contract concessions from us. Over time, consumers
may develop loyalties to third-party internet reservations
systems rather than to our online booking tools or our brands.
Although we expect to derive significant revenues from
traditional channels and our websites, our business and
profitability could be adversely affected if customer loyalties
significantly shift from our brands to their travel services,
diverting bookings away from our websites, or through their fees
increasing the overall cost of internet bookings for our hotels.

A failure to keep pace with developments in
technology could impair our operations or competitive
position.

The hospitality industry continues to demand the use of
sophisticated technology and systems including technology
utilized for property management, brand assurance and compliance,
procurement, reservation systems, distribution, revenue
management and guest amenities. These technologies can be
expected to require refinements, including complying with legal
requirements in connection with privacy and/or security
regulations, requirements, and commitments established by third
parties such as the payment card industry, and there is therisk
that advanced new technologies will be introduced. Further, the
development and maintenance of these technologies may require
significant capital. There can be no assurance that as various
systems and technologies become outdated or new technology
isrequired, we will be able to replace or introduce them as
quickly as our competition or within budgeted costs and
timeframes. Further, there can be no assurance that we will
achieve the benefits that may have been anticipated from any new
technology or system.

A slow-down of economic growth in China may adversely
affect our growth and financial performance.

Our financial results have been and will likely continue to be
significantly affected by the condition of the economy and the
travel industry in China. Travel expenditures are sensitive to
business and personal discretionary spending levels and tend to
decline during economic downturns. In recent years, the PRC
economy has seen a slowdown related to the international
financial crisis in 2008, and slower growth in 2014 and 2015. In
2016, economic conditions remain uncertain and unpredictable,
with a lowering of the governments economic growth target, and
some forecasters predicting a significant slowdown. In addition,
China is affected by global economic conditions, which have been
volatile in recent years. The global financial markets have
experienced significant disruptions since 2008, and currently
face slow growth in Japan, a European debt crisis and a multitude
of other uncertainties, including the long-term effects of
expansionary monetary and fiscal policy. There have also been
concerns over regional tensions, including those between, China
and Japan, between Russia and Ukraine, protests in Hong Kong and
Irans and North Koreas nuclear programs, as well as concerns
relating to other countries, including those in the Middle East
and Africa, which have resulted in volatility in oil and other
markets. We believe that demand for travel services in China will
continue to be linked to the condition of the broader PRC economy
in the future. A slow-down of economic growth in China is likely
to reduce expenditures for travel, which would have a material
adverse effect on our revenues and results of operations.

Declines or disruptions in the travel industry may
reduce our revenues.

Our business is affected by the condition of the overall travel
industry in China. Trends or events that may reduce travel and
therefore may reduce our revenues include:

		outbreaks, or the fear of outbreaks, of bird flu, Zika or other diseases;
	travel-related accidents;
	unseasonable or extreme weather;
	natural or man-made disasters;
	increased prices or fees in the accommodation, airline or other travel-related sectors; and
	political events, social unrest, ethnic or religious conflict, or instability in travel origin or destination markets.

As a result of any of these events, over which we have no
control, our results of operations and financial condition could
be materially and adversely affected.

We may incur losses for breaches of security on our
websites, failure to protect confidential data or fraudulent
transactions.

We anticipate relying substantially on online booking and credit
card processing systems. The internet industry in China faces
significant challenges in the areas of information security and
privacy, including the storage, transmission and sharing of
confidential information. Our transactions are likely to be
conducted through computers, mobile phones, tablet devices and
other systems. In such transactions, the maintenance, storage and
secure transmission of confidential information (such as
itineraries, accommodation and other reservation information,
personal information and payment information) is essential to
maintain consumer confidence. Due to rapidly advancing technology
and the growing variety, sophistication and complexity of
information security threats, our current security measures may
not be adequate to prevent future data or privacy breaches and
other types of system attacks. In addition, PRC legal
requirements, consumer and supplier expectations relating to the
collection, use and protection of consumer information have
increased in recent years. Security breaches or improper
collection, storage or use of information on our or our other
third-party systems could expose us to significant financial
losses, adverse publicity, government action or litigation, which
could harm our reputation and lessen our ability to attract and
retain customers. Reputational or financial harm could also be
caused by security or information breaches of our partners,
including banks and travel suppliers, related to transactions by
our customers.

We expect our customers will generally pay using credit cards,
debit cards or online methods. There have been and will likely
continue to be attempts to use fraudulently obtained credit
cards, fraudulent or stolen forms of online payment or fraudulent
or stolen account information to pay for our products and
services, to hack or otherwise compromise the security and
confidentiality of our virtual cash, eCoupon and other systems
and accounts, and to use other fraudulent or false schemes to
steal from us. Frauds may be attempted by our employees, partners
or other third parties acting individually or in concert with one
another. New schemes and methods are likely to emerge in response
to our increasing number and variety of marketing efforts and
promotions, growing number of travel suppliers located throughout
China, greater variety of products and services, and changes in
our systems and processes. As fraudulent schemes, including but
not limited to payment and transaction schemes and attacks on
computer systems evolve and become more sophisticated, it may
become increasingly difficult and costly for us to detect,
minimize and prevent such fraud. Any fraud, theft or other
compromise of the security of our systems or confidential data
could cause us to incur significant and unforeseen financial and
reputational losses.

Our business depends on the technology infrastructure
of Chinas internet and technology services provided by third
parties.

Access to the internet in China is maintained through a network
owned by state-owned Chinese telecommunications carriers under
the regulatory supervision of Chinas Ministry of Industry and
Information Technology (the MIIT) and government security
agencies. Networks in China connect to the internet through a
government-controlled gateway, which is the only channel through
which domestic Chinese users connect to the international
internet network. We will rely on this infrastructure and the
state-owned telecommunications companies to provide bandwidth and
data capacity. We would have no access to alternative networks
and services, on a timely basis, if at all, in the event of any
infrastructure interruption, suspension or failure.

We will also rely on third-party computer systems, software and
service providers, including the computerized reservation systems
of accommodations and third party service providers such as eLong
and Ctrip. Third parties provide, for example, computer storage
systems and software licensing, support and maintenance services.
In addition, third parties provide internet data centers which
will hold many of our servers and other technology systems. These
third-party data centers may be subject to system downtime,
hacker attack, fraudulent access, natural disaster, human error
or other causes leading to unexpected business interruptions. Any
interruption in these or other third-party services or
deterioration in their performance could impair the quality of
our service. Furthermore, if our arrangements with any of these
third parties are suspended, terminated, or no longer available
on commercially acceptable terms, we may not be able to find an
alternate source of support on a timely basis and on satisfactory
terms.

Our results may fluctuate due to seasonality in the
travel industry in China.

The travel service industry in China is characterized by seasonal
fluctuations, and accordingly our revenues vary from quarter to
quarter. Historically, the first quarter of each year generally
results in lower revenues for the travel and hospitality sector
due to reduced business and leisure travel during the Chinese New
Year holiday. The seasonality of the PRC travel market is
affected by government regulation of public holidays, including
for example, the decision by the State Council in 2008 to
restructure the annual calendar of public holidays by adding a
few shorter holidays and reducing the May1st holiday from one
week to three days. Our future results may continue to be
affected by seasonality and regulatory adjustments to public
holidays in China.

Risks related to doing business in China

PRC economic, political and social conditions, as
well as changes in any government policies, laws and regulations,
could adversely affect the overall economy in China or the energy
and hospitality markets, which could harm our
business.

Substantially all of our operations are conducted in China, and
all of our net revenues are derived from China. Accordingly, our
business, financial condition, results of operations, prospects
and certain transactions we may undertake are subject, to a
significant extent, to economic, political and legal developments
in China.

The PRC economy differs from the economies of most developed
countries in many respects, including the amount of government
involvement, level of development, growth rate, control of
foreign exchange and allocation of resources. While the PRC
economy has experienced significant growth in the past two to
three decades, growth has been uneven, both geographically and
among various sectors of the economy. Demand for our services and
products depends, in large part, on economic conditions in China.
Any slowdown in Chinas economic growth may cause a slowdown in
energy consumption and decrease in hospitality demand, which in
turn could reduce our net revenues.

Although the PRC economy has been transitioning from a planned
economy to a more market-oriented economy since the late 1970s,
the PRC government continues to play a significant role in
regulating industry development by imposing industrial policies.
The PRC government also exercises significant control over Chinas
economic growth through allocating resources, controlling the
incurrence and payment of foreign currency-denominated
obligations, setting monetary policy and providing preferential
treatment to particular industries or companies. Changes in any
of these policies, laws and regulations could adversely affect
the economy in China or the real estate development market, which
could harm our business.

The PRC government has implemented various measures to encourage
foreign investment and sustainable economic growth and to guide
the allocation of financial and other resources, which have for
the most part had a positive effect on our business and growth.
However, we cannot assure you that the PRC government will not
repeal or alter these measures or introduce new measures that
will have a negative effect on us. Chinas social and political
conditions may also not be as stable as those of the United
States ( US) and other developed countries. Any sudden changes to
Chinas political system or the occurrence of widespread social
unrest could have a material adverse effect on our business and
results of operations.

Uncertainties with respect to the PRC legal system
could harm us.

Our operations in China are governed by PRC laws and regulations.
The PRC legal system is a civil law system based on written
statutes. Unlike common law systems, prior court decisions have
limited precedential value. The WFOEs are generally subject to
laws and regulations applicable to foreign investments in China
and, in particular, laws applicable to wholly foreign-owned
enterprises.

Since 1979, PRC legislation and regulations have significantly
enhanced the protections afforded to various forms of foreign
investments in China. However, China has not developed a fully
integrated legal system and recently-enacted laws and regulations
may not sufficiently cover all aspects of economic activities in
China. In particular, because these laws and regulations are
relatively new, and because of the limited volume of published
decisions and their nonbinding nature, the interpretation and
enforcement of these laws and regulations involve uncertainties.
In addition, the PRC legal system is based in part on government
policies and internal rules (some of which are not published on a
timely basis or at all) that may have a retroactive effect. As a
result, we may not be aware of our violation of these policies
and rules until some-time after the violation has occurred.
Moreover, some regulatory requirements issued by certain PRC
government authorities may not be consistently applied by other
government authorities, including local government authorities,
thus making strict compliance with all regulatory requirements
impractical, or in some circumstances, impossible. In addition,
any litigation in China may be protracted and result in
substantial costs and diversion of resources and management
attention.

Any loans to our operating companies in the PRC, which are
treated as foreign-invested enterprises under PRC laws, are
subject to PRC regulations and foreign exchange loan
registrations. For example, loans by us to our operating
companies in the PRC to finance their activities cannot exceed
statutory limits and must be registered with the local
counterpart of the State Administration of Foreign Exchange, or
SAFE. The statutory limit for the total amount of foreign debts
of a foreign-invested company is the difference between the
amount of total investment as approved by the PRC Ministry of
Commerce(MOC) or its local counterpart and the amount of
registered capital of such foreign-invested company.

We may also decide to finance our operating businesses in the PRC
by means of capital contributions. These capital contributions
must be approved by the MOC or its local counterpart. On March
30, 2015, SAFE promulgated Circular 19, which expands a pilot
reform of the administration of the settlement of the foreign
exchange capitals of foreign-invested enterprises nationwide.
Circular 19 came into force and replaced both previous Circular
142 and Circular 36 on June 1, 2015. Circular 19 allows all
foreign-invested enterprises established in the PRC to use their
foreign exchange capital to make equity investment and removes
certain other restrictions provided in Circular 142. However,
Circular 19 continues to prohibit foreign-invested enterprises
from, among other things, using RMB funds converted from its
foreign exchange capital for expenditure beyond its business
scope, providing entrusted loans or repaying loans between
non-financial enterprises. In addition, SAFE strengthened its
oversight of the flow and use of the RMBcapital converted from
foreign currency registered capital of a foreign-invested
company. The use of such RMB capital may not be altered without
SAFEs approval, and such RMB capital may not in any case be used
to repay RMB loans if the proceeds of such loans have not been
used. Violations of Circular 19 could result in severe monetary
or other penalties. These circulars may significantly limit our
ability to use RMB converted from the cash provided by our
offshore financing activities to fund the establishment of new
entities in China by our WFOEs and operating companies in the
PRC, to invest in or acquire any other PRC companies through our
WFOEs, or to establish new variable interest entities in the PRC.

In light of the various requirements imposed by PRC regulations
on loans to and direct investment in PRC entities by offshore
holding companies, we cannot assure you that we will be able to
complete the necessary government registrations or obtain the
necessary government approvals on a timely basis, if at all, with
respect to future loans to our operating companies in the PRC or
future capital contributions by us to our operating companies in
the PRC. If we fail to complete such registrations or obtain such
approvals, our ability to use the proceeds we expect to receive
from our public offerings and our private placements and to
capitalize or otherwise fund our PRC operations may be negatively
affected, which could materially and adversely affect our
liquidity and our ability to fund and expand our business.

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

Because all of our revenue will be denominated in RMB,
restrictions on currency exchange may limit our ability to use
revenue generated in RMB to fund any business activities we may
have outside China or to make dividend payments to our
shareholders in U.S. dollars. The principal regulation governing
foreign currency exchange in China is the Foreign Currency
Administration Rules (1996), as amended. Under these rules, RMB
is freely convertible for trade and service-related foreign
exchange transactions, but not for direct investment, loan or
investment in securities outside China unless the prior approval
of SAFE is obtained. Although the PRC government regulations now
allow greater convertibility of RMB for current account
transactions, significant restrictions still remain. For example,
foreign exchange transactions under our subsidiaries capital
accounts, including principal payments in respect of foreign
currency-denominated obligations, remain subject to significant
foreign exchange controls. These limitations could affect our
ability to obtain foreign exchange for capital expenditures. We
cannot be certain that the PRC regulatory authorities will not
impose more stringent restrictions on the convertibility of RMB,
especially with respect to foreign exchange transactions.

Fluctuations in the value of the RMB may have a
material adverse effect on your investment.

Substantially all of our revenues and expenditures are
denominated in RMB, whereas our reporting currency is the U.S.
dollar. As a result, fluctuations in the exchange rate between
the U.S. dollar and RMB will affect the relative purchasing power
in RMB terms of our U.S. dollar assets and the proceeds from any
public offering or private placement. Our reporting currency is
the U.S. dollar while the functional currency for our operating
companies in the PRC are RMB. Gains and losses from the
remeasurement of assets and liabilities that are receivable or
payable in RMB are included in our consolidated statements of
operations. The remeasurement has caused the U.S. dollar value of
our results of operations to vary with exchange rate
fluctuations, and the U.S. dollar value of our results of
operations will continue to vary with exchange rate fluctuations.
A fluctuation in the value of RMB relative to the U.S. dollar
could reduce our profits from operations and the translated value
of our net assets when reported in U.S. dollars in our financial
statements. This could have a negative impact on our business,
financial condition or results of operations as reported in U.S.
dollars. If we decide to convert our RMB into U.S. dollars for
the purpose of making payments for dividends on our ordinary
shares or for other business purposes, appreciation of the U.S.
dollar against the RMB would have a negative effect on the U.S.
dollar amount available to us. In addition, fluctuations in
currencies relative to the periods in which the earnings are
generated may make it more difficult to perform period-to-period
comparisons of our reported results of operations.

The change in value of the RMB against the U.S. dollar and other
currencies is affected by, among other things, changes in Chinas
political and economic conditions. On July 21, 2005, the PRC
government changed its decade-old policy of pegging the value of
the RMB to the U.S. dollar. Under the current policy, the RMB is
permitted to fluctuate within a narrow and managed band against a
basket of certain foreign currencies. The PRC has decided to
proceed further with reform of the RMB exchange regime and to
enhance the RMB exchange rate flexibility. The Peoples Bank of
China regularly intervenes in the foreign exchange market to
limit fluctuations in RMBexchange rates and achieve policy goals.
During the period between July 2008 and June 2010, the exchange
rate between the RMB and the U.S. dollar had been stable and
traded within a narrow range. Since June 2010, the RMB has
fluctuated against the U.S. dollar, at times significantly and
unpredictably. It is difficult to predict how long such
depreciation of RMB against the U.S. dollar may last and when and
how the relationship between the RMB and the U.S. dollar may
change again.

There remains significant international pressure on the PRC
government to adopt a flexible currency policy. Any significant
appreciation or depreciation of the RMB may materially and
adversely affect our revenues, earnings and financial position,
and the value of, and any dividends payable on, our common stock
in U.S. dollars. For example, to the extent that we need to
convert U.S. dollars we receive from our public offerings or
private placements into RMB to pay our operating expenses,
appreciation of the RMB against the U.S. dollar would have an
adverse effect on the RMB amount we would receive from the
conversion. Conversely, a significant depreciation of the RMB
against the U.S. dollar may significantly reduce the U.S. dollar
equivalent of our earnings, which in turn could adversely affect
the price of our common stock.

Very limited hedging options are available in China to reduce our
exposure to exchange rate fluctuations. To date, we have not
entered into any hedging transactions in an effort to reduce our
exposure to foreign currency exchange risk. While we may decide
to enter into hedging transactions in the future, the
availability and effectiveness of these hedges may be limited and
we may not be able to adequately hedge our exposure or at all. In
addition, our currency exchange losses may be magnified by PRC
exchange control regulations that restrict our ability to convert
RMB into foreign currency. As a result, fluctuations in exchange
rates may have a material adverse effect on the price of our
common stock.

Any failure to comply with PRC regulations regarding
the registration requirements for employee stock incentive plans
may subject us or any future participants in any PRC plans that
we may create to fines and other legal or administrative
sanctions.

In February 2012, SAFE promulgated the Notices on Issues
Concerning the Foreign Exchange Administration for Domestic
Individuals Participating in Stock Incentive Plan of Overseas
Publicly-Listed Company, replacing earlier rules promulgated in
March 2007. to these rules, PRC citizens and non-PRC citizens who
reside in China for a continuous period of not less than one year
who participate in any stock incentive plan of an overseas
publicly listed company, subject to a few exceptions, are
required to register with SAFE through a domestic qualified
agent, which could be the PRC subsidiary of such overseas listed
company, and complete certain other procedures. In addition, an
overseas entrusted institution must be retained to handle matters
in connection with the exercise or sale of stock options and the
purchase or sale of shares and interests. We do not currently
have an established stock option plan or other employee ownership
plan. However, in the event that we establish a stock option plan
or other employee ownership plan, we and our executive officers
and other employees who are PRC citizens or who have resided in
the PRC for a continuous period of not less than one year and who
have been granted options or other awards would be subject to
these regulations. Failure to complete the SAFE registrations may
subject them to fines and legal sanctions and may also limit our
ability to contribute additional capital into our operating
companies in the PRC and limit the ability of our operating
companies in the PRC to distribute dividends to us. We also face
regulatory uncertainties that could restrict our ability to adopt
additional incentive plans for our directors, executive officers
and employees under PRC law.

PRC regulations relating to offshore investment
activities by PRC residents may limit the ability of our
operating companies in the PRC to increase their registered
capital or distribute profits to us or otherwise expose us or the
registered beneficial owners of our operating companies in the
PRC to liability and penalties under PRC law.

SAFE promulgated the Circular on Relevant Issues Relating to
Domestic Residents Investment and Financing and Roundtrip
Investment through Special Purpose Vehicles, or SAFE Circular 37,
in July 2014 that requires PRC residents or entities to register
with SAFE or its local branch in connection with the
establishment or control of an offshore entity established for
the purpose of overseas investment or financing. In addition,
such PRC residents or entities must update their SAFE
registrations when the offshore special purpose vehicle undergoes
material events relating to any change of basic information
(including change of such PRC citizens or residents, name and
operation term), increases or decreases in investment amount,
transfers or exchanges of shares, or mergers or divisions. SAFE
Circular 37 is issued to replace the Notice on Relevant Issues
Concerning Foreign Exchange Administration for PRC Residents
Engaging in Financing and Roundtrip Investments via Overseas
Special Purpose Vehicles, or SAFE Circular 75. SAFE promulgated
the Notice on Further Simplifying and Improving the
Administration of the Foreign Exchange Concerning Direct
Investment in February 2015, which took effect on June 1, 2015.
This notice has amended SAFE Circular 37 requiring PRC residents
or entities to register with qualified banks rather than SAFE or
its local branch in connection with their establishment or
control of an offshore entity established for the purpose of
overseas investment or financing.

If our current or future shareholders who are PRC residents or
entities do not complete their registration as required, our
operating companies in the PRC may be prohibited from
distributing their profits and proceeds from any reduction in
capital, share transfer or liquidation to us, and we may be
restricted in our ability to contribute additional capital to our
operating companies in the PRC. Moreover, failure to comply with
the SAFE registration described above could result in liability
under PRC laws for evasion of applicable foreign exchange
restrictions.

We may not be informed of the identities of all the PRC residents
or entities holding direct or indirect interest in our company,
nor can we compel our beneficial owners to comply with SAFE
registration requirements. As a result, we cannot assure you that
all of our shareholders or beneficial owners who are PRC
residents or entities have complied with, and will in the future
make or obtain any applicable registrations or approvals required
by, SAFE regulations. Failure by such shareholders or beneficial
owners to comply with SAFE regulations, or failure by us to amend
the foreign exchange registrations of our operating companies in
the PRC, could subject us to fines or legal sanctions, restrict
our overseas or cross-border investment activities, limit the
ability of our operating companies in the PRC to make
distributions or pay dividends to us or affect our ownership
structure, which could adversely affect our business and
prospects.

As it is uncertain how the SAFE regulations will be interpreted
or implemented, we cannot predict how these regulations will
affect our business operations or future strategy. For example,
we may be subject to a more stringent review and approval process
with respect to our foreign exchange activities, such as
remittance of dividends and obtaining foreign currency
denominated borrowings, which may harm our results of operations
and financial condition. In addition, if we decide to acquire a
PRC domestic company, we cannot assure you that we or the owners
of such company, as the case may be, will be able to obtain the
necessary approvals or complete the necessary filings and
registrations required by the SAFE regulations. This may restrict
our ability to implement our acquisition strategy and could
adversely affect our business and prospects.

The MA Rules and certain other PRC regulations
establish complex procedures for some acquisitions of Chinese
companies by foreign investors, which could make it more
difficult for us to pursue growth through acquisitions in
China.

The Regulations on Mergers and Acquisitions of Domestic Companies
by Foreign Investors, or the MA Rules, adopted by six PRC
regulatory agencies in August 2006 and amended in 2009, and some
other regulations and rules concerning mergers and acquisitions
established additional procedures and requirements that could
make merger and acquisition activities by foreign investors more
time consuming and complex, including requirements in some
instances that the MOC be notified in advance of any
change-of-control transaction in which a foreign investor takes
control of a PRC domestic enterprise. Moreover, the Anti-Monopoly
Law requires that the MOC shall be notified in advance of any
concentration of undertaking if certain thresholds are triggered.
In addition, the security review rules issued by the MOC that
became effective in September 2011 specify that mergers and
acquisitions by foreign investors that raise national defense and
security concerns and mergers and acquisitions through which
foreign investors may acquire de facto control over domestic
enterprises that raise national security concerns are subject to
strict review by the MOC, and the rules prohibit any activities
attempting to bypass a security review, including by structuring
the transaction through a proxy or contractual control
arrangement. In the future, we may grow our business by acquiring
complementary businesses. Complying with the requirements of the
above-mentioned regulations and other relevant rules to complete
such transactions could be time consuming, and any required
approval processes, including obtaining approval from the MOC or
its local counterparts may delay or inhibit our ability to
complete such transactions, which could affect our ability to
expand our business or maintain our market share.

Under the PRC Enterprise Income Tax Law, our company
and/or our operating companies in the PRC may be classified as a
resident enterprise of the PRC. Such classification could result
in tax consequences to us, our non-PRC resident shareholders and
our operating companies in the PRC.

Under the PRC Enterprise Income Tax Law and its implementation
rules, an enterprise established outside of the PRC with a de
facto management body within the PRC is considered a resident
enterprise and will be subject to the enterprise income tax on
its global income at the rate of 25%. The implementation rules
define the term de facto management body as the body that
exercises full and substantial control over and overall
management of the business, productions, personnel, accounts and
properties of an enterprise. In April 2009, the State
Administration of Taxation issued a circular, known as Circular
82, which provides certain specific criteria for determining
whether the de facto management body of a PRC-controlled
enterprise that is incorporated offshore is located in China.
Although this circular only applies to offshore enterprises
controlled by PRC enterprises or PRC enterprise groups, not those
controlled by PRC individuals or foreigners like us, the criteria
set forth in the circular may reflect the State Administration of
Taxations general position on how the de facto management body
test should be applied in determining the tax resident status of
all offshore enterprises. 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 enterprises financial and human
resource matters are made or are subject to approval by
organizations or personnel in the PRC; (iii)the enterprises
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.

We believe none of our entities outside of China is a PRC
resident enterprise for PRC tax purposes. However, the tax
resident status of an enterprise is subject to determination by
the PRC tax authorities and uncertainties remain with respect to
the interpretation of the term de facto management body. As
substantially all of our management members are based in China,
it remains unclear how the tax residency rule will apply to our
case. If the PRC tax authorities determine that our company
and/or our non-PRC registered subsidiaries are a resident
enterprise for PRC enterprise income tax purposes, a number of
PRC tax consequences could follow. First, our company and/or our
non-PRC registered subsidiaries could be subject to the
enterprise income tax at a rate of 25 percent on our and/or our
non-PRC registered subsidiaries worldwide taxable income, as well
as PRC enterprise income tax reporting obligations. Second, under
the EIT Law and its implementing rules, dividends paid between
qualified resident enterprises are exempt from enterprise income
tax. As a result, if our company and/or our non-PRC registered
subsidiaries are treated as PRC qualified resident enterprises
all dividends paid from our non-PRC registered subsidiaries to us
(through our operating companies in the PRC) should be exempt
from PRC tax.

Finally, the resident enterprise classification could result in a
situation in which a 10 percent PRC tax is imposed on dividends
we pay to our non-PRC stockholders that are not PRC tax resident
enterprises and gains derived by them from transferring our
common stock, if such income is considered PRC-sourced income by
the relevant PRC authorities. In such event, we may be required
to withhold a 10 percent PRC tax on any dividends paid to non-PRC
resident stockholders. Our non-PRC resident stockholders also may
be responsible for paying PRC tax at a rate of 10 percent on any
gain realized from the sale or transfer of our common stock in
certain circumstances. We would not, however, have an obligation
to withhold PRC tax with respect to such gain.

If any such PRC tax applies, a non-PRC resident investor may be
entitled to a reduced rate of PRC tax under an applicable income
tax treaty and/or a deduction against such investors domestic
taxable income or a foreign tax credit against such investors
domestic income tax liability (subject to applicable conditions
and limitations). In the case of a U.S. holder, if a PRC tax
applies to dividends paid on our common stock, or to gain from
the disposition of our common stock, such tax should be treated
as a foreign tax eligible for a deduction from such holders U.S.
federal taxable income or a foreign tax credit against such
holders U.S. federal income tax liability (subject to applicable
conditions and limitations). In addition, the U.S. holder should
be entitled to certain benefits under the agreement between the
Government of the United States of America and the Government of
the Peoples Republic of China for the Avoidance of Double
Taxation and the Prevention of Tax Evasion with Respect to Taxes
on Income (the U.S.-PRC Tax Treaty), including the treatment of
any such income as arising in the PRC for purposes of calculating
such foreign tax credit, if such holder is considered a resident
of the United States for the purposes of the U.S.-PRC Tax Treaty.
Prospective investors should consult with their own tax advisors
regarding the applicability of any such taxes, the effects of any
applicable income tax treaties, and any available foreign tax
credits.

Enhanced scrutiny over acquisition transactions by
the PRC tax authorities may have a negative impact on potential
acquisitions we may pursue in the future.

The PRC tax authorities have enhanced their scrutiny over the
direct or indirect transfer of certain taxable assets, including,
in particular, equity interests in a PRC resident enterprise, by
a non-resident enterprise by promulgating and implementing SAT
Circular 59 and Circular 698, which became effective in January
2008, and a Circular 7 in replacement of some of the existing
rules in Circular 698, which became effective in February 2015.

Under Circular 698, where a non-resident enterprise conducts an
indirect transfer by transferring the equity interests of a PRC
resident enterprise indirectly by disposing of the equity
interests of an overseas holding company, the non-resident
enterprise, being the transferor, may be subject to PRC
enterprise income tax, if the indirect transfer is considered to
be an abusive use of company structure without reasonable
commercial purposes. As a result, gains derived from such
indirect transfer may be subject to PRC tax at a rate of up to
10%. Circular 698 also provides that, where a non-PRC resident
enterprise transfers its equity interests in a PRC resident
enterprise to its related parties at a price lower than the fair
market value, the relevant tax authority has the power to make a
reasonable adjustment to the taxable income of the transaction.

In February 2015, the SAT issued Circular 7 to replace the rules
relating to indirect transfers in Circular 698. Circular 7 has
introduced a new tax regime that is significantly different from
that under Circular 698. Circular 7 extends its tax jurisdiction
to not only indirect transfers set forth under Circular 698 but
also transactions involving transfer of other taxable assets,
through the offshore transfer of a foreign intermediate holding
company. In addition, Circular 7 provides clearer criteria than
Circular 698 on how to assess reasonable commercial purposes and
has introduced safe harbors for internal group restructurings and
the purchase and sale of equity through a public securities
market. Circular 7 also brings challenges to both the foreign
transferor and transferee (or other person who is obligated to
pay for the transfer) of the taxable assets.Where a non-resident
enterprise conducts an indirect transfer by transferring the
taxable assets indirectly by disposing of the equity interests of
an overseas holding company, the non-resident enterprise being
the transferor, or the transferee, or the PRC entity which
directly owned the taxable assets may report to the relevant tax
authority such indirect transfer. Using a substance over form
principle, the PRC tax authority may disregard the existence of
the overseas holding company if it lacks a reasonable commercial
purpose and was established for the purpose of reducing, avoiding
or deferring PRC tax. As a result, gains derived from such
indirect transfer may be subject to PRC enterprise income tax,
and the transferee or other person who is obligated to pay for
the transfer is obligated to withhold the applicable taxes,
currently at a rate of 10% for the transfer of equity interests
in a PRC resident enterprise.

We face uncertainties on the reporting and consequences on future
private equity financing transactions, share exchange or other
transactions involving the transfer of shares in our company by
investors that are non-PRC resident enterprises. The PRC tax
authorities may pursue such non-resident enterprises with respect
to a filing or the transferees with respect to withholding
obligation, and request our PRC subsidiaries to assist in the
filing. As a result, we and non-resident enterprises in such
transactions may become at risk of being subject to filing
obligations or being taxed, under Circular 59 or Circular 698 and
Circular 7, and may be required to expend valuable resources to
comply with Circular 59, Circular 698 and Circular 7 or to
establish that we and our non-resident enterprises should not be
taxed under these circulars, which may have a material adverse
effect on our financial condition and results of operations.

The PRC tax authorities have the discretion under SAT Circular
59, Circular 698 and Circular 7 to make adjustments to the
taxable capital gains based on the difference between the fair
value of the taxable assets transferred and the cost of
investment. Although we currently have no plans to pursue any
acquisitions in China or elsewhere in the world, we may pursue
acquisitions in the future that may involve complex corporate
structures. If we are considered a non-resident enterprise under
the PRC Enterprise Income Tax Law and if the PRC tax authorities
make adjustments to the taxable income of the transactions under
SAT Circular 59 or Circular 698 and Circular 7, our income tax
costs associated with such potential acquisitions will be
increased, which may have an adverse effect on our financial
condition and results of operations.

We face risks related to natural disasters, health
epidemics and other outbreaks, which could significantly disrupt
our operations.

We are vulnerable to natural disasters and other calamities.
Fire, floods, typhoons, earthquakes, power loss,
telecommunications failures, break-ins, war, riots, terrorist
attacks or similar events may give rise to server interruptions,
breakdowns, system failures, technology platform failures or
internet failures, which could cause the loss or corruption of
data or malfunctions of software or hardware as well as adversely
affect our ability to provide products and services on our
platform. Our business could also be adversely affected by the
effects of Zika virus, Ebola virus disease, H1N1 flu, H7N9 flu,
avian flu, Severe Acute Respiratory Syndrome, or SARS, or other
epidemics. Our business operations could be disrupted if any of
our employees is suspected of having Zika virus, Ebola virus
disease, H1N1 flu, H7N9 flu, avian flu, SARS or other epidemic,
since it could require our employees to be quarantined and/or our
offices to be disinfected. In addition, our results of operations
could be adversely affected to the extent that any of these
epidemics harms the Chinese economy in general.

Labor laws in the PRC may adversely affect our
results of operations.

The PRC Labor Law and the Labor Contract Law require that
employers must execute written employment contracts with
full-time employees. If an employer fails to enter into a written
employment contract with an employee within one year from the
date on which the employment relationship is established, the
employer must rectify the situation by entering into a written
employment contract with the employee and pay the employee twice
the employees salary for the period from the day following the
lapse of one month from the date of establishment of the
employment relationship to the day prior to the execution of the
written employment contract. All employers must compensate their
employees with wages equal to at least the local minimum wage
standards. Violations of the PRC Labor Law and the Labor Contract
Law may result in the imposition of fines and other
administrative sanctions, and serious violations may result in
criminal liabilities. In the event we decide to significantly
change or decrease our workforce, the PRC Labor Law and the Labor
Contract Law could adversely affect our ability to enact such
changes in a manner that is most advantageous to our business or
in a timely and cost-effective manner, thus materially adversely
affecting our financial condition and results of operations.

Enterprises in China are required by PRC laws and regulations to
participate in certain employee benefit plans, including social
insurance funds, namely a pension plan, a medical insurance plan,
an unemployment insurance plan, a work-related injury insurance
plan and a maternity insurance plan, and a housing provident
fund, and contribute to the plans or funds in amounts equal to
certain percentages of salaries, including bonuses and
allowances, of the employees as specified by the local government
from time to time at locations where they operate their
businesses or where they are located. Failure to make adequate
contributions to various employee benefit plans may be subject to
fines and other administrative sanctions.

We are dependent on certain key personnel and the
loss of these key personnel could have a material adverse effect
on our business, financial condition and results of
operations.

Our success will be, to a large degree, attributable to the
founders, managers and key employees of the companies operating
in the PRC. Although we have no reason to believe that these
individuals would discontinue their services with us, the loss of
one or more of these founders, managers or key employees could
have a material adverse effect upon our business, financial
condition and results of operations.

We may not be able to manage our business expansion
and increasingly complicated operations effectively, which could
harm our business.

We plan to expand by means of acquiring cash-generating
businesses in similar industries as our companies operating in
the PRC, and also in other competitive industries in the PRC and
outside of the PRC. If our planned expansion is successful, it
will result in substantial demands on our management and
personnel and our operational, technological and other resources.
To manage the expected growth of our operations, we will be
required to expand our existing operational, administrative and
technological systems and our financial systems, procedures and
controls, and to expand, train and manage the planned growth in
our employee base. We cannot assure you that our current and
planned personnel, systems, procedures and controls will be
adequate to support our future operations, or that we will be
able to effectively and efficiently manage the growth of our
operations, and recruit and retain qualified personnel. Any
failure to effectively and efficiently manage our expansion may
materially and adversely affect our ability to capitalize on new
business opportunities, which in turn may have a material adverse
effect on our financial condition and results of operations.

Our power production business and construction of
properties for our hotel business are both dependent upon
availability of skilled and unskilled labor, a deficiency of
which could result in a reduction in profits.

Our operating companies in the PRC are dependent on the
availability of skilled and unskilled labor in large numbers.
Large labor intensive operations call for good monitoring and
maintenance of cordial relations. Non-availability of labor, poor
labor management and/or any disputes between the labor and
management may result in a reduction in profits. The scarcity or
unavailability of contract laborers may affect our operations and
financial performance.

We face increasing labor costs and other costs of
production in the PRC, which could limit our
profitability.

Our operating companies in the PRC are dependent on the
availability of skilled and unskilled labor in large numbers.
Labor costs in the PRC have been increasing in recent years and
our labor costs in the PRC could continue to increase in the
future. If labor costs in the PRC continue to increase, our
production costs will likely increase which may in turn affect
the selling prices of our products. We may not be able to pass on
these increased costs to consumers by increasing the selling
prices of our products in light of competitive pressure in the
markets where we operate. In such circumstances, our profit
margin may decrease.

We have not purchased insurance coverage and any loss
resulting from direct or third party liability claims or casualty
losses must be paid by us.

We have not purchased insurance coverage for direct or third
party liability and are therefore not covered or compensated by
insurance in respect of losses, damages, claims and liabilities
arising from or in connection with direct or third party
liability. In addition, we currently do not maintain any property
insurance policies covering losses due to fire, flood,
earthquake, equipment failure, break-ins, typhoons and similar
events, nor do we maintain business interruption insurance. As a
result, our business and prospects could be adversely affected in
the event of such problems in our operations and may suffer
losses that could have a material adverse effect on our business,
financial condition, results of operations, or cash flows.

Violation of Foreign Corrupt Practices Act or China
anti-corruption law could subject us to penalties and other
adverse consequences.

We are subject to the United States Foreign Corrupt Practices Act
(FCPA) which generally prohibits United States public companies
from bribing or making prohibited payments to foreign officials
to obtain or retain business. PRC law also strictly prohibits
bribery of government officials. While we take precautions to
educate our employees about the FCPA and Chinese anti-corruption
law, there can be no assurance that we or the employees or agents
of our subsidiaries will not engage in such conduct, for which we
may be held responsible. If that were to occur, we could suffer
penalties that may have a material adverse effect on our
business, financial condition and results of operations.

Risks related to our common stock

None of our board of directors are considered audit
committee financial experts. If we fail to maintain an effective
system of internal control over financial reporting, we may not
be able to accurately report our financial results. As a result,
current and potential shareholders could lose confidence in our
financial reporting, which would harm our business and the
trading price of our stock.

Our internal accounting staff and our Board of Directors are
relatively inexperienced with U.S. GAAP and the related internal
control procedures required of U.S. public companies. Although
our accounting staff is professional and experienced in
accounting requirements and procedures generally accepted in the
PRC, management has determined that they require additional
training and assistance in U.S. GAAP matters. Management has
determined that our internal audit function is also significantly
deficient due to insufficient qualified resources to perform
internal audit functions. Finally, we have not established an
Audit Committee of our Board of Directors.

Although we have not evaluated the internal controls over
financial reporting of the business activities at CJC , we cannot
assure investors that we will be able to maintain effective
internal controls over financial reporting based on criteria set
forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control-Integrated
Framework. A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting,
such that there is a reasonable possibility that a material
misstatement of the company’s annual or interim financial
statements will not be prevented or detected on a timely basis.
For these reasons, we are considering the costs and benefits
associated with improving and documenting our disclosure controls
and procedures and internal controls and procedures, which
includes (i) our recent hiring of a business consulting firm that
has expertise in accounting and U.S. GAAP matters with
publicly-traded companies (ii) hiring additional personnel with
sufficient U.S. GAAP experience and (iii) implementing ongoing
training in U.S. GAAP requirements for our CFO and accounting and
other finance personnel. If the result of these efforts are not
successful, or if material weaknesses are identified in our
internal control over financial reporting, our management will be
unable to report favorably as to the effectiveness of our
internal control over financial reporting and/or our disclosure
controls and procedures, and we could be required to further
implement expensive and time-consuming remedial measures and
potentially lose investor confidence in the accuracy and
completeness of our financial reports which could have an adverse
effect on our stock price and potentially subject us to
litigation.

The tradability of our common stock is limited under
the penny stock regulations which may cause the holders of our
common stock difficulty should they wish to sell the
shares.

Because the quoted price of our common stock is less than $5.00
per share, our common stock is considered a penny stock and
trading in our common stock is subject to the requirements of
Rule 15g-9 under the Securities Exchange Act of 1934. Under this
rule, broker/dealers who recommend low-priced securities to
persons other than established customers and accredited investors
must satisfy special sales practice requirements. The
broker/dealer must make an individualized written suitability
determination for the purchaser and receive the purchasers
written consent prior to the transaction.

SEC regulations also require additional disclosure in connection
with any trades involving a penny stock including the delivery,
prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and its associated risks. These
requirements severely limit the liquidity of securities in the
secondary market because few brokers or dealers are likely to
undertake these compliance activities and this limited liquidity
will make it more difficult for an investor to sell his shares of
our common stock in the secondary market should the investor wish
to liquidate the investment. In addition to the applicability of
the penny stock rules, other risks associated with trading in
penny stocks could also be price fluctuations and the lack of a
liquid market.

Our controlling stockholders may take actions that
conflict with your interests.

As of the closing of the Transactions as provided for in the
Share Exchange Agreement, as amended and the filing of this Form
8-K, two shareholders beneficially own approximately 58.8% of our
common stock. In this case, this shareholder will be able to
exercise control over all matters requiring stockholder approval,
including the election of directors, amendment of our certificate
of incorporation and approval of significant corporate
transactions, and it will have significant control over our
management and policies. The directors elected by this
stockholder will be able to significantly influence decisions
affecting our capital structure. This control may have the effect
of delaying or preventing changes in control or changes in
management, or limiting the ability of our other stockholders to
approve transactions that they may deem to be in their best
interest.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING
INFORMATION

This report includes forward-looking statements that relate to
future events or our future financial performance and involve
known and unknown risks, uncertainties and other factors that may
cause our actual results, levels of activity, performance or
achievements to differ materially from any future results, levels
of activity, performance or achievements expressed or implied by
these forward-looking statements. Words such as, but not limited
to,
believe,expect,anticipate,estimate,intend,plan,targets,likely,aim,will,would,could,
and similar expressions or phrases identify forward-looking
statements. We have based these forward-looking statements
largely on our current expectations and future events and
financial trends that we believe may affect our financial
condition, results of operation, business strategy and financial
needs. Forward-looking statements include, but are not limited
to, statements about:

		Factors affecting our customers businesses.
	Inability of our suppliers to fulfill our orders for raw materials.
	Increases in the price of raw materials.
	Dependence on certain key personnel.
	Competition in the energy and hotel industries.
	Adverse affects of power shortages.
	Lack of market acceptance of new products.
	Inability to manage our business expansion.
	Our inadvertent infringement of third-party intellectual property rights.
	PRC government fiscal policy that affect the energy and hotel industries.
	Availability of skilled and unskilled labor and increasing labor costs.
	Lack of insurance coverage and the impact of any loss resulting from product liability or third party liability claims or casualty losses.
	Violation of Foreign Corrupt Practices Act or China anti-corruption laws.
	Economic, legal restrictions and business conditions in China.
	Dilution attributable to our convertible debt.
	Limited public market for our common stock.
	Potential conflicts of interest between our controlling stockholders and our stockholders.

You should read thoroughly this report and the documents that we
refer to herein with the understanding that our actual future
results may be materially different from and/or worse than what
we expect. We qualify all of our forward-looking statements by
these cautionary statements including those made in Risk Factors.
Other sections of this report include additional factors which
could adversely impact our business and financial performance.
Moreover, we operate in an evolving environment. New risk factors
emerge from time to time and it is not possible for our
management to predict all risk factors, nor can we assess the
impact of all factors on our business or the extent to which any
factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements. Except for our ongoing obligations to disclose
material information under the Federal securities laws, we
undertake no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the
occurrence of unanticipated events. These forward-looking
statements speak only as of the date of this report, and you
should not rely on these statements without also considering the
risks and uncertainties associated with these statements and our
business.

FINANCIAL INFORMATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results
of operation for the years ended December 31, 2015 and 2014
should be read in conjunction with the financial statements and
the notes to those statements that are included in this report.

Overview

Acquisition of CJC

On October 10, 2016 Axiom Holdings, Inc. (Axiom) entered into a
Share Exchange Agreement (the Agreement) by and between Axiom,
CJC Holdings, Ltd., a Hong Kong corporation (together with its
subsidiaries, CJC) and the two sole shareholders of CJC, Hu
Dengyang and Yang Chuan (the CJC Shareholders). On December 21,
2016, the parties to the Agreement, along with Horizon Resources
Co. Ltd., a Cayman Islands company and a wholly owned subsidiary
of the Company (Horizon),entered into an Amendment to the Share
Exchange Agreement (the SEA Amendment, and such Share Exchange
Agreement, as amended, the Share Exchange Agreement, as amended).
to the Share Exchange Agreement, as amended, Horizon agreed to
acquire all of the issued and outstanding shares of CJC (the CJC
Shares) from the CJC Shareholders in exchange for the issuance by
Axiom to the CJC Shareholders of 200,000,000 shares of Axioms
common stock, par value $0.001 per share (the Common Stock). In
connection with the transactions contemplated under the Share
Exchange Agreement, as amended(the Transactions), the Company
cancelled 200,000,000 shares of its Common Stock which was issued
and outstanding prior to the closing of the Transactions.
Following the closing of the Transactions, the CJC Shareholders
represent approximately 58.8% of the issued and outstanding
shares of the Common Stock. Following the closing of the
Transactions, CJC is now a wholly-owned subsidiary of Horizon.

CJC Business Overview

Each of Axiom, Horizon, CJC, and the WFOEs are holding companies
and have no principal business. The following consists of a
discussion of the CJC operating subsidiaries that make up the
operations within the Power Production Segment and the
Hospitality Segment:

Power Production Segment

Overview. We are engaged in operating, developing and
seek to acquire electric generating facilities in China. We
currently operate two hydro-electric generating plants each of
which have average annual output capacity of 112.5548 million
kWh. In addition, two hydro-electric generating plants are under
construction as discussed below. In addition, we are seeking to
acquire other electric generating plants in China.

Jitai Power Investment. Jitai Power Investment operates
a hydropower electric generation station located in Xiaojin,
Sichuan, China, which commenced operations in September 2009. The
station has an annual average output of 125.664 million kilowatt
hours (kWh).

Xin Hong Power Development. Xin Hong Power Development
operates, or is completing, the Jiesigou I, II and III hydropower
stations located in Xiaojin, Sichuan, China. The Jiesigou II
hydropower station began operations in September, 2016 with an
installed electricity capacity of 24,000 kWh, and an average
annual output of 112.5548 million kWh. The Jiesigou I and
Jiesigou III hydropower stations are currently expected to come
on-line in 2019.

Xing Tie Electric. Xing Tie Electric is engaged in the
purchase and sale of power generating equipment, primarily to Xin
Hong Power Development.

Hospitality Segment

EnZe Hotel Management. EnZe Hotel Management owns and is
nearing completion of construction of the Enze Hotel located at
47 Government Street, Mei Xin Town, Xiaojin County, China upon.
The hotel is expected to be completed and open for business in
June 2017. This hotel is located across the street from the
HongjunHuishi Square. The Enze Hotel will have 190 guest rooms,
including 178 luxury guest rooms, and 12 deluxe suites, and will
cover a total of over 114,000 square feet. The hotel will include
a shopping area, business center, the 600-seatEnZe Restaurant, a
tea house in the lobby, a KTV (karaoke) house with ten private
rooms, a seven room spa, five conference rooms, three large
meeting rooms, and two multi-function halls which will
accommodate up to 800 people. We intend to sell bookings for the
hotel, the public meeting halls, the restaurant and the spa
directly in person, over the phone, through our website, and
through third party service providers including internet- and
mobile-based third party service providers. We will lease space
in our shopping area to premium brand retailers.

SiGuNiang Mountain Hotel Management. SiGuNiang Mountain
Hotel Management owns and is nearing completion of construction
of the Mt. Four Sisters Hotel, located in SiGuNiang Mountain
Town, Xiaojin County, Sichuan Province, China. The hotel is
expected to be completed and open for business in June 2017. The
hotel is adjacent to the provincial highway S303, and its rear
faces the Siguniang Mountain town government center. This area is
the center of tourism, entertainment and catering services in
SiGu Niang Mountain Town, and is approximately 143 miles from
Chengdu, the capital city of Sichuan and approximately 112 miles
from Maerkang, the capital of Aba Autonomous Region. The hotel
will have 90 guest rooms on six floors, will cover a total of
over 71,000 square feet, and is mainly in the Jiarong Tibetan
>

Results of Operations

The following discussion of our financial condition and results
of operation for the years ended December 31, 2015 and 2014
should be read in conjunction with the financial statements and
the notes to those statements that are included elsewhere in this
report.

For the year ended December 31, 2015 compared to
2014

Net revenues totaled $1,987,464 for the year ended December 31,
2015, a decrease of $195,649, or 9.0% compared to 2014. The
decrease was primarily a result of a decrease in sales of
electricity as a result of maintenance of facility from Aug 2014
to Jun 2015.

Cost of goods sold totaled $833,467 for the year ended December
31, 2015, a decrease of $90,655, or 9.8% compared to 2014,
primarily as the result of a reduction of depreciation expense
during the period of facility maintenance. Our cost of revenues
consisted mainly of depreciation of facility and usage of fuel
and gas.

Gross profit was 58.1% (1,153,997) and 57.7% (1,258,991) for the
year ended December 31, 2015 and 2014, respectively.

Selling, general and administrative expenses totaled $568,803 for
the year ended December 31, 2015, a decrease of $1,475,822, or
72.2%, compared to 2014, primarily due to accrual of management
fee at year 2014.

Other expense totaled $1,092,174 in 2015, an increase of $288,836
compared to 2014, mainly due to an increase of $264,870 in
interest expense related to increase borrowings and a $23,966
increase in other loss.

Net loss totaled $506,980 for the year ended December 31, 2015, a
decrease of $1,081,992, or 68.1%, compared to 2014, primarily as
the result of a decrease of $1,475,822 in selling, general and
administrative expenses and a $90,655 decrease in cost of goods
sold, partially offset by a decrease of $195,649 in net revenues.

Liquidity and Capital Resources

		September 30,			December 31,			December 31,
Cash and Cash Equivalents		$	43,320			$	140,438			$	165,896
Current Assets			9,599,458				292,889				1,873,978
Current Liabilities			34,737,321				29,182,842				27,535,942
Working Capital Deficiency		$	(25,137,863	)		$	(28,889,953	)		$	(25,661,964	)

Liquidity is the ability of a company to generate amounts of cash
to meet its needs for cash. We had a working capital deficiency
of $25.1 million as of September 30, 2016, $28.9 million as of
December 31, 2015, and $25.7 million as of December 31, 2014,
respectively. As at September 30, 2016, our assets increased
primarily due to an increase in prepaid expenses and deposits.
The decrease in current assets at December 31, 2015 as compared
to 2014, was primarily due to the repayment of a loan from a
related party. Our current liabilities have increased each period
primarily due to increases in amounts due to related parties. As
at September 30, 2016, December 31, 2015, and December 31, 2014,
we owe related parties $28.9 million, $22.6 million, and $21.6
million, respectively.

Our primary uses of cash have been for construction of the hotel
properties and hydroelectric facilities, repayment of our current
obligations, and general and administrative expenses including
wages. Our primary sources of cash are derived from revenues from
the sales of electricity from our hydroelectric facilities and
bank loans.

We expect that our cash on hand and cash flow from operations
will be sufficient to sustain our operations for at least the
next twelve months. However, the following trends are reasonably
likely to require us to raise additional capital.

		An increase in working capital requirements to finance construction and operation of hotels and the construction of the Jiesigou I and Jiesigou III hydroelectric power stations;
	Acquisitions of additional equipment, with related increases to capital expenditures, marketing and administrative expenses to support the growth of our company;
	The costs for recruitment and retention of additional management and personnel to support our operations and expansion plans; and
	The additional costs, including legal accounting and consulting fees, of being a public company and the related compliance activities.

Cash is held in banks in the Peoples Republic of China (PRC) and
is not insured. The value of cash on deposit in Renminbi (RMB)
has been converted to U.S. dollars based on the exchange rate as
of respective balance sheet dates. In 1996, the Chinese
government introduced regulations, which relaxed restrictions on
the conversion of the RMB; however restrictions still remain,
including but not limited to restrictions on foreign invested
entities. Foreign invested entities may only buy, sell or remit
foreign currencies after providing valid commercial documents at
only those banks authorized to conduct foreign exchanges.
Furthermore, the conversion of RMB for capital account items,
including direct investments and loans, is subject to PRC
government approval. Chinese entities are required to establish
and maintain separate foreign exchange accounts for capital
account items. We cannot be certain Chinese regulatory
authorities will not impose more stringent restrictions on the
convertibility and outflow of RMB, especially with respect to
foreign exchange transactions. Accordingly, cash on deposit in
banks in the PRC is not readily deployable by us for purposes
outside of China.

Critical Accounting Policies

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America (U.S. GAAP) requires estimates and assumptions that
affect the reported amounts of assets and liabilities, revenues
and expenses, and related disclosures of contingent assets and
liabilities in the consolidated financial statements and
accompanying notes. The SEC has defined a companys critical
accounting policies as the ones that are most important to the
portrayal of the companys financial condition and results of
operations, and which require the company to make its most
difficult and subjective judgments, often as a result of the need
to make estimates of matters that are inherently uncertain. Based
on this definition, we have identified the critical accounting
policies and judgments addressed below. We also have other key
accounting policies, which involve the use of estimates,
judgments and assumptions that are significant to understanding
our results, which are described in note 2 to our financial
statements. Although we believe that our estimates, assumptions
and judgments are reasonable, they are based upon information
presently available. Actual results may differ significantly from
these estimates under different assumptions, judgments or
conditions.

Revenue recognition

Revenues for product sales are recognized when all four of the
following criteria are met: (i) persuasive evidence of an
arrangement exists; (ii) delivery of the products has occurred
and risks and rewards of ownership have passed to the customer;
(iii) the selling price is both fixed and determinable; and (iv)
collectability is reasonably assured. For any advance payments
from customers, revenues are deferred until such a time when all
the four criteria mentioned above are fully met.

PROPERTIES

Description of Property

Corporate

Our principal executive offices are located at Room C, 15/F.,
Ritz Plaza, 122 Austin Road, Tsimshatsui, Kowloon, Hong Kong.
This office space which is being provided to us rent-free by a
shareholder on a month-to-month basis.

Power Production Segment

Jitai Power Investment operates a hydropower electric generation
station located in Xiaojin, Sichuan, China. The station has an
annual average output of 125.664 million kWh.

Xin Hong Power Development operates, or is completing, the
Jiesigou I, II and III hydropower stations located in Xiaojin,
Sichuan, China. The Jiesigou II hydropower station began
operations in September, 2016 with an installed electricity
capacity of 24,000 kWh, and an average annual output of 112.5548
million kWh.

Xing Tie Electric is engaged in the purchase and sale of power
generating equipment, primarily to Xin Hong Power Development.
Its corporate offices are located at Si Chuan Sheng A Ba Zhou
Xiao Jin Xian Wori Xiang Zhong Ma Chang, China.

Hospitality Segment

EnZe Hotel Management owns and is nearing completion of
construction of the Enze Hotel located at 47 Government Street,
Mei Xin Town, Xiaojin County, China upon. The Enze Hotel will
have 190 guest rooms, including 178 luxury guest rooms, and 12
deluxe suites, and will cover a total of over 114,000 square
feet. The hotel will include a shopping area, business center,
the 600-seatEnZe Restaurant, a tea house in the lobby, a KTV
(karaoke) house with ten private rooms, a seven room spa, five
conference rooms, three large meeting rooms, and two
multi-function halls which will accommodate up to 800 people.

SiGuNiang Mountain Hotel Management owns and is nearing
completion of construction of the Mt. Four Sisters Hotel, located
in SiGuNiang Mountain Town, Xiaojin County, Sichuan Province,
China.

We have not obtained formal title certificates in respect of the
land that certain of our operating companies use. We are in the
process of completing the legal procedures for obtaining the
relevant title certificates for the parcels of land and buildings
involved and registering them in the name of our operating
companies.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

As of the filing of this Form 8-K and the completion of the
Transactions, we have 340,000,000 shares of common stock issued
and outstanding. The following table sets forth information known
to us as of the date of filing relating to the beneficial
ownership of shares of our voting securities by:

		each person who is known by us to be the beneficial owner of more than 5% of our outstanding voting stock;
		each director;
		each named executive officer; and
		all named executive officers and directors as a group.

The percentages in the table have been calculated on the basis of
treating as outstanding for a particular person and all shares of
our common stock outstanding on that date. Except as otherwise
indicated, the persons listed below have sole voting and
investment power with respect to all shares of our common stock
owned by them, except to the extent that power may be shared with
a spouse.

Name of Beneficial Owner		Amount and Nature of Beneficial Ownership			% of Class
CurtisRiley(1)								%
All officers and directors as a group (one person)								%
5% Shareholders
Hu Dengyang(1)			160,000,000				47.0	%
Yang Chuan(1)			40,000,000				11.8	%

_____________

	(1)	Hu Dengyangs address is Level 13, 68 Yee Wo Street, Causeway Bay, Hong Kong.
	(2)	Yang Chuans address is Level 13, 68 Yee Wo Street, Causeway Bay, Hong Kong.

DIRECTORS AND EXECUTIVE OFFICERS

The following individuals have been appointed to serve as our
executive officers and directors:

Name		Age		Positions
Curtis Riley				Chief Executive Officer, Chief Financial Officer and Director

Curtis Rileyis the Companys Chief
Executive Officer, Chief Financial Officer and director. Mr.
Riley has served as Chief Executive Officer, Chief Financial
Officer and director of the Company since October 10, 2016. With
over 25 years of experience, Mr. Riley, aged 55, has been forging
strategic partnerships, completing merger and acquisition
transactions, and structuring large scale outsourcing
arrangements in India, China, South America, and Europe. From
January 2014 to January 2016, Mr. Riley was a Senior Partner with
Silverbear Capital, Inc., a Hong Kong based consulting and
investment banking firm. From June 2012 to January 2014, Mr.
Riley was an Executive Director, Global Channels with gen-E
Technologies, which created and maintained partnerships between
itself and systems integrators in Asia, India and North America.
From June 2011 to June 2012, Mr. Riley was the Vice President of
Business Development at Allsec Technologies, a provider of
business process outsourcing services including loan
modifications, default services, telemarketing, customer care,
and technical support. My Riley served as a Director of Jiasen
International Holdings from September 2015 to May 2016. Mr. Riley
received a Bachelor of Science degree in Electrical Engineering
from the University of Texas, Austin in 1983. There are no other
arrangements or understanding between Mr. Reilly and any other
person to which Mr. Reilly was selected as a director or an
officer. Mr. Reilly has no family relationships with any
director, executive officer, or person nominated or chosen by the
Company to become a director or executive officer. There have
been no transactions, since the beginning of the Companys last
fiscal year, and there are no currently proposed transactions, in
which the Company was or is to be a participant and the amount
involved exceeds $120,000, and in which Mr. Riley had or will
have a direct or indirect material interest

Director Qualifications

The following is a discussion for each director of the specific
experience, qualifications, attributes or skills that led to our
conclusion that such person should be serving as a member of our
Board of Directors as of the date of this report in light of our
business and structure. In addition to their individual skills
and backgrounds which are focused on our industry as well as
financial and managerial experience, we believe that the
collectively skills and experience of our Board members are well
suited to guide us as we make the transition from a company with
limited operations to a company which seeks to expand through
acquisitions.

Curtis Riley. Mr. Riley has over 25
years of experience in the operation and management of investment
companies, including leading investments into PRC operating
companies.

Committee of our Board of Directors

We have not established any committees, including an Audit
Committee, a Compensation Committee or a Nominating Committee,
any committee performing a similar function. The functions of
those committees are being undertaken by Board of Directors as a
whole. Because we have only one director who is not independent,
we believe that the establishment of these committees would be
more form over substance.

We do not have a policy regarding the consideration of any
director candidates which may be recommended by our stockholders,
including the minimum qualifications for director candidates, nor
has our Board of Directors established a process for identifying
and evaluating director nominees. We have not adopted a policy
regarding the handling of any potential recommendation of
director candidates by our stockholders, including the procedures
to be followed. Our Board has not considered or adopted any of
these policies as we have never received a recommendation from
any stockholder for any candidate to serve on our Board of
Directors. Given our relative size and lack of directors and
officers insurance coverage, we do not anticipate that any of our
stockholders will make such a recommendation in the near future.
While there have been no nominations of additional directors
proposed, in the event such a proposal is made, all members of
our Board will participate in the consideration of director
nominees. In considering a director nominee, it is likely that
our Board will consider the professional and/or educational
background of any nominee with a view towards how this person
might bring a different viewpoint or experience to our Board.

Our sole director is not an audit committee financial expert
within the meaning of Item 401(e) of Regulation S-K. In general,
an audit committee financial expert is an individual member of
the audit committee or Board of Directors who:

		understands generally U.S. GAAP and financial statements,
	is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,
	has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,
	understands internal controls over financial reporting, and
	understands audit committee functions.

Members of the Companys board of directors have a limited
knowledge of U.S. GAAP and internal control over financial
reporting. The Companys board of directors relies on an outside
accounting consultant to provide assistance with the preparation
of U.S. GAAP compliant financial statements and requires
additional training and assistance in U.S. GAAP compliance.

EXECUTIVE COMPENSATION

The following table summarizes all compensation recorded by Axiom
in 2015 and 2014 for our then principal executive officer, each
other executive officer serving as such whose annual compensation
exceeded $100,000, and up to two additional individuals for whom
disclosure would have been made in this table but for the fact
that the individual was not serving as an executive officer of
our company at December 31, 2015.

2015 Summary Compensation Table

Name and Principal Position

Fiscal Year Ended

Salary ($)

Bonus ($)

Stock Awards ($)

Option Awards ($)

All Other Compensation ($)

Total ($)

Low Tuan Lee(1)

–

–

–

–

–

–

Chua Seong Seng(2)

2015/2014

–

–

–

–

–

–

Michael Hay(3)

–

–

–

–

–

–

_____________
	(1)	Mr. Lee resigned as an officer and director of the company on October 10, 2016.
(2)	Mr. Seng resigned as our Chief Executive Officer and Director on February 9, 2016.
(3)	Mr. Hay resigned as our Chief Executive Officer and Director on August 17, 2015.

Outstanding Equity Awards at 2015 Fiscal
Year-End

OPTION AWARDS

STOCK AWARDS

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)

Option Expiration Date

Number of Shares or Units of Stock That Have Not Vested (#)

Market Value of Shares or Units of Stock That Have Not Vested ($)

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Low Tuan Lee(1)

Chua Seong Seng(2)

Michael Hay(3)

_____________

	(1)	Mr. Lee resigned as an officer and director of the company on October 10, 2016.
	(2)	Mr. Seng resigned as our Chief Executive Officer and Director on February 9, 2016.
	(3)	Mr. Hay resigned as our Chief Executive Officer and Director on August 17, 2015.

Compensation of Directors

We have not established standard compensation arrangements for
our directors and the compensation payable to each individual for
their service on our Board is determined from time to time by our
Board of Directors based upon the amount of time expended by each
of the directors on our behalf. Neither Mr. Hay who was our Chief
Executive Officer until August 17, 2016 nor Mr. Low Tuan Lee who
was appointed as our Chief Executive Officer and Chairman of the
Board of Directors on August 17, 2016, received any compensation
specifically for their services as a director. The following are
all directors with the compensation set forth in parenthesis
after their name.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As of September 30, 2016 (unaudited), December 31, 2015 and 2014,
the Company was obligated to the following related parties in the
amounts set forth below:

		September 30,			December 31,			December 31,
Related Party Name											Relationship with the Company
		(Unaudited)
Yeung Baigui		$	3,240,064			$	2,963,213			$	1,391,653			Current director and former stockholder of SiGuNiang Mountain Hotel Management.
Wu Hongguang			8,031,589				7,810,900				14,431,527			Current director of JitaiPower Investment and its former stockholder and Xing Tie Electric.
Chen Juan			1,248,918				–				–			Current director of and former stockholder of EnZe, Hotel Management.
Hu Dengyang			1,410,732				–				–			Director of JBX.
Wu Ling Electrical Engineering Company Limited			2,235,894				1,540,924				1,611,967			Former stockholder of Xing Tie, currently under the same ultimate common control with CJC.
Sichuan Jiuyuen Property Development Company Limited			400,898				414,351				433,454			Under the same ultimate common control with CJC.
Sichuan Jiuyuen Electrical Engineering Company Limited			9,181,957				7,286,028				3,435,685			Under the same ultimate common control with CJC.
Xinlong Xi Da Electrical Engineering Company Limited			280,040				289,437				302,781			Under the same ultimate common control with CJC.
Li Yuen Huacheng Electrical Engineering Company Limited			2,418,252				2,160,602				–			Under the same ultimate common control with CJC.
Sichuan Red Leaf Electrical Engineering Company Limited			402,151				153,846				–			Under the same ultimate common control with CJC.
	$	28,850,495			$	22,619,301			$	21,607,067

The amounts identified above are non-interest bearing, unsecured
and have no fixed terms of repayment.

An unrelated company (the Guarantor) has provided a guarantee for
JitaiPower Investment a related company of CJC (the Related
Company) to secure a bank loan of $1,449,900 which matured in
2014. Jitai Power Investment has in turn provided a guarantee to
the Guarantor. Upon maturity of the loan, Power Investment failed
to repay the loan. Hence, the Guarantor repaid the amount to the
bank for Jitai Power Investment, but its failed to fulfill its
obligation for the guarantee to the Guarantor. By a court order,
an agreement (the Jitai Agreement) between the Guarantor and
JitaiPower Investment was reached whereby the revenue of Jitai
Power Investment from June 2016 will be paid directly from its
customer to the Guarantor until a total of $1,364,620 has been
repaid to the Guarantor.

As of December 31, 2014, CJChad advanced Li Yuen Huacheng
Electrical Engineering Company Limited, $1,228,626. As of
September 30, 2016, CJChad advanced Chengdu Shangyan Hotel
Management Company Limited $298,000. These companies are under
common control as CJC. The amount was non-interest bearing,
unsecured and had no fixed terms of repayment. As of the date of
this report, the amount has been fully settled.

LEGAL PROCEEDINGS

We are not presently a party to any material litigation, nor to
the knowledge of management is any litigation threatened against
us, that may materially affect us.

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock has been quoted on the OTCQB tier of the OTC
Markets Group, Inc. since November 11, 2015 and is traded under
the symbol AIOM. Our stock is thinly traded on the OTCQB and
there can be no assurance that a liquid market for our common
stock will ever develop.

Security Holders

As of December 20, 2016, we had 340,000,000 shares of our common
stock outstanding held by 15 stockholders of record.

Dividend Policy

We have never paid a cash dividend on our common stock. We
currently intend to retain all earnings, if any, to finance the
growth and development of our business. We do not anticipate
paying any cash dividends in the foreseeable future.

Equity Compensation Plans

None.

Recent Sales of Unregistered Securities

Please see Item 3.02 – Unregistered Sales of Equity Securities of
this Current Report.

DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 3,000,000,000 shares of
common stock, par value $0.001 per share, and 50,000,000 shares
of preferred stock, par value $0.001 per share. As of the date of
this filing, and after giving effect to the completion of our
acquisition of the CJC Shares, there are 340,000,000 shares of
our common stock outstanding and 0 shares of our preferred stock
outstanding.

Common Stock

Holders of common stock are entitled to one vote for each share
on all matters submitted to a stockholder vote. Holders of common
stock do not have cumulative voting rights. Holders of common
stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available
funds. In the event of our liquidation, dissolution or winding
up, subject to the preferences of any shares of preferred stock
which may then be authorized and outstanding, each outstanding
share entitles its holder to participate in all assets that
remain after payment of liabilities and after providing for each
class of stock, if any, having preference over the common stock.

Holders of common stock have no conversion, preemptive or other
subscription rights, and there are no redemption provisions for
the common stock. The rights of the holders of common stock are
subject to any rights that may be fixed for holders of preferred
stock, when and if any preferred stock is authorized and issued.
All outstanding shares of common stock are duly authorized,
validly issued, fully paid and non-assessable.

Preferred Stock

The Companys Articles of Incorporation, as amended, authorize the
Board of Directors to issue up to 50,000,000 shares of preferred
stock having the rights and privileges designated by the Board of
Directors. There are no issued and outstanding shares of the
Companys preferred stock. In the event that preferred stock is
issued and outstanding, holders of the preferred stock dividend,
liquidation and redemption rights senior to the common stock.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Chapter 78 of the Nevada Revised Statutes (the Nevada Corporation
Law) permits the indemnification of directors, employees,
officers and agents of Nevada corporations. Our Articles of
Incorporation and Bylaws provide that we will indemnify our
directors and officers to the fullest extent permitted by the
Nevada Corporation Law.

The provisions of the Nevada Corporation Law that authorize
indemnification do not eliminate the duty of care of a director,
and in appropriate circumstances equitable remedies such as
injunctive or other forms of non-monetary relief will remain
available under Nevada law. In addition, each director will
continue to be subject to liability for a breach of the directors
fiduciary duty to the Company, and such breach resulted from a
knowing violation of a law, intentional misconduct or fraud. The
Nevada Corporation Law does not provide indemnification for
directors in an action by or in the right of the Company. The
statute does not affect a directors responsibilities under any
other law, such as the Federal securities laws. The effect of the
foregoing is to require our company to indemnify our officers and
directors for any claim arising against such persons in their
official capacities if such person acted in good faith and in a
manner that he reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended may be permitted to directors,
officers or persons controlling our company to the foregoing
provisions, we have been informed that in the opinion of the
Securities and Exchange Commission, such indemnification is
against public policy as expressed in the act and is therefore
unenforceable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Please see Item 9.01 – Financial Statements and Exhibits of this
Current Report.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the U.S. Securities and Exchange Commission
(the SEC), located on 100 F Street NE, Washington, D.C. 20549,
Current Reports on Form 8-K, Quarterly Reports on Form 10-Q,
Annual Reports on Form 10-K, and other reports, statements and
information as required under the Securities Exchange Act of
1934, as amended.

The reports, statements and other information that we have filed
with the SEC may be read and copied at the Commission’s Public
Reference Room at 100 F Street NE, Washington, D.C. 20549. The
public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330.

The SEC maintains a web site (HTTP://WWW.SEC.GOV.) that contains
the registration statements, reports, proxy and information
statements and other information regarding registrants that file
electronically with the SEC such as us. You may access our SEC
filings electronically at this SEC website. These SEC filings are
also available to the public from commercial document retrieval
services.

Item 3.02 Unregistered Sale of Equity
Securities.

Under the Share Exchange Agreement, as amended described in Item
1.01 of this report, we issued 200,000,000 shares of Common Stock
to the CJC Shareholders in exchange for the acquisition by
Horizon of all of the issued and outstanding CJC Shares. The
issuance of our Common Stock was exempt from registration under
the Securities Act of 1933, as amended (the Securities Act), in
reliance on an exemption provided by Section 4(a)(2) of that
actin a transaction not involving a public offering or
distribution. These shares may not be transferred or sold absent
registration under the Securities Act or an applicable exemption
therefrom.

Item 5.01 Changes in Control of Registrant.

The information set forth in Item 2.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 5.01.

Except as described herein, there were no arrangements or
understandings among members of both the former and new control
groups and their associates with respect to the election of
directors or other matters. As required to be disclosed by
Regulation S-K Item 403(c), there are no arrangements, known to
the Company, including any pledge by any person of securities of
the Company or any of its parents, the operation of which may at
a subsequent date result in a change in control of the Company.

Item 5.06 Change in Shell Company Status.

As a result of the consummation of the Transactions described in
Item 2.01 of this Form 8-K, we are no longer a shell company as
that term is defined in Rule 405 of the Securities Act of 1933,
as amended, and Rule 12b-2 of the Exchange Act of 1934, as
amended.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.		DESCRIPTION
3.1	Articles of Incorporation, as filed with the Nevada Secretary of State (incorporated by reference to Exhibit 3.1 to the Companys Form S-1 (SEC File No. 333-195950) filed with the Commission on May 14, 2014).
3.2	Bylaws (incorporated by reference to Exhibit 3.2 to the Companys Form S-1 (SEC File No. 333-195950) filed with the Commission on May 14, 2014).
10.1	Share Exchange Agreement, dated as of October 10, 2016, by and between Axiom Holdings, Inc., CJC Holdings, Ltd., Hu Dengyang and Yang Chuan (incorporated by reference to Exhibit 10.1 to the Companys Form 8-K filed with the Commission on October 14, 2016).
10.2*	Amendment to Share Exchange Agreement, dated as of December 21, 2016, by and between Axiom Holdings, Inc., CJC(Hong Kong), Ltd., Hu Dengyang and Yang Chuan.
21.1*	Subsidiaries of the Registrant.
99.1*	Audited Financial Statements of CJC (Hong Kong), Ltd. as of December 31, 2015 and 2014 and unaudited financial statements for the nine-month period ended September 30, 2016.
99.2*	Unaudited pro forma combined financial statements as of September 30, 2016 and unaudited pro forma statements of operations for the period ended September 30, 2016.

__________

* Filed herewith.

About Axiom Holdings, Inc. (OTCBB:APYV)

Axiom Holdings, Inc., formerly At Play Vacations, Inc., is a shell company. The Company through its subsidiary, Quality Resort Hotels, Inc. (QRH), is engaged in marketing discount vacation packages to sought-after resort destinations throughout North America. The Company, through QRH, operates as a vacations company that books online travel. It is seeking business opportunities with established business entities for merger with or acquisition of a target business. The Company offers travel services on a package basis primarily through the merchant model and the agency model. Under the merchant model, it facilitates the booking of hotel rooms and destination services from its travel suppliers. Under the agency model, the Company acts as the agent in the transaction, passing reservations booked by the traveler to the relevant travel provider. The Company receives commissions from the travel supplier and/or traveler. Horizon Resources Co. Ltd. is a subsidiary of the Company.