Planet Green Holdings Corp 10-Q for FY2022 Q1
Planet Green Holdings Corp. (PLAG)
About this 10-Q
Planet Green Holdings Corp filed this 10-Q on May 13, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).
Headline figures
Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $11.98M
- up 435.7% from $2.24M a year earlier
- Net loss
- $1.26M
- compared with a net loss of $1.49M a year earlier
- Diluted EPS
- -$0.03
- compared with -$0.08 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly
period ended:
For the transition period from ___________ to ____________
Commission File
Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification Number) |
(Address of principal executive office and zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Indicate by check
mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
The number of outstanding
shares of the registrant’s common stock as of May 13, 2022 was
TABLE OF CONTENT
| PAGE | ||
| PART I - FINANCIAL INFORMATION | 1 | |
| ITEM 1 | FINANCIAL STATEMENTS | 2 |
| ITEM 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 3 |
| ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 5 |
| ITEM 4 | CONTROLS AND PROCEDURES | 5 |
| PART II - OTHER INFORMATION | 6 | |
| ITEM 1 | LEGAL PROCEEDINGS | 6 |
| ITEM 1A | RISK FACTORS | 6 |
| ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 6 |
| ITEM 3 | DEFAULTS UPON SENIOR SECURITIES | 6 |
| ITEM 4 | MINE SAFETY DISCLOSURES | 6 |
| ITEM 5 | OTHER INFORMATION | 6 |
| ITEM 6 | EXHIBITS | 7 |
| SIGNATURES | 8 | |
i
Caution Regarding Forward-Looking Statements
This quarterly report on Form 10-Q contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to the factors described in the section captioned “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”).
In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” or the negative of such terms or other similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.
ii
PART I
Use of Certain Defined Terms
Except where the context otherwise requires and for the purposes of this report only:
| ● | “Anhui Ansheng” refers to Anhui Ansheng Petrochemical Equipment Co., Ltd., a company incorporated in China.
| |
| ● | “Allinyson” refers to Allinyson Ltd., a company incorporated in the State of Colorado. | |
| ● | “Bless Chemical” refers to Bless Chemical Co., Ltd., a company incorporated in Hong Kong. | |
| ● | “Baokuan Hong Kong” refers to Baokuan Technology (Hong Kong) Limited, a company incorporated in Hong Kong. | |
| ● | “China” and “PRC” refer to the People’s Republic of China (excluding Hong Kong, Macau and Taiwan for the purposes of this report only). |
| ● | “Fast Approach” refers to Fast Approach Inc., a corporation incorporated under the laws of Canada. | |
| ● | “Hubei Bulaisi” Refers to Hubei Bulaisi Technology Co., Ltd., a PRC limited liability company.
| |
| ● | “Guangzhou Haishi” refers to Guangzhou Haishi Technology Co., Ltd., a PRC limited liability company. | |
| ● | “Jiayi Technologies” or “WFOE” refers to Jiayi Technologies (Xianning) Co., Ltd, a PRC limited liability company and a wholly foreign-owned enterprise, formerly known as Lucky Sky Petrochemical Technology (Xianning) Co. Ltd. |
| ● | “Jilin Chuangyuan” refers to Jilin Chuangyuan Chemical Co., Ltd., a PRC limited liability company. |
| ● | “Jingshan Sanhe” refers to Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd., a PRC limited company. |
| ● | “Lucky Sky Planet Green” refers to Lucky Sky Planet Green Holdings Co., Limited, a company incorporated in Hong Kong.
| |
| ● | “PLAG,” “we,” “us”, “our,” “Planet Green” and the “Company” refer to Planet Green Holdings Corp., a Nevada corporation, and except where the context requires otherwise, our wholly-owned subsidiaries and VIEs. | |
| ● | “Planet Green BVI” refers to Planet Green Holdings Corporation, a British Virgin Islands company. |
| ● | “RMB” refers to Renminbi, the legal currency of China. |
| ● | “Shanghai Shuning” refers to Shanghai Shuning Advertising Co., Ltd, a PRC limited liability company. |
| ● | “Shandong Yunchu” Refers to Shandong Yunchu Supply Chain Co., Ltd., a PRC limited liability company. |
| ● | “U.S. dollar”, “$” and “US$” refer to the legal currency of the United States. |
| ● | “VIE” refers to variable interest entity. |
| ● | “Xianning Bozhuang” refers to Xianning Bozhuang Tea Products Co., Ltd., a PRC limited liability company. | |
| ● | “Shine Chemical” refers to Shine Chemical Co., Ltd., a company incorporated in British Islands. |
1
ITEM 1. FINANCIAL STATEMENTS
PLANET GREEN HOLDINGS CORP.
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2022 AND DECEMBER 31, 2021
(Stated in US Dollars)
2
F-1
Planet Green Holdings Corp.
Unaudited Condensed Consolidated Balance Sheets
At March 31, 2022 and December 31, 2021
(Stated in US Dollars)
| March 31, 2022 | December 31, 2021 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Advances to suppliers | ||||||||
| Other receivables | ||||||||
| Other receivables-related parties | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Plant and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Construction in progress, net | ||||||||
| Prepayment investments | ||||||||
| Long-term investments | ||||||||
| Investment in real estates | ||||||||
| Deferred tax assets | ||||||||
| Goodwill | ||||||||
| Right-of-use assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Short-term bank loans | ||||||||
| Accounts payable | ||||||||
| Advance from customers | ||||||||
| Taxes payable | ||||||||
| Other payables and accrued liabilities | ||||||||
| Other payables-related parties | ||||||||
| Lease liabilities-current portion | ||||||||
| Deferred income | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Long-term payables | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock: $ | ||||||||
| Common stock: $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Non-controlling interests | ||||||||
| Total stockholders’ equity | $ | $ | ||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See Accompanying Notes to the Financial Statements
F-2
Planet Green Holdings Corp.
Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income
For the Three Months Ended March 31, 2022 and 2021
(Stated in US Dollars)
| For the Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Net revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Selling and marketing expenses | ||||||||
| General and administrative expenses | ||||||||
| Research & Developing expenses | ||||||||
| Total operating expenses | ||||||||
| Operating (loss) income | ( | ) | ( | ) | ||||
| Other (expenses) income | ||||||||
| Interest income | ( | ) | ||||||
| Interest expenses | ( | ) | - | |||||
| Other income | ||||||||
| Other expenses | ( | ) | ( | ) | ||||
| Total other (expenses) income | ( | ) | ||||||
| (Loss) income before income taxes | ( | ) | ( | ) | ||||
| Income tax expenses | ( | ) | - | |||||
| Net (loss) income | ( | ) | ( | ) | ||||
| Less: Net (loss) income attributable to non-controlling interest | ( | ) | ( | ) | ||||
| Net (loss) income attributable to common shareholders | $ | ( | ) | $ | ( | ) | ||
| Net (loss) income | ( | ) | ( | ) | ||||
| Foreign currency translation adjustment | ||||||||
| Total comprehensive (loss) income | ( | ) | ( | ) | ||||
| Less: Comprehensive (loss) income attribute to non-controlling interest | ( | ) | ( | ) | ||||
| Comprehensive (loss) income attribute to common share holders | $ | ( | ) | $ | ( | ) | ||
| Loss per share attributable to common shareholders - Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted weighted average shares outstanding | ||||||||
See Accompanying Notes to the Financial Statements
F-3
Planet Green Holdings Corp.
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Three Months Ended March 31, 2022 and 2021
(Stated in US Dollars)
| Accumulated | ||||||||||||||||||||||||||||
| Additional | Other | Non- | ||||||||||||||||||||||||||
| Number of | Common | Paid-in | Accumulated | Comprehensive | Controlling | |||||||||||||||||||||||
| Shares | Stock | Capital | Deficit | Income | Interests | Total | ||||||||||||||||||||||
| Balance, January 1, 2021 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Net (loss) income | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Issuance of shares for acquisition | - | - | - | |||||||||||||||||||||||||
| Issuance of common stock for cash | ||||||||||||||||||||||||||||
| Stock-based compensation and issue of employee benefit plan stock | - | - | - | - | ( | ) | ||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2021 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Balance, January 1, 2022 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Net (loss) income | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Issuance of common stock for cash | ||||||||||||||||||||||||||||
| Acquiring additional shares from shareholder of Anhui Ansheng Petrochemical Equipment Co., Ltd. | - | - | ( | ) | - | - | ( | ) | ( | ) | ||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||
| Balance, March 31, 2022 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
See Accompanying Notes to the Financial Statements
F-4
Planet Green Holdings Corp.
Unaudited Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2022 and 2021
(Stated in US Dollars)
| March 31, | March 31, | |||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPFRATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to cash (used in) provided by operating activities: | ||||||||
| Acquisition of subsidiaries | ( |
) | ||||||
| Depreciation | ||||||||
| Amortization | ||||||||
| Amortization of operating lease right-of-use assets | ||||||||
| Bad debt expenses | ||||||||
| Impairment of equipment | - | |||||||
| Account receivables,net | ( |
) | ||||||
| Inventories | ( |
) | ( |
) | ||||
| Prepayments and deposit | ( |
) | ( |
) | ||||
| Other receivables | ( |
) | - | |||||
| Accounts payables | - | |||||||
| Advance from customer | - | |||||||
| Other payables and accruals | ( |
) | ||||||
| Taxes payable | - | |||||||
| Deferred income | ( |
) | - | |||||
| Lease liability | - | |||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of plant and equipment | ( |
) | ( |
) | ||||
| Purchase of intangible assets | ( |
) | ( |
) | ||||
| Net cash used in investing activities | ( |
) | ( |
) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Payments of short-term loan - bank | ( |
) | - | |||||
| Changes in related party balances, net | ( |
) | ||||||
| Proceeds from issuance of common stock | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( |
) | ||||||
| EFFECT OF EXCHANGE RATE ON CASH | ( |
) | ||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | ||||||||
| CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | $ | ||||||
| SUPPLEMENTARY OF CASH FLOW INFORMATION | ||||||||
| Interest received | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| NON-CASH TRANSACTIONS | ||||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Issuance of shares for acquisition | $ | $ | ||||||
| Issuance of common stock for employee compensation | $ | $ | ||||||
See Accompanying Notes to the Financial Statements
F-5
PLANET GREEN HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2022 AND DECEMBER 31, 2021
(Stated in US Dollars)
1. Organization and Principal Activities
Planet Green Holdings Corp. (the “Company” or “PLAG”) is a holding company incorporated in Nevada. We are engaged in various businesses through our subsidiaries and controlled entities in China.
Going Concern
The accompanying unaudited condensed consolidated
financial statements have been prepared assuming that the Company will continue as a going concern; however, the Company has incurred
a net loss of $
These factors raise substantial doubt on the Company’s ability to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plan for the Company’s continued existence is dependent upon management’s ability to execute the business plan, develop the plan to generate profit; additionally, Management may need to continue to rely on private placements or certain related parties to provide funding for investment, for working capital and general corporate purposes. If management is unable to execute its plan, the Company may become insolvent.
2. Summary of Significant Accounting Policies
Method of Accounting
Management has prepared the accompanying financial statements and these notes according to generally accepted accounting principles in the United States (“GAAP”). The Company maintains its general ledger and journals with the accrual method accounting.
Principles of Consolidation
The accompanying consolidated financial statements reflect the activities of Planet Green Holdings Corp. and each of the following entities:
| Place of | Attributable equity |
Registered | ||||||||
| Name of Company | incorporation | interest % | capital | |||||||
| Planet Green Holdings Corporation | $ | |||||||||
| Lucky Sky Planet Green Holdings Co., Limited (H.K.) | ||||||||||
| Jiayi Technologies (Xianning) Co., Ltd. | ||||||||||
| Fast Approach Inc. | ||||||||||
| Shanghai Shuning Advertising Co., Ltd. (a subsidiary of FAST) | - | |||||||||
| Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. | ||||||||||
| Xianning Bozhuang Tea Products Co., Ltd. | ||||||||||
| Jilin Chuangyuan Chemical Co., Ltd. | ||||||||||
| Anhui Ansheng Petrochemical Equipment Co., Ltd. | ||||||||||
| Shine Chemical Co., Ltd. | ||||||||||
| Bless Chemical Co., Ltd. (a subsidiary of Shine Chemical) | ||||||||||
| Hubei Bryce Technology Co., Ltd. (a subsidiary of Bless Chemical) | ||||||||||
| Shandong Yunchu Supply Chain Co., Ltd. | ||||||||||
Management has eliminated all significant inter-company balances and transactions in preparing the accompanying consolidated financial statements. Ownership interests of subsidiaries that the Company does not wholly own are accounted for as non-controlling interests.
F-6
On May 29, 2020, the Planet Green Holdings Corporation (BVI) incorporated Lucky Sky Planet Green Holdings Co., Limited, a limited company incorporated in Hong Kong.
On June 5, 2020, the Planet Green Holdings Corporation (BVI) acquired all of the outstanding equity interests of Fast Approach Inc. It was incorporated under Canada’s laws and the operation of a demand-side platform targeting the Chinese education market in North America.
On June 16, 2020, Lucky Sky Holdings Corporations
(H.K.) transferred its
On December 9, 2020, Lucky Sky Petrochemical Technology (Xianning) Co., Ltd. changed its name to Jiayi Technologies (Xianning) Co., Ltd.
On January 6, 2021, Planet Green Holdings Corporation
(Nevada) issued an aggregate of
On March 9, 2021, Planet Green Holdings Corporation (Nevada) issued
an aggregate of
On August 1, 2021, Jiayi Technologies (Xianning)
Co., Ltd has terminated the VIE agreements with Xianning Bozhuang Tea Products Co., Ltd and acquired
On August 3, 2021, the Planet Green Holding Corp
has acquired
On September 1st, 2021, Jingshan Sanhe Luckysky
New Energy Technologies Co., Ltd. has changed its major shareholder from Mr. Feng Chao to Hubei Bryce Technology Co., Ltd. and Hubei Bryce
Technology Co., Ltd. has hold
On December 9, 2021, Planet
Green Holdings Corporation (Nevada) issued an aggregate of
F-7
Consolidation of Variable Interest Entity
On March 9, 2021, through Jiayi Technologies (Xianning) Co., Ltd., formerly known as Lucky Sky Petrochemical Technology (Xianning) Co., Ltd., the Company entered into exclusive VIE agreements (“VIE Agreements”) with Jilin Chuangyuan Chemical Co., Ltd., as well as their shareholders, which give the Company the ability to substantially influence those companies’ daily operations and financial affairs and appoint their senior executives. The Company is considered the primary beneficiary of these operating companies, and it consolidates their accounts as VIEs.
On July 15, through Jiayi Technologies (Xianning) Co., Ltd., formerly known as Lucky Sky Petrochemical Technology (Xianning) Co., Ltd., the Company entered into exclusive VIE agreements (“VIE Agreements”) with Anhui Ansheng Petrochemical Equipment Co., Ltd, as well as their shareholders, which give the Company the ability to substantially influence those companies’ daily operations and financial affairs and appoint their senior executives. The Company is considered the primary beneficiary of these operating companies, and it consolidates their accounts as VIEs.
On August 1, 2021, Jiayi Technologies (Xianning) Co., Ltd. has terminated the VIE agreements with Xianning Bozhuang Tea Products Co., Ltd.
On February 11, 2022,
F-8
Each of the VIE Agreements is described in detail below
Consultation and Service Agreement
Under the Consultation and Service Agreement,
WFOE has the exclusive right to provide consultation and services to the operating entities in China in business management, human resource,
technology, and intellectual property rights. WFOE exclusively owns any intellectual property rights arising from the performance of this
Consultation and Service Agreement. The number of service fees and payment terms can be amended by the WFOE and operating companies’
consultation and implementation. The duration of the Consultation and Service Agreement is
Business Cooperation Agreement
Pursuant to the Business Cooperation Agreement, WFOE has the exclusive right to provide complete technical support, business support, and related consulting services, including but not limited to specialized services, business consultations, equipment or property leasing, marketing consultancy, system integration, product research and development, and system maintenance. WFOE exclusively owns any intellectual property rights arising from the performance of this Business Cooperation Agreement. The rate of service fees may be adjusted based on the services rendered by WFOE in that month and the operational needs of the operating entities. The Business Cooperation Agreement shall maintain effective unless it was terminated or was compelled to release under applicable PRC laws and regulations. WFOE may terminate this Business Cooperation Agreement at any time by giving 30 day’s prior written notice.
Equity Pledge Agreements
According to the Equity Pledge Agreements among WFOE, operating entities, and each of operating entities’ shareholders, shareholders of the operating entities pledge all of their equity interests in the functional entities to WFOE to guarantee their performance of relevant obligations and indebtedness under the Technical Consultation and Service Agreement and other control agreements. Besides, shareholders of the operating entities are in the process of registering the equity pledge with the competent local authority.
F-9
Equity Option Agreements
According to the Equity Option Agreements, WFOE has the exclusive right to require each shareholder of the operating companies to fulfill and complete all approval and registration procedures required under PRC laws for WFOE to purchase or designate one or more persons to buy, each shareholder’s equity interests in the operating companies, once or at multiple times at any time in part or in whole at WFOE’s sole and absolute discretion. The purchase price shall be the lowest price allowed by PRC laws. The Equity Option Agreements shall remain effective until all the equity interest owned by each operating entity shareholder has been legally transferred to WFOE or its designee(s).
Voting Rights Proxy Agreements
According to the Voting Rights Proxy Agreements, each shareholder irrevocably appointed WFOE or WFOE’s designee to exercise all his or her rights as the shareholders of the operating entities under the Articles of Association of each operating entity, including but not limited to the power to exercise all shareholder’s voting rights concerning all matters to be discussed and voted in the shareholders’ meeting. The term of each Voting Rights Proxy Agreement is 20 years. WOFE has the right to extend each Voting Proxy Agreement by giving written notification.
Based on the foregoing contractual arrangements, The Company consolidates the accounts of Anhui Ansheng Petrochemical Equipment Co., Ltd and Jilin Chuangyuan Chemical Co., Ltd. in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting Standards Codification (“ASC”) 810-10, Consolidation.
Use of Estimates
The financial statements preparation requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available when the calculations are made; however, actual results could differ materially from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Investment Securities
The Company classifies securities it holds for investment purposes into trading or available-for-sale. Trading securities are bought and held principally for the purpose of selling them in the near term. All deposits not included in trading securities are classified as available for sale.
Trading and available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on trading securities are included in the net income. Unrealized holding gains and losses, net of the related tax effect, on available for sale securities are excluded from net income. They are reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis.
A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in carrying amount to fair value. The impairment is charged as an expense to the statement of income and comprehensive income, and a new cost basis for the security is established. To determine whether the impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and believes whether evidence indicating the cost of the asset is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value after year-end, and forecasted performance of the investee.
Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective-interest method. Dividend and interest income are recognized when earned.
F-10
Accounts Receivables
Accounts receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when the collection of the total amount is no longer probable. Bad debts are written off as incurred.
Inventories
Inventories consist of raw materials and finished goods, stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, inbound shipping costs, and allocated overhead. The Company applies the weighted average cost method to its inventory.
Advances and Prepayments to Suppliers
The Company makes an advance payment to suppliers and vendors for the procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers, the applicable amount is reclassified from advances and prepayments to suppliers to inventory.
Plant and Equipment
Plant and equipment are carried at cost less
accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. The Company typically
applies a salvage value of
| Buildings | ||||
| Landscaping, plant, and tree | ||||
| Machinery and equipment | ||||
| Motor vehicles | ||||
| Office equipment |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the Company’s results of operations. The costs of maintenance and repairs are recognized as incurred; significant renewals and betterments are capitalized.
Intangible Assets
Intangible assets are carried at cost less accumulated amortization. Amortization is provided over their useful lives, using the straight-line method. The estimated useful lives of the intangible assets are as follows:
| Land use rights | ||||
| Software licenses | ||||
| Trademarks |
F-11
Construction in Progress and Prepayments for Equipment
Construction in progress and prepayments for equipment represent direct and indirect acquisition and construction costs for plants and fees of purchase and installation of related equipment. Amounts classified as construction in progress and prepayments for equipment are transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Depreciation is not provided for assets classified in this account.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. The Company conducts an annual assessment of its goodwill for impairment. If the carrying value of its goodwill exceeds its fair value, then impairment has been incurred; accordingly, a charge to the Company’s operations results will be recognized during the period. Impairment losses on goodwill are not reversed. Fair value is generally determined using a discounted expected future cash flow analysis.
Accounting for the Impairment of Long-lived Assets
The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may become obsolete from a difference in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate adequate profits. Impairment is present if the carrying amount of an asset is less than its expected future undiscounted cash flows.
If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported lower the carrying amount or fair value fewer costs to selling.
Statutory Reserves
Statutory reserves refer to the amount appropriated
from the net income following laws or regulations, which can be used to recover losses and increase capital, as approved, and are to
be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve,
on an annual basis, an amount equal to
Foreign Currency Translation
The accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). The Company’s assets and liabilities are translated into United States dollars from RMB at year-end exchange rates. Its revenues and expenses are translated at the average exchange rate during the period. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.
| 03/31/2022 | 12/31/2021 | 03/31/2021 | ||||||||||
| Period-end US$: CAD$ exchange rate | ||||||||||||
| Period-end US$: RMB exchange rate | ||||||||||||
| Period-end US$: HK$ exchange rate | ||||||||||||
| Period average US$: CAD$ exchange rate | ||||||||||||
| Period average US$: RMB exchange rate | ||||||||||||
| Period average US$: HK$ exchange rate | ||||||||||||
The RMB is not freely convertible into foreign currencies, and all foreign exchange transactions must be conducted through authorized financial institutions.
F-12
Revenue Recognition
The Company adopted ASC 606 “Revenue Recognition.” It recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
The Company derives its revenues from selling explosion-proof skid-mounted refueling device, SF double-layer buried oil storage tank, high-grade synthetic fuel products, industrial formaldehyde solution, urea-formaldehyde pre-condensate (UFC), methylal, urea-formaldehyde glue for environment-friendly artificial board chemicals, food products like frozen fruits, beef & mutton products and vegetables and tea products. The Company applies the following five steps to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
| ● | identify the contract with a customer; |
| ● | identify the performance obligations in the contract; |
| ● | determine the transaction price; |
| ● | allocate the transaction price to performance obligations in the contract; and; |
| ● | Recognize revenue as the performance obligation is satisfied. |
Advertising
All advertising costs are expensed as incurred.
Shipping and Handling
All outbound shipping and handling costs are expensed as incurred.
Research and Development
All research and development costs are expensed as incurred.
Retirement Benefits
Retirement benefits in the form of mandatory government-sponsored defined contribution plans are charged to either expense as incurred or allocated to inventory as part of overhead.
Stock-Based Compensation
The Company records stock compensation expense for employees at fair value on the grant date and recognizes the expense one time because there is no employee’s requisite service period requirement.
Income Taxes
The Company accounts for income tax using an asset and liability approach and recognizes deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets. If it is more likely than not, these items will either expire before the Company can realize their benefits or uncertain future realization.
Comprehensive Income
The Company uses Financial Accounting Standards Board (“FASB”) ASC Topic 220, “Reporting Comprehensive Income.” Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders.
F-13
Earnings Per Share
The Company computes earnings per share (“EPS”) following ASC Topic 260, “Earnings per share.” Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive impacts of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warranties are computed using the treasury stock method. Potentially anti-dilutive securities (i.e., those that increase income per share or decrease loss per share) are excluded from diluted EPS calculation.
Financial Instruments
The Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities, and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosing the Company’s fair value of financial instruments. ASC Topic 825, “Financial Instruments,” defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities qualify as financial instruments and are a reasonable estimate of their fair values because of the short period between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:
| ● | Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets. |
| ● | Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and information that are observable for the asset or liability, either directly or indirectly, for substantially the financial instrument’s full term. |
| ● | Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.
Lease
Effective December 31, 2018, Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. adopted ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that do not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component.
Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term.
The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and it includes the associated operating lease payments in the undiscounted future pre-tax cash flows.
As of March 31, 2022, there were approximately
$
F-14
Commitments and Contingencies
From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The majority of these claims and proceedings related to or arise from commercial disputes. The Company first determine whether a loss from a claim is probable, and if it is reasonable to estimate the potential loss. The Company accrues costs associated with these matters when they become probable, and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Also, the Company disclose a range of possible losses, if a loss from a claim is probable but the amount of loss cannot be reasonably estimated, which is in line with the applicable requirements of Accounting Standard Codification 450. The Company’s management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows.
Recent Accounting Pronouncements
In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued, and (2) for all other entities for reporting periods for which financial statements have not however been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU would affect the Company’s financial statements.
In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which makes several changes meant to add, modify or remove specific disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. The amendments in this Update modify the disclosure requirements on fair value measurements based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The modifications are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company does not believe the adoption of this ASU would have a material effect on the Company’s condensed financial statements.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s balance sheets, statements of income, and comprehensive income and statements of cash flows.
3. Variable Interest Entity (“VIE”)
A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. If any, the variable interest holder with a controlling financial interest in a VIE is deemed the primary beneficiary and must consolidate the VIE. PLAG WOFE is deemed to have the controlling financial interest and be the primary beneficiary of Anhui Ansheng Petrochemical Equipment Co., Ltd. and Jilin Chuangyuan Chemical Co., Ltd. because it has both of the following characteristics:
1) The power to direct activities at Anhui Ansheng Petrochemical Equipment Co., Ltd. and Jilin Chuangyuan Chemical Co., Ltd. that most significantly impact such entity’s economic performance, and
2) The obligation to absorb losses and the right to receive benefits from Anhui Ansheng Petrochemical Equipment Co., Ltd and Jilin Chuangyuan Chemical Co., Ltd. that could potentially be significant to such entity. Under the Contractual Arrangements, Anhui Ansheng Petrochemical Equipment Co., Ltd and Jilin Chuangyuan Chemical Co., Ltd. pay service fees equal to all of its net income to PLAG WFOE. At the same time, PLAG WFOE is obligated to absorb all of the Anhui Ansheng Petrochemical Equipment Co., Ltd.’s and Jilin Chuangyuan Chemical Co., Ltd.’s losses. The Contractual Arrangements are designed to operate Anhui Ansheng Petrochemical Equipment Co., Ltd and Jilin Chuangyuan Chemical Co., Ltd. for the benefit of PLAG WFOE and ultimately, the Company. Accordingly, the accounts of Anhui Ansheng Petrochemical Equipment Co., Ltd and Jilin Chuangyuan Chemical Co., Ltd. are consolidated in the accompanying consolidated financial statements. In addition, those financial positions and results of operations are included in the Company’s consolidated financial statements.
F-15
The carrying amount of VIE’s consolidated assets and liabilities are as follows：
| 03/31/2022 | 12/31/2021 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Advances to suppliers | ||||||||
| Other receivables | ||||||||
| Inter company Receivable | ||||||||
| Other receivables-related parties | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Plant and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Construction in progress, net | ||||||||
| Deferred tax assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Short-term bank loans | ||||||||
| Accounts payable | ||||||||
| Advance from customers | ||||||||
| Taxes payable | ||||||||
| Other payables and accrued liabilities | ||||||||
| Intercompany Payable | ||||||||
| Other payables-related parties | ||||||||
| Long term payable-current portion | - | |||||||
| Deferred income | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Long-term payables | ||||||||
| Total non-current liabilities | ||||||||
| Total Liabilities | $ | $ | ||||||
| Paid-in capital | ||||||||
| Statutory Reserve | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
F-16
The summarized operating results of the VIE’s are as follows:
| 03/31/2022 | 03/31/2021 | |||||||
| Operating revenues | $ | $ | ||||||
| Gross profit | ||||||||
| Income (loss) from operations | ( | ) | ( | ) | ||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | ||
4. Restricted Cash
As of March 31, 2022 and 2021, the balance of
restricted cash was $
5. Account Receivable, Net
The Company extends credit terms of 15 to 60 days to the majority of its domestic customers, which include third-party distributors, supermarkets, and wholesalers
| 03/31/2022 | 12/31/2021 | |||||||
| Trade accounts receivable | $ | $ | ||||||
| Less: Allowance for doubtful accounts | ( | ) | ( | ) | ||||
| $ | $ | |||||||
| Allowance for doubtful accounts | ||||||||
| Beginning balance: | ( | ) | ( | ) | ||||
| Additions to allowance | ( | ) | ( | ) | ||||
| Bad debt written-off | ||||||||
| Ending balance | $ | ( | ) | $ | ( | ) | ||
6. Advances and Prepayments to Suppliers
Prepayments include advance payment to suppliers and vendors to procure raw materials. Prepayments consist of the following:
| 03/31/2022 | 12/31/2021 | |||||||
| Payment to suppliers and vendors | $ | $ | ||||||
7. Inventories
Inventories consisted of the following as of March 31, 2022 and December 31, 2021
| 03/31/2022 | 12/31/2021 | |||||||
| Raw materials | $ | $ | ||||||
| Inventory of supplies | ||||||||
| Work in progress | ||||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
F-17
8. Plant and Equipment
Plant and equipment consisted of the following as of March 31, 2022 and December 31, 2021:
| 03/31/2022 | 12/31/2021 | |||||||
| At Cost: | ||||||||
| Buildings | $ | $ | ||||||
| Machinery and equipment | ||||||||
| Office equipment | ||||||||
| Motor vehicles | ||||||||
| Less: Impairment | ( | ) | ( | ) | ||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Construction in progress | ||||||||
| $ | $ | |||||||
Depreciation expense for the three months ended March 31, 2022 and 2021 was $
9. Intangible Assets
| 03/31/2022 | 12/31/2021 | |||||||
| At Cost: | ||||||||
| Land use rights | ||||||||
| Software licenses | ||||||||
| Trademark | ||||||||
| $ | $ | |||||||
| Less: Accumulated amortization | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Amortization expense for the three months
ended March 31, 2022 and 2021 was $
10. Investments
As of March 31, 2022, The Company has paid approximately $
As of March 31, 2022, the Company has spent $
As of March 31, 2022, the company paid $
11. Other Payable
As of March 31, 2022 and December 31, 2021, the
balance of other payable was $
F-18
12. Related Parties Transaction
As of March 31, 2022 and December 31, 2021, the
outstanding balance due from related parties was $
The outstanding balance of $
The outstanding balance of $
The outstanding balance of $
The outstanding balance of $
These above nontrade receivables arising from transactions between the Company and certain related parties, such as loans to these related parties. These loans are unsecured, non-interest bearing and due on demand.
As of March 31, 2022 and December 31, 2021, the
outstanding balance due to related parties was $
The outstanding balance of $
The outstanding balance of $
The outstanding balance of $
The outstanding balance of $
The outstanding balance of $
The outstanding balance of $
The balance was advanced for working capital of the Company, non-interest bearing, and unsecured unless further disclosed.
F-19
13. Goodwill
The changes in the carrying amount of goodwill by reportable segment are as follows:
| Ansheng | Fast | JSSH | JLCY | SDYC | ||||||||||||||||
| Balance as of December 31, 2020 | ||||||||||||||||||||
| Goodwill acquired through acquisition | $ | |||||||||||||||||||
| Goodwill impairment | ( | ) | ( | ) | ||||||||||||||||
| Balance as of December 31, 2021 | $ | |||||||||||||||||||
| Goodwill acquired through acquisition | ||||||||||||||||||||
| Goodwill impairment | ||||||||||||||||||||
| Balance as of March 31, 2022 | $ | |||||||||||||||||||
The goodwill related to the acquisition of Fast Approach was impaired as the result of actual financial performance being less than that originally forecasted and estimates of future cash flows are at the time of this report, are expected to be less than previously estimated. The global COVID 19 pandemic was a significant macroeconomic factor that contributed to the downward revisions of previous estimation and forecasts; accordingly, after management considered different factors including COVID 19 and performed an analysis by discounting future cash flows, it determined that the fair value of the Fast unit was less than the carrying value; therefore, the Company recorded impairment of goodwill to reflect the difference between fair value and the then previously unimpaired carrying value. Management will continue to monitor for additional deterioration of cash flows.
Goodwill related to JSSH was written off in its entirety as the unit experienced operating losses in the years ended December 31, 2021 and 2020, and based on past performance as guidance for future performance, management determined that discounted expected future cash flows and profitability from the unit were enough to support the carrying value for synergies that were expected to be realized when the Company originally acquired the unit.
14. Bank Loans
The outstanding balances on short-term bank loans consisted of the following:
| Weighted Average | ||||||||||||||||
| Lender | Maturities | interest rate | 03/31/2022 | 12/31/2021 | ||||||||||||
| Rural Credit Cooperatives of Jilin Province, Jilin Branch | % | |||||||||||||||
| Loan from Anhui Langxi Rural Commercial Bank Of China | % | |||||||||||||||
Buildings and land use rights in the amount of
$
The loan from Anhui Langxi Rural Commercial Bank of China, Ansheng Branch was credit line obtained for general working capital. As of March 31, 2022, the loan was overdue and the Company proposed to extend maturities on this loan. During the subsequent period, the Company is negotiating a loan extension with its banks and it is probable that the bank routinely keeps rolling over debt to keep the Company’s liquidity.
Anhui Langxi Rural Commercial Bank’s bank
loan has been guaranteed by Anhui Langxi Small and Medium Enterprise Financing Guarantee Co., Ltd. to which Ansheng branch provides the
plant with book value of $
F-20
15. Advance from Customers
The proceeds which are received in advance of
the delivery of goods pursuant to applicable contracts, are initially recorded as advance from customer. As of March 31, 2022 and December
31, 2021, the balance of advance from customers was approximately $
16. Equity
On May 9, 2019, the Company and its wholly owned
subsidiary Shanghai Xunyang Internet Technology Co., Ltd. (“Subsidiary”) entered into a Share Exchange Agreement with Xianning
Bozhuang Tea Products Co., Ltd. (“Target”) and each of the shareholders of Target (collectively, “Sellers”).
Such transaction closed on May 14, 2019. Under the Share Exchange Agreement, the Subsidiary acquired all outstanding equity interests
of Target, a company that produces tea products and sells such products in China. Pursuant to the Share Exchange Agreement, the Company
issued an aggregate of
On June 17, 2019, the Company entered into a
securities purchase agreement, under which five individuals residing in the PRC agreed to purchase an aggregate of
On February 10, 2020, the Company entered into
a securities purchase agreement with Mengru Xu and Zhichao Du, according to which Ms. Xu and Mr. Du agreed to invest an aggregate of
$
On June 5, 2020, the Company issued an aggregate
of
On December 30, 2020, the Company issued a total
of
On January 4, 2021, the Company issued an aggregate
of
F-21
On January 26, 2021, the Company entered into
a Securities Purchase Agreement, pursuant to which three individuals residing in the People’s Republic of China agreed to purchase
an aggregate of
On March 9, 2021, the Company issued an aggregate
of
On April 26, 2021, the Company has entered into
a Share Purchase Agreement with three investors, Pursuant to the agreement, the Company will receive gross proceeds of $
On July 15, 2021, the Company has issued an aggregate
of
On July 30, 2021, the Company issued a total of
On December 30, 2021, The Company issued an aggregate
of
On January 13, 2022, the Company entered into a Securities Purchase
Agreement, pursuant to which three individuals residing in the People’s Republic of China agreed to purchase an aggregate of
As of March 31, 2022, there were
F-22
17. Income Taxes
All of the Company’s continuing operations are
located in the PRC. The corporate income tax rate in the PRC is
The following tables provide the reconciliation of the differences between the statutory and effective tax expenses for the three months ended March 31, 2022 and 2021:
| 03/31/2022 | 03/31/2021 | |||||||
| Loss attributed to PRC operations | $ | ( | ) | $ | ( | ) | ||
| Loss attributed to U.S. operations | ( | ) | - | |||||
| Loss attributed to Canada operations | ( | ) | - | |||||
| Income attributed to BVI | - | |||||||
| Loss before tax | $ | ( | ) | $ | ( | ) | ||
| PRC Statutory Tax at 25% Rate | ( | ) | - | |||||
| Effect of tax exemption granted | ||||||||
| Valuation allowance | - | |||||||
| Income tax | $ | $ | ||||||
| Per Share Effect of Tax Exemption | ||||||||
| Effect of tax exemption granted | $ | $ | ||||||
| Weighted-Average Shares Outstanding Basic | ||||||||
| Per share effect | $ | $ | ||||||
The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows as of March 31, 2022 and 2021:
| 03/31/2022 | 03/31/2021 | |||||||
| U.S. federal statutory income tax rate | % | % | ||||||
| Higher (lower) rates in PRC, net | % | % | ||||||
| Non-recognized deferred tax benefits in the PRC | ( | )% | ( | )% | ||||
| The Company’s effective tax rate | ( | )% | % | |||||
18. Earnings/(Loss) Per Share
Components of basic and diluted earnings per share were as follows:
| For the three months ended | ||||||||
| March 31, | ||||||||
| 2022 | 2021 | |||||||
| Loss from operations attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted (loss) earnings per share denominator: | ||||||||
| Original Shares at the beginning: | ||||||||
| Additions from Actual Events -issuance of common stock for cash | ||||||||
| Additions from Actual Events – issuance of common stock for acquisition | - | |||||||
| Additions from Actual Events – issuance of common stock for stock compensation | - | |||||||
| Basic Weighted Average Shares Outstanding | ||||||||
| (Loss) income per share attributable to common shareholders - Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted weighted average shares outstanding | ||||||||
F-23
19. Concentrations
Customers Concentrations:
The following table sets forth information about
each customer that accounted for
| For the periods ended | ||||||||||||||||
| 31-Mar-22 | 31-Mar-21 | |||||||||||||||
| Customers | Amount $ | % | Amount $ | % | ||||||||||||
| A | ||||||||||||||||
| B | ||||||||||||||||
| C | ||||||||||||||||
| D | ||||||||||||||||
Suppliers Concentrations
The following table sets forth information about
each supplier that accounted for
| For the years ended | ||||||||||||||||
| 31-Mar-22 | 31-Mar-21 | |||||||||||||||
| Suppliers | Amount $ | % | Amount $ | % | ||||||||||||
| A | ||||||||||||||||
| B | ||||||||||||||||
| C | ||||||||||||||||
20. Lease commitment
Effective December 31, 2018, the Company adopted ASU 2016-02, “Leases” (Topic 842), and elected the package of practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. The Company adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component.
The Company had a land, facilities and factory lease agreement with a 5-year lease term starting in April 2018 until April 2023. Upon adoption of ASU 2016-02, the Company recognized lease liabilities of approximately $0.82 million, with corresponding Right-of-Use (ROU) assets of the same amount based on the present value of the future minimum rental payments of the new lease, using an effective interest rate of 4.75%, which is determined using an incremental borrowing rate.
The weighted average remaining lease term of its existing leases is
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
For the three months ended March 31, 2022 and 2021, rent expenses
amounted to $
F-24
The five-year maturity of the Company’s lease obligations is presented below:
| Twelve months ended December 31, | Operating lease amount | |||
| 2022 | ||||
| 2023 | ||||
| Total lease payment | ||||
| Less: interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
21. Risks
| A. | Credit risk |
| The Company’s deposits are made with banks located in the PRC. They do not carry federal deposit insurance and may be subject to loss of the banks become insolvent. | |
| Since the Company’s inception, the age of account receivables has been less than one year, indicating that the Company is subject to the minimal risk borne from credit extended to customers. | |
| B. | Interest risk |
| The Company is subject to interest rate risk when short-term loans become due and require refinancing. | |
| C. | Economic and political risks |
| The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC. |
22. Segment Reporting
The Company follows ASC 280, Segment Reporting, which requires that companies disclose segment data based on how management makes the decision about allocating resources to segments and evaluating their performance. The Company’s management assesses performance and determines resource allocations based on several factors, the primary measure being income from operations.
F-25
The Company’s primary business segment and operations are Shandong Yunchu, Jingshan Sanhe, Anhui Ansheng, Jilin Chuangyuan, Xianning Bozhuang and Fast Approach. The Company’s consolidated operations and consolidated financial position from continuing operations are almost all attributable to Shandong Yunchu, Jingshan Sanhe, Anhui Ansheng, Jilin Chuangyuan, Xianning Bozhuang and Fast Approach. Accordingly, management believes that the consolidated balance sheets and statement of operations provide the relevant information to assess Shandong Yunchu, Jingshan Sanhe, Anhui Ansheng, Jilin Chuangyuan, Xianning Bozhuang and Fast Approach’s performance.
| Segment reporting | 03/31/2022 | 12/31/2021 | ||||||
| Fast Approach and Shanghai Shuning | $ | $ | ||||||
| Xianning Bozhuang | ||||||||
| Jingshan Sanhe | ||||||||
| Anhui Ansheng | ||||||||
| Jilin Chuangyuan | ||||||||
| Jiayi Technologies (Xianning) Co., Ltd. | ||||||||
| Shandong Yunchu | ||||||||
| Planet Green Holdings Corporation | ||||||||
| Lucky Sky Planet Green Holdings Co., Limited (H.K.). | ||||||||
| Total Assets | $ | $ | ||||||
23. Contingencies
From time to time, the Company is a party to various
legal actions arising in the ordinary course of business. In November 2021, the claim occurred between Ansheng and Beijing Aerospace Star
Technology Co., Ltd. due to the dispute over the commercial contracts. On November 16, 2021, Beijing Aerospace Star Technology Co., Ltd.
applied for pre-litigation custody of property preservation with the local people’s Court of Langxi County, freezing Ansheng’s
available cash of $
As of March 31, 2022, the loan from Anhui Langxi Rural Commercial Bank of China was overdue and the Company proposed to extend maturities on this loan. During the subsequent period, the Company is negotiating a loan extension with its banks and it is probable that the bank routinely keeps rolling over debt to keep the Company’s liquidity.
The Plaintiff (Wuxi Suxin Natural Gas Utilization Co., Ltd.) sued for
that the defendants (Anhui Xuanneng Natural Gas Energy Equipment Co., Ltd, Anhui Ansheng Petrochemical Equipment Co., Ltd and other related
individuals) have damaged the interest of creditors and the defendant should restitute the plaintiff’s mortgage loan principal as
well as the interest. The case has now been transferred to the Changfeng County Court of Anhui Province for processing. Meanwhile, due
to the impact of this case, Ansheng Company’s available cash of $
24. Subsequent Events
The Company has assessed all events from March 31, 2022 up through May 13, 2022, which is the date that these unaudited condensed consolidated financial statements are available to be issued, unless as disclosed below, there are not any material subsequent events that require disclosure in these unaudited condensed consolidated financial statements.
On April 8, 2022, Planet Green Holdings Corp
and Jiayi Technologies (Xianning) Co., Ltd., a subsidiary of the Company, entered into a Share Exchange Agreement with Allinyson Ltd.,
and each of shareholders of the Allinyson Ltd., pursuant to which, among other things and subject to the terms and conditions contained
therein, the Subsidiary agreed to effect an acquisition of the Allinyson Ltd. by acquiring from the Sellers
F-26
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW
We are headquartered in Gaithersburg, MD. After a series of acquisitions and dispositions during the past two years, our primary business, which is carried out by Shandong Yunchu, Jingshan Sanhe, Jilin Chuangyuan, Anhui Ansheng, Fast Approach Inc and Xianning Bozhuang, is:
| ● | To sell black tea product cultivation, packaging, and sales; |
| ● | To sell high-grade synthetic fuel products |
| ● | To sell various food products, including chestnut, frozen fruits and vegetables, frozen French fries, and beef and mutton products. |
| ● | To sell formaldehyde, urea-formaldehyde glue, methylal, and clean fuel oil |
| ● | To sell the barrier and explosion-proof skid-mounted refueling devices, SF double-layer buried oil storage tank |
| ● | Multimedia design and online advertising services; |
Going Concern
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the Company has incurred a net loss of $1,261,439 for the three months ended March 31, 2022. As of March 31, 2022, the Company had an accumulated deficit of $95,302,160, a working capital deficit of $7,923,180; its net cash used in operating activities for the three months ended March 31, 2022 was $5,325,707.
The Company plans to continue its expansion and investments, which will require continued improvements in revenue, net income, and cash flows.
Results of Operations
The following discussion should be read in conjunction with the company’s audited consolidated financial statement for the three months ended March 31, 2022, and 2021 and related notes to that.
| Three months ended | Increase / | Increase / | ||||||||||||||
| March 31, | Decrease | Decrease | ||||||||||||||
| (In Thousands of USD) | 2022 | 2021 | ($) | (%) | ||||||||||||
| Net revenues | 11,979 | 2,236 | 9,743 | 436 | ||||||||||||
| Cost of revenues | 10,816 | 2,030 | 8,786 | 433 | ||||||||||||
| Gross profit | 1,163 | 206 | 957 | 465 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and marketing expenses | 451 | 225 | 226 | 101 | ||||||||||||
| General and administrative expenses | 1,803 | 1,562 | 241 | 15 | ||||||||||||
| Research & Developing expenses | 9 | - | 9 | N/A | ||||||||||||
| Operating income (loss) | (1,100 | ) | (1,581 | ) | 481 | (30 | ) | |||||||||
| Interest income (expense) | (157 | ) | 110 | (267 | ) | (243 | ) | |||||||||
| Other income (expense) | 85 | (20 | ) | 105 | (526 | ) | ||||||||||
| (Loss) income before tax | (1,172 | ) | (1,491 | ) | 319 | (21 | ) | |||||||||
| Income tax expense/(income) | (89 | ) | - | (89 | ) | N/A | ||||||||||
| Net (loss) income | (1,261 | ) | (1,491 | ) | 230 | (15 | ) | |||||||||
Net Revenues. Our net revenues for the three months ended March 31, 2022 amounted to $11.98 million, which represents an increase of approximately $9.74 million, or 436%, from $2.24 million for the three months ended March 31, 2021. This increase was attributable to the acquisition of certain subsidiaries and VIEs.
3
Cost of Revenues. During the three months ended March 31, 2022, we experienced an increase in cost of revenue of $8.79 million or 433%, in comparison to the three months ended March 31, 2021, from approximately $2.03 million to $10.82 million. This increase was mainly due to the acquisition of certain subsidiaries and VIEs.
Gross Profit. Our gross profit increased by $0.95 million, or 465% to $1.16 million for the three months ended March 31, 2022 from $0.21 million for the three months ended March 31, 2021. This increase was mainly due to the aforementioned reasons, attributable to the acquisition of certain subsidiaries and VIEs.
Operating Expenses
Selling and Marketing Expenses. Our selling and marketing expenses increased by $0.23 million, or 101%, to $0.45 million for the three months ended March 31, 2022 from $0.23 million for the three months ended March 31, 2021 This increase was mainly due to our effort to expand our business.
General and Administrative Expenses. We experienced an increase in general and administrative expense of $0.24 million from $1.56 million to approximately $1.80 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. This cost increase was mainly due to the rise in third party service fees.
Net Loss
Our net loss decreased by $0.23 million, or 15%, to a net loss of $1.26 million for the three months ended March 31, 2022 from $1.49 million in net loss for the three months ended March 31, 2021. This decrease was mainly due to our effort to expand our business.
Liquidity and Capital Resources
In assessing our liquidity, we monitor and analyze our cash-on-hand and operating and capital expenditure commitments. Our liquidity needs meet our working capital requirements, operating expenses, and capital expenditure obligations. In the reporting period in the fiscal period ended March 31, 2022, our primary sources of financing have been cash generated from operations and private placements.
As of March 31, 2022, we had cash and cash equivalents (including restricted cash) of $1.31 million compared to $1.13 million as of December 31, 2021. The debt to assets ratio was 41.10% and 40.41% as of March 31, 2022 and December 31, 2021, respectively. We expect to continue to finance our operations and working capital needs in 2022 from cash generated from operations and, if needed, private financings. Suppose available liquidity is insufficient to meet our operating and loan obligations as they come due. In that case, our plans include pursuing alternative financing arrangements or reducing expenditures as necessary to meet our cash requirements. However, there is no assurance that we will raise additional capital or reduce discretionary spending to provide liquidity if needed. We cannot be sure of the availability or terms of any alternative financing arrangements.
The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.
Cash Flows Data:
| For the three months ended March 31 | ||||||||
| (In thousands of U.S. dollars) | 2022 | 2021 | ||||||
| Net cash flows used in operating activities | (5,326 | ) | (9,686 | ) | ||||
| Net cash flows used in investing activities | (148 | ) | (169 | ) | ||||
| Net cash flows provided by financing activities | 5,545 | 8,384 | ||||||
Operating Activities
Net cash used in operating activities was $5.33 million and $9.69 million for the three months ended March 31, 2022 and 2021, respectively. The decrease in net cash used in operating activities was mainly due to a decrease of $4.19 million in accounts receivable and an increase of $1.17 million in advance from customers, an increase of $2.37 million in prepayment and deposit, an increase of $3.70 million in other payables and accruals.
Investing Activities
Net cash used in investing activities for the three months ended March 31, 2022 was $0.15 million, representing a decrease of $0.02 million in net cash used in investing activities from $0.17 million for the same period of 2021. This is mainly due to the reduction in investment in fixed assets.
4
Financing Activities
Net cash provided by financing activities for the three months ended March 31, 2022, was $5.55 million, representing a decrease of $2.84 million in net cash provided by financing activities from $8.38 million for the same period of 2021. This is mainly due to the repayment of related party loans, resulting in a change of approximately $2.96 million. Compared with the same period in 2021 and 2022, related party financing activity transactions resulted in net inflows of $1.63 million and net outflows of $1.33 million, respectively.
Critical Accounting Policies
The preparation of financial statements in conformity with the United States generally accepted accounting principles requires our management to make assumptions, estimates, and judgments that affect the amounts reported in the financial statements, including the notes to that, and related disclosures of commitments contingencies, if any.
We consider our critical accounting policies to require the more significant judgments and estimates in preparing financial statements, including those outlined in Note 2 to the financial statements included herein.
The Company has evaluated the timing and the impact of the guidance above on the financial statements.
As of March 31, 2022, there were no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company’s consolidated financial statements.
Off-Balance Sheet Arrangements
We do not have any off-balance arrangements.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
Item 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2022. Based upon his evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective.
As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
5
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Risk Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the Company’s registration statement on Form S3/A as filed with the SEC on April 25, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Company’s registration statement Form S3/A as filed with the SEC on April 25, 2022.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 13, 2022, the Company entered into a Securities Purchase Agreement, pursuant to which three individuals residing in the People’s Republic of China agreed to purchase an aggregate of 7,000,000 shares of the Company’s common stock, par value $0.001 per share, for an aggregate purchase price of $7,000,000, representing a purchase price of $1.00 per Share. On January 14, 2022, the Company closed securities purchase the transaction. At the closing, the Company received gross proceeds of $7,000,000 in the aggregate, in exchange for the issuance of Company’s common stock. Such securities were issued in connection with our organization pursuant to exemption from registration contained in section 4(a)(2) of the Securities Act. The investors are accredited investor for purposes of Rule 501 of Regulation D.
On April 8, 2022, the Company entered into a Share Exchange Agreement with Allinyson Ltd. (“Target”), and each of shareholders of the Target (collectively, the “Sellers”), pursuant to which, among other things and subject to the terms and conditions contained therein, the Company agreed to effect an acquisition of the Target by acquiring from the Sellers 100% of the ordinary shares issued and outstanding of the Target (the “Acquisition”). Pursuant to the Share Exchange Agreement, in exchange for the acquisition of 100% of the ordinary shares issued and outstanding of the Target, the Company issued an aggregate of 7,500,000 shares of common stock, par value $0.001 per share, of the Company to the Sellers. The Acquisition was closed on April 18, 2022. Upon the closing of the transaction, the Company acquired 100% shares issued and outstanding ordinary shares of the Target and the Company issued 7,500,000 shares of common stock to the Sellers. Such securities were issued in connection with our organization pursuant to exemption from registration contained in section 4(a)(2) of the Securities Act. The Sellers are accredited investor for purposes of Rule 501 of Regulation D.
Use of Proceeds
We intend to use the proceeds from the private placement transaction as working capital for the operation of our subsidiaries and VIEs.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
6
ITEM 6. EXHIBITS
The following exhibits are filed as part of this report.
| * | Filed herewith. |
| ** | Furnished herewith. |
7
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PLANET GREEN HOLDINGS CORP. | ||
| Date: May 13, 2022 | By: | /s/ Bin Zhou |
| Bin Zhou, Chief Executive Officer and Chairman (Principal Executive Officer) | ||
| Date: May 13, 2022 | By: | /s/ Lili Hu |
Lili Hu, Chief Financial Officer (Principal Financial and Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed by the following persons in the capacities and on the dates indicated.
8
Exhibit 31.1
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302
I, Bin Zhou, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Planet Green Holdings Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. [Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];
c. Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
| Date: May 13, 2022 | By: | /s/ Bin Zhou |
| Bin Zhou, Chief Executive Officer and Chairman (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATIONS OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302
I, Lili Hu, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Planet Green Holdings Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. [Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];
c. Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
| Date: May 13, 2022 | By: | /s/ Lili Hu |
|
Lili Hu, Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Planet Green Holdings Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
| Date: May 13, 2022 | By: | /s/ Bin Zhou |
| Bin Zhou, Chief Executive Officer and Chairman (Principal Executive Officer) |
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Planet Green Holdings Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to her knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
| Date: May 13, 2022 | By: | /s/ Lili Hu |
|
Lili Hu, Chief Financial Officer (Principal Financial and Accounting Officer) |
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.