UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X]
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:September 30, 2018March 31, 2019
[ ]
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No.001-34449
PLANET GREEN HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
Nevada | 87-0430320 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Suite 901, Building 6
No. 1678 Jinshajiang Road
Putuo District, Shanghai, China
(Address, including zip code, of principal executive offices)
(86) 21-3258 3578
(Registrant’s telephone number, including area code)
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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]☒ No [ ]☐
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).
Yes [X]☒ No [ ]☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)
Indicate by check mark whether the registrant is a large accelerated filer,company or an accelerated filer, a non-accelerated filer, or a smaller reportingemerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | Accelerated filer | Non-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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ]☐ No [X]☒
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common stock, par value $0.001 per share | PLAG | NYSE American |
The numbersnumber of outstanding shares outstanding of the issuer’s class of common stock as of September 30, 2018May 13, 2019 was 3,143,141.5,497,765.
FORM 10-QFor the Quarterly Period Ended September 30, 2018
TABLE OF CONTENTS
PAGE | |
PART I - FINANCIAL INFORMATION | |
ITEM 1 FINANCIAL STATEMENTS | |
ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 2 |
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | |
ITEM 4 CONTROLS AND PROCEDURES | 5 |
PART II - OTHER INFORMATION | |
ITEM 1 LEGAL PROCEEDINGS | |
ITEM 1A RISK FACTORS | |
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | |
ITEM 3 DEFAULTS UPON SENIOR SECURITIES | |
ITEM 4 MINE SAFETY DISCLOSURES . | |
ITEM 5 OTHER INFORMATION | |
ITEM 6 EXHIBITS | |
SIGNATURES | 8 |
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, 20172018 filed with the Securities and Exchange Commission.
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.
i
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.
i
Use of Certain Defined Terms
Except where the context otherwise requires and for the purposes of this report only:
1. “We,” “us” and “our” refer to ALN, and except where the context requires otherwise, our wholly-owned and majority-owned direct and indirect operating subsidiaries.
1. | “We,” “us” and “our” refer to PLAG, and except where the context requires otherwise, our wholly-owned subsidiaries and VIEs. |
2. | “Beijing Lorain” refers to Beijing Green Foodstuff Co., Ltd. |
3. | “China” and “PRC” refer to the People’s Republic of China (excluding Hong Kong and Macau). |
4. | “ILH” refers to International Lorain Holding, Inc., a Cayman Islands company that was a wholly-owned by PLAG until September 2018 and owns all the capital stock of Dongguan Green Foodstuff Co., Ltd. and Junan Hongrun Foodstuff Co., Ltd. |
5. | “Jianshi HK” refers to Jianshi Technology Holding Limited |
6. | “Luotian Lorain” refers to Luotian Green Foodstuff Co., Ltd. |
7. | “PLAG” refers to Planet Green Holdings Corp., a Nevada corporation. |
8. | “Taishan Muren” refers to Taishan Muren Agriculture Co. Ltd., a limited liability company registered in China. |
9. | “Shandong Lorain” refers to Shandong Green Foodstuff Co., Ltd. |
10. | “Shandong Greenpia” refers to Shandong Greenpia Foodstuff Co., Ltd. |
11. | “Shanghai Xunyang” refers to Shanghai Xunyang Internet Technology Co., Ltd. |
12. | “Shenzhen Lorain” refers to Lorain Food Stuff (Shenzhen) Co., Ltd. |
13. | “RMB” refers to Renminbi, the legal currency of China. |
14. | “U.S. dollar”, “$” and “US$” refer to the legal currency of the United States. |
15. | “VIE” refers to variable interest entity. |
2. “ALN” refers to, Planet Green Holdings Corp., a Nevada corporation (formerly known as Millennium Quest, Inc. and American Lorain Corporation).
3. “Athena” refers to Athena*, a limited liability company organized under the laws of France that is majority- owned by Junan Hongrun.
4. “ILH” refers to International Lorain Holding, Inc., a Cayman Islands company that is wholly - owned by ALN.
5. “Junan Hongrun” refers to Junan Hongrun Foodstuff Co., Ltd.
6. “Luotian Lorain***” refers to Luotian Lorain Co., Ltd.
7. “Beijing Lorain***” refers to Beijing Lorain Co., Ltd.
8. “Shandong Lorain” refers to Shandong Lorain Co., Ltd.
9. “Dongguan Lorain” refers to Dongguan Lorain Co., Ltd.
10. “Planet Green BVI” refers to Planet Green Holdings Corporation.
11. “Jianshi Technology” refers to Jianshi Technology Holding Limited.
12. “Shandong Greenpia***” refers to Shandong Greenpia Foodstuff Co., Ltd.
13. “Shenzhen Lorain**” refers to Lorain Foodstuff (Shenzhen) Co., Ltd.
14. “Shanghai Xunyang” refers to Shanghai Xunyang Internet Technology Co., Ltd.
15. “Taishan Muren***” refers to Taishan Muren Agriculture Co. Ltd.
16. “RMB” refers to Renminbi, the legal currency of China.
17. “U.S. dollar”, “$” and “US$” refer to the legal currency of the United States.
18. “China” and “PRC” refer to the People’s Republic of China (excluding Hong Kong and Macau).
*On August 8, 2015, the Company re-organized its French operations by merging the operations of Conserverie Minerve into its immediate parent and 100% shareholder Athena, and concurrently, Athena wound up and dissolved Conserverie Minerve. Athena subsequently changed its own legal name to Conservie Minerve to continue its business.
**On December 14, 2017, the Company formed Shenzhen Lorain as a limited company under the laws of the PRC. Through Shandong Greenpia, the Company entered into exclusive arrangements with Shenzhen Lorain and its shareholders that give the Company the ability to substantially influence Shenzhen Lorain’s daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of Shenzhen Lorain and it consolidates its accounts as a VIE. On September 27, 2018, the mentioned exclusive arrangement were terminated.
*** On September 27, 2018, through Shanghai Xunyang Internet Technology Co. Ltd., the Company entered into exclusive arrangements with Beijing Lorain Co., Ltd., Luotian Lorain Co., Ltd., Shandong Greenpia Foodstuff Co., Ltd., Taishan Muren Agriculture Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. and its shareholders that give the Company the ability to substantially influence Shenzhen Lorain’s daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of these companies and it consolidates its accounts as a VIE.
iii
ITEM 1. Financial Statements |
PLANET GREEN |
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
(Stated in US Dollars) |
1
CONTENTS |
PLANET GREEN HOLDINGS CORP. |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
AT |
(Stated in US Dollars) |
2018 | 2017 | |||||
Assets | (Unaudited) | |||||
Current assets | ||||||
Cash and cash equivalents | $ | 109,355 | $ | 85,493 | ||
Restricted cash | 436,902 | - | ||||
Short-term investments | 3,815,541 | - | ||||
Trade receivables, net | 1,522,935 | 729,919 | ||||
Inventories | 6,448,871 | 10,593,403 | ||||
Advances and prepayments to suppliers | 448,276 | 3,129,435 | ||||
Other receivables and other current assets | 2,771,309 | 1,612,682 | ||||
Related party receivable | 1,554,727 | - | ||||
Prepaid taxes | 406,649 | - | ||||
Discontinued operations – current assets held for sale | - | 790,550 | ||||
Total current assets | $ | 17,514,565 | $ | 16,941,482 | ||
Non-current assets | ||||||
Investments | 6,891,240 | - | ||||
Plant and equipment, net | 8,806,837 | 36,663,290 | ||||
Intangible assets, net | 894,000 | 13,167,870 | ||||
Construction in progress, net | 1,262,727 | 819,301 | ||||
Discontinued operations – long term assets held for sale | - | 896,099 | ||||
Total Assets | $ | 35,369,369 | $ | 68,488,042 | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities | ||||||
Short-term bank loans | $ | 5,047,110 | $ | 23,773,780 | ||
Long-term debt – current portion | - | 30,511,656 | ||||
Capital lease – current portion | - | 1,074,829 | ||||
Accounts payable | 1,899,367 | 4,150,604 | ||||
Taxes payable | 75,327 | 355,142 | ||||
Accrued liabilities and other payables | 2,707,878 | 9,317,038 | ||||
Customers deposits | 416,896 | 485,295 | ||||
Related party payable | 9,240 | - | ||||
Discontinued operations - liabilities | - | 9,610,994 | ||||
Total current liabilities | $ | 10,155,818 | $ | 79,279,338 | ||
Stockholders’ Equity/(Deficiency) | ||||||
Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | $ | - | $ | - | ||
Common Stock, $0.001 par value, 200,000,000 shares authorized; | 3,143 | 1,531 | ||||
Additional paid-in capital | 64,824,886 | 57,888,993 | ||||
Statutory reserves | 2,810,953 | 25,103,354 | ||||
Accumulated deficit | (52,905,390 | ) | (99,628,547 | ) | ||
Accumulated other comprehensive income | 7,887,909 | 13,588,726 | ||||
Non-controlling interests | 2,592,050 | (7,745,353 | ) | |||
Total Stockholders’ Equity/(Deficiency) | $ | 25,213,551 | $ | (10,791,296 | ) | |
Total Liabilities and Stockholders’ Equity | $ | 35,369,369 | $ | 68,488,042 |
March 31, | December 31, | |||||||
2019 | 2018 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 1,367,758 | $ | 1,062,643 | ||||
Trade receivables, net | 1,044,381 | 6,528,072 | ||||||
Inventories | 10,265 | - | ||||||
Advances and prepayments to suppliers | 7,609,439 | 7,381,785 | ||||||
Other receivables and other current assets | 297 | 16,316 | ||||||
Related party receivable | 1,944 | 2,208 | ||||||
Discontinued operations - current assets held for sale | - | |||||||
Total current assets | $ | 10,034,084 | $ | 14,991,024 | ||||
Non-current assets | ||||||||
Plant and equipment, net | 1,330,474 | 1,371,518 | ||||||
Construction in progress, net | 864,409 | 846,441 | ||||||
Deposits | 1,507 | 1,477 | ||||||
Discontinued operations - long term assets held for sale | - | |||||||
Total Assets | $ | 12,230,474 | $ | 17,210,460 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 475,147 | $ | 579,228 | ||||
Taxes payable | 60,571 | 155,135 | ||||||
Accrued liabilities and other payables | 492,528 | 496,799 | ||||||
Customers deposits | - | 3,499 | ||||||
Related party payable | 90,483 | 78,656 | ||||||
Discontinued operations - liabilities | 3,643,696 | 8,607,813 | ||||||
Total current liabilities | $ | 4,762,425 | $ | 9,921,130 | ||||
Stockholders’ Equity/(Deficiency) | ||||||||
Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2019 and December 31,2018, respectively | $ | $ | - | |||||
Common Stock, $0.001 par value, 200,000,000 shares authorized; 5,497,765 shares issued and outstanding as of March 31, 2019 and December 31,2018, respectively | 5,498 | 5,498 | ||||||
Additional paid-in capital | 74,739,031 | 74,739,031 | ||||||
Statutory reserves | 2,810,953 | 2,810,953 | ||||||
Accumulated deficit | (79,031,187 | ) | (79,038,883 | ) | ||||
Accumulated other comprehensive income | 9,984,943 | 9,792,283 | ||||||
Non-controlling interests | (1,041,189 | ) | (1,019,552 | ) | ||||
Total Stockholders’ Equity/(Deficiency) | $ | 7,468,049 | $ | 7,289,330 | ||||
Total Liabilities and Stockholders’ Equity | $ | 12,230,474 | $ | 17,210,460 |
See Accompanying Notes to the Financial Statements
PLANET GREEN HOLDINGS CORP. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
AND COMPREHENSIVE INCOME (LOSS) |
FOR THE THREE |
(Stated in US Dollars) |
Three months ended September | For the nine months ended | |||||||||||
30, | September 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Net revenues | $ | 744,131 | $ | 875,574 | $ | 2,461,448 | $ | 4,060,100 | ||||
252,268 | ||||||||||||
Cost of revenues | 574,278 | 1,617,308 | 3,480,759 | |||||||||
Gross profit | 169,853 | 623,306 | 844,140 | 579,341 | ||||||||
Operating expenses: | ||||||||||||
Selling and marketing expenses | 8,953 | 34,330 | 61,945 | 4,491,272 | ||||||||
General and administrative expenses | 743,200 | 2,232,225 | 1,483,803 | 2,514,175 | ||||||||
Total operating expenses | 752,153 | 2,266,555 | 1,545,748 | 7,005,447 | ||||||||
Operating (loss) income | (582,300 | ) | (1,643,249 | ) | (701,608 | ) | (6,426,106 | ) | ||||
Other income (expenses): | ||||||||||||
Government subsidy | - | 7,037 | - | 587,743 | ||||||||
Interest income | - | 214,185 | 245 | 1,308 | ||||||||
Interest expense | (712,686 | ) | - | (713,409 | ) | (1,430,217 | ) | |||||
Other income | 6,280,690 | 9,089 | 2,956,428 | |||||||||
Other expenses | (8,618,204 | ) | - | (8,634,106 | ) | (1,914,496 | ) | |||||
Gain (loss) from investment | 56,703,834 | - | 56,714,094 | - | ||||||||
47,372,944 | 6,501,912 | 47,375,913 | 200,766 | |||||||||
Income/(loss) before taxes from continuing operations | 46,790,644 | 4,858,663 | 46,674,305 | (6,225,340 | ) | |||||||
Provision for income taxes expense/(income) | (49,336 | ) | 156,635 | (49,336 | ) | 156,636 | ||||||
(Loss)/income from continuing operations | 46,839,980 | 4,702,028 | 46,723,641 | (6,381,976 | ) | |||||||
Discontinued operations: | ||||||||||||
(Loss) from discontinued operations | - | (397,539 | ) | - | (7,112,707 | ) | ||||||
Provision for income taxes | - | - | - | - | ||||||||
(Loss) from discontinued | - | (397,539 | ) | - | (7,112,707 | ) | ||||||
operations, net of taxes | ||||||||||||
Net income (loss) | $ | 46,839,980 | $ | 4,304,489 | $ | 46,723,641 | $ | (13,494,683 | ) | |||
Net income available (loss attributable) to: | ||||||||||||
- Common shareholders | 46,839,980 | 4,570,667 | 46,723,641 | (11,859.936 | ) | |||||||
- Non-controlling interests | - | (266,178 | ) | - | (1,634,747 | ) | ||||||
Other comprehensive income: | ||||||||||||
Foreign currency translation gain (loss) | 5,839,990 | 1,315,392 | (5,700,817 | ) | 4,381,290 | |||||||
Comprehensive income (loss) | $ | 52,679,970 | $ | 5,619,881 | $ | 41,022,824 | $ | (9,113,393 | ) | |||
Income/(loss) per share from continuing operations - Basic and diluted | $ | 17.26 | $ | 3.07 | $ | 20.39 | $ | (4.16 | ) | |||
Income (loss) per share from discontinued operations - Basic and diluted | $ | - | $ | (0.17 | ) | $ | - | $ | (4.65 | ) | ||
Income (loss) per share - Basic and diluted | $ | 17.26 | $ | 2.81 | $ | 20.39 | $ | (8.81 | ) | |||
Basic and diluted weighted average shares outstanding | 2,713,632 | 1,530,980 | 2,291,075 | 1,530,980 |
For the Three months ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Net revenues | $ | 1,078,245 | $ | 1,017,528 | ||||
Cost of revenues | 779,988 | 901,491 | ||||||
Gross profit | 298,257 | 116,037 | ||||||
Operating expenses: | ||||||||
Selling and marketing expenses | 110 | 21,947 | ||||||
General and administrative expenses | 234,569 | 162,387 | ||||||
Total operating expenses | 234,679 | 184,334 | ||||||
Operating income (loss) | 63,578 | (68,297 | ) | |||||
Other income (expenses): | ||||||||
Interest income | 161 | 486 | ||||||
Other income | - | 730 | ||||||
Other expenses | - | (3,482 | ) | |||||
161 | (2,266 | ) | ||||||
Income (loss) Loss before taxes from continuing operations | 63,739 | (70,563 | ) | |||||
Provision for income taxes | 56,043 | - | ||||||
Income (loss) from continuing operations | 7,696 | (70,563 | ) | |||||
Discontinued operations: | ||||||||
Income (loss) from discontinued operations | - | 13,046 | ||||||
Provision for income taxes | - | - | ||||||
Income (loss) from discontinued operations, net of taxes | - | 13,046 | ||||||
Net income (loss) | $ | 7,696 | $ | (57,517 | ) | |||
Net (loss) income attributable to: | ||||||||
- Common shareholders | 7,696 | (60,100 | ) | |||||
- Non-controlling interests | - | 2,583 | ||||||
Other comprehensive income: | ||||||||
Foreign currency translation gain (loss) | 192,662 | (446,052 | ) | |||||
Comprehensive income (loss) | $ | 200,358 | $ | (503,569 | ) | |||
Loss per share from continuing operations | ||||||||
- Basic and diluted | 0.00 | (0.04 | ) | |||||
Income (loss) per share from discontinued operations | ||||||||
- Basic and diluted | 0.00 | 0.01 | ||||||
Loss per share | ||||||||
- Basic and diluted | 0.00 | (0.03 | ) | |||||
Basic and diluted weighted average shares outstanding | 5,497,765 | 1,754,313 |
See Accompanying Notes to the Financial Statements
PLANET GREEN HOLDINGS CORP. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
FOR THE |
(STATED IN US DOLLARS) |
For the nine months ended | ||||||
September 30, | ||||||
2018 | 2017 | |||||
Cash flows from operating activities | ||||||
Net income/(loss) | $ | 46,723,641 | $ | (6,381,976 | ) | |
Adjustments to reconcile net income to net cash sourced (used) in operating activities: | ||||||
Gain from disposal of investment and subsidiaries | (61,185,851 | ) | - | |||
Adjustment to retained earnings as a result of disposal of subsidiaries | (97,172 | ) | - | |||
Depreciation and amortization expense | 55,495 | 2,294,448 | ||||
Decrease in accounts and other receivables | (1,211,552 | ) | 1,937,550 | |||
Decrease in related party receivables | 33,654,245 | - | ||||
Decrease /(increase) in inventories | (340,243 | ) | (10,723,104 | ) | ||
Decrease/(increase) in advance to suppliers | (2,915 | ) | 21,898,311 | |||
Decrease/(increase) in prepayment | 114,205 | (535,226 | ) | |||
Increase/(decrease) in accounts and other payables | 1,612,931 | (1,081,393 | ) | |||
Increase/(decrease) in taxes payable | 79,395 | 88,883 | ||||
Increase/(decrease) in related party payable | (28,028,524 | ) | - | |||
Increase in customer deposits | 150,738 | 1,769,595 | ||||
Net cash provided by (used in) operating activities | (8,427,021 | ) | 9,267,088 | |||
Cash flows from investing activities | ||||||
Decrease/(increase) in restricted cash | (460,569 | ) | - | |||
Purchase of short-term investments | (3,815,541 | ) | ||||
Purchase of plant and equipment | (2,401 | ) | - | |||
Payment of construction in progress | - | (9,352,282 | ) | |||
Sale of intangible assets | 1,068,320 | - | ||||
Payment for deposits | (2,216,906 | ) | - | |||
Net cash (used in) provided by investing activities | $ | (5,427,097 | ) | $ | (9,352,282 | ) |
Cash flows from financing activities | ||||||
Proceeds from issuance of common stock | 6,052,232 | - | ||||
Increase in additional paid in capital | 9,469,423 | |||||
Repayment of bank borrowings | - | (271,859 | ) | |||
Proceeds from related party receivables | (1,593,387 | ) | - | |||
Net cash provided by financing activities | $ | 13,928,268 | $ | (271,859 | ) | |
Net decrease in cash and cash equivalents | 25,564 | (357,053 | ) | |||
Effect of foreign currency translation on cash and cash equivalents | (1,702 | ) | 34,238 | |||
Cash and cash equivalents–beginning of year | 85,493 | 426,054 | ||||
Cash and cash equivalents–end of year | $ | 109,355 | $ | 103,239 | ||
Supplementary cash flow information: | ||||||
Interest received | $ | 245 | $ | 70 | ||
Interest paid | $ | - | $ | 513,825 | ||
Income taxes paid | $ | - | $ | 310,820 | ||
NON-CASH TRANSACTIONS | ||||||
Issuance of shares to purchase investment | $ | 1,400,000 | $ | - |
For the Three months ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Cash flows from operating activities | ||||||||
Net income/(loss) | $ | 7,696 | $ | (70,563 | ) | |||
Adjustments to reconcile net income to net cash sourced (used) in operating activities: | ||||||||
Gain from disposal of investment and subsidiaries | ||||||||
Adjustment to retained earnings as a result of disposal of subsidiaries | ||||||||
Depreciation and amortization expense | 109,528 | 152,379 | ||||||
Amortization of intangible assets | - | 88,204 | ||||||
Decrease in accounts and other receivables | 459,873 | 1,485,391 | ||||||
Decrease in related party receivables | 264 | - | ||||||
Decrease /(increase) in inventories | (10,265 | ) | 517,677 | |||||
Decrease/(increase) in advance to suppliers | - | (40,950 | ) | |||||
Decrease/(increase) in prepayment | (227,654 | ) | 308,598 | |||||
Increase/(decrease) in accounts and other payables | 38,271 | (3,739,511 | ) | |||||
Increase/(decrease) in taxes payable | (92,968 | ) | (193,615 | ) | ||||
Increase in customer deposits | - | 17,666 | ||||||
Net cash provided by (used in) operating activities | 284,745 | (1,474,724 | ) | |||||
Cash flows from investing activities | ||||||||
Purchase of plant and equipment | - | (2,799 | ) | |||||
Net cash (used in) provided by investing activities | $ | $ | (2,799 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of common stock | - | 1,275,000 | ||||||
Repayment of bank borrowings | - | - | ||||||
Net cash provided by financing activities | $ | - | $ | 1,275,000 | ||||
Net increase (decrease) in cash and cash equivalents | 284,745 | (202,523 | ) | |||||
Effect of foreign currency translation on cash and cash equivalents | 20,370 | 416,907 | ||||||
Cash and cash equivalents–beginning of year | 1,062,643 | 85,493 | ||||||
Cash and cash equivalents–end of year | $ | 1,367,758 | $ | 299,877 | ||||
Supplementary cash flow information: | ||||||||
Interest received | $ | 161 | $ | 486 | ||||
Interest paid | $ | - | $ | - | ||||
Income taxes paid | $ | - | $ | - |
See Accompanying Notes to the Financial Statements
PLANET GREEN HOLDINGS CORP. |
(F/K/A AMERICAN LORAIN CORPORATION) |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
(Stated in US Dollars) |
1. | Organization and Principal Activities |
Planet Green Holdings Corp. formerly known as American Lorain Corporation (the “Company” or “PLAG”) is registered as a corporation in the state of Nevada. The Company conducts its primary business activities through its subsidiaries located in the People’s Republic of China, including its new acquired operating subsidiary Taishan Muren Agriculture Co. Ltd. ThoseThrough its subsidiaries, the Company grow develop, manufacture, and market fresh foodsherbs and spices, convenience foods, chestnutsell sauces and other products developed from these herbs and frozen foods.spices, and offer a variety of food and beverage products, including packaged sauce, tea and brown rice syrup, to consumers and food service businesses.
2. | Summary of Significant Accounting Policies |
Method of accounting
Management has prepared the accompanying financial statements and these notes in accordance to generally accepted accounting principles in the United States of America; the Company maintains its general ledger and journals with the accrual method accounting.
Principles of consolidation
The accompanying consolidated financial statements include the assets, liabilities, and results of operations of the Company, and its subsidiaries, which are listed below:
Place of | Attributable equity | Registered | ||||||
Name of Company | incorporation | interest % | capital | |||||
Planet Green Holdings Corporation | British Virgin Islands | 100 | $ | 10,000 | ||||
JianShi Technology Holding Limited | Hong Kong | 100 | 1,277 | |||||
Shanghai Xunyang Internet Technology Co. Ltd. | PRC | 100 | 669,919 | |||||
Beijing Lorain Co., Ltd. | PRC | VIE | 1,540,666 | |||||
Luotian Lorain Co., Ltd. | PRC | VIE | 3,797,774 | |||||
Shandong Greenpia Foodstuff Co., Ltd. | PRC | VIE | 2,303,063 | |||||
Taishan Muren Agriculture Co. Ltd. | PRC | VIE | 1,913,049 | |||||
Lorain Foodstuff (Shenzhen) Co., Ltd. | PRC | VIE | 500,000 |
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.
On May 18, 2018, the Company incorporated Planet Green Holdings Corporation (“Planet Green BVI”), a limited company incorporated in the British Virgin Islands. On September 28, 2018, Planet Green BVI acquired JianShi Technology Holding Limited, a limited company, incorporated in Hong Kong on February 21, 2012 and Shanghai Xunyang Internet TechTechnology Co. Ltd., a wholly-owned foreign entity incorporated in Shanghai, PRC on August 29, 2012. The formation and acquisition of these companies was to implement the Company’s restructuring plans.
On September 28, 2018, the Company was restructured by disposing its equity interest in International Lorain and its subsidiaries to the former Chairman, Mr. Si Chen, and re-acquiring certain equity interest in subsidiaries;certain of these subsidiaries,; namely, Shandong Greenpia, Beijing Lorain, and Luotian Lorain, indirectly through Planet Green BVI. Please refer to Form 8-K filed on October 2, 2018. The Company entered into exclusive arrangements with Shandong Greenpia, Luotian Lorain, Taishan Muren, and Shenzhen Lorain and its shareholders that give the Company the ability to substantially influence its daily operations and financial affairs. The Company entered into exclusive arrangements with Beijing Lorain; however, the Company does not have significant influence over Beijing Lorain and Beijing Lorain is accounted for as equity method investment. The Company is
In December 2018, the primary beneficiaryCompany’s management determined that it would discontinue the operations of Shandong Greenpia and Luotian Lorain. Accordingly, the Company has recorded full impairment related to the value of those assets.
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Planet Green Holdings Corporation |
Notes to Financial Statements |
In December 2018, the Company was no longer able to exercise significant influence over Beijing Lorain, Taishan Muren, and Shenzhen Lorain; therefore, it consolidatesmanagement did not believe that the Company would be able recover the value of its accounts as a VIE.investment; accordingly, the Company recognized full impairment of its investment in Beijing Lorain.
Consolidation of Variable Interest Entity
VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. Any VIE with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. Management makes ongoing reassessments of whether the Company is the primary beneficiary of Shenzhen Lorain.beneficiary.
On December 14, 2017, the Company formed Shenzhen Lorain as a limited company under the laws of the PRC. Through Shandong Greenpia, the Company entered into exclusive arrangementsVIE agreements with Lorain Food (Shenzhen) Co., Ltd. (“Shenzhen LorainLorain”) and its shareholders that give the Company the ability to substantially influence Shenzhen Lorain’s daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of Shenzhen Lorain and it consolidates its accounts as a VIE. The Company’s arrangements with Shenzhen Lorain consist of the following agreements:
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On September 27, 2018, the above agreements were terminated due to the Company’s restructuring and Shenzhen Lorain was no longer a variable interest entity under Shandong Greenpia.
On September 27, 2018, through Shanghai Xunyang Internet Technology Co. Ltd., the Company entered into exclusive arrangements with Beijing Lorain Co., Ltd., Luotian Lorain Co., Ltd., Shandong Greenpia Foodstuff Co., Ltd., Taishan Muren Agriculture Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. and its shareholders that give the Company the ability to substantially influence Shenzhen Lorain’s daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of these companies and it consolidates its accounts as a VIE. The Company’s arrangements with Beijing Lorain Co., Ltd., Luotian Lorain Co., Ltd., Shandong Greenpia Foodstuff Co., Ltd., Taishan Muren Agriculture Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. consist of the following agreements:
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As of September 30, 2018,March 31, 2019, the following entities were de-consolidated from the structure as a result of the sale agreement executed on September 28, 2018:
Place of | Attributable equity | Registered | ||||||
Name of Company | incorporation | interest % | capital | |||||
International Lorain Holding Inc. | Cayman Islands | 100.0 | $ | 46,659,135 | ||||
Junan Hongrun Foodstuff Co., Ltd. | PRC | 100.0 | 44,861,741 | |||||
Shandong Lorain Co., Ltd. | PRC | 80.2 | 12,123,985 | |||||
Dongguan Lorain Co., Ltd. | PRC | 100.0 | 149,939 |
Discontinued operations
In 2017, the Company discontinued the operations in Shandong Lorain Co. Ltd. and Dongguan Lorain Co., Ltd. As a result, the financial results of these two subsidiaries are presented as discontinued operations.
In the first quarter of 2018, the Company’s board of directors resolved to discontinue the operations of Junan Hongrun Foodstuff Co. Ltd.
As of September 30, 2018, the Company disposed International Lorain Holding Inc. and its subsidiaries: Junan Hongrun Foodstuff Co., Ltd., Shandong Lorain Co., Ltd., Dongguan Lorain Co., Ltd. as a result of the sale agreement. Refer
In the fourth quarter of 2018, the Company’s board of directors resolved to Form 8-K filed on October 2, 2018.discontinue the operations of Beijing Lorain Co, Ltd., Luotian Lorain Co., Ltd., and Shandong Greenpia Foodstuff Co., Ltd.
Use of estimates
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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 at the time the estimates are made; however, actual results could differ materially from those estimates.
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Planet Green Holdings Corporation |
Notes to Financial Statements |
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 securities 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 and 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 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 considers whether evidence indicating the cost of the investment 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 subsequent to 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.
Trade receivables
Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.
Inventories
Inventories consist of raw materials and finished goods which are 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 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.
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Planet Green Holdings Corporation |
Notes to Financial Statements |
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 0% to 10%. The estimated useful lives of the plant and equipment are as follows:
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Buildings | 20-40 years | |||
Landscaping, plant and tree | 30 years | |||
Machinery and equipment | 1-10 years | |||
Motor vehicles | 10 years | |||
Office equipment | 5 years |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company’s results of operations. The costs of maintenance and repairs are recognized to expenses as incurred; significant renewals and betterments are capitalized.
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 costs of acquisition 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.
Land use rights
Land use rights are carried at cost and amortized on a straight-line basis over a specified period. Amortization is provided using the straight-line method over 40-50 years.
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 incurred; accordingly, a charge to the Company’s results of operations will be recognized during the period. 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 be the result of becoming obsolete from a change in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate the 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 are reported at the lower of the carrying amount or fair value less costs to sell.
Statutory reserves
Statutory reserves are referring to the amount appropriated from the net income in accordance with 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 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital.
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Planet Green Holdings Corporation |
Notes to Financial Statements |
Foreign currency translation
The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are the Renminbi (RMB). The Company’s assets and liabilities are translated into United States dollars from RMB at year-end exchange rates, and 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.
9/30/2018 | 12/31/2017 | 9/30/2017 | ||||||||
Period/year end RMB: US$ exchange rate | 6.8665 | 6.5067 | 6.6545 | |||||||
Period/annual average RMB: | ||||||||||
US$ exchange rate | 6.5137 | 6.6133 | 6.8057 |
3/31/2019 | 12/31/2018 | 3/31/2018 | ||||||||||
Period/year end RMB: US$ exchange rate | 6.7335 | 6.8764 | 6.2881 | |||||||||
Period/annual average RMB: US$ exchange rate | 6.7087 | 6.5137 | 6.3171 |
The RMB is not freely convertible into foreign currencies and all foreign exchange transactions must be conducted through authorized financial institutions.
Revenue recognition
The Company recognizes revenue when persuasive evidence of arrangement exists, the price has been fixed or is determinable, the delivery has been completed and no other significant obligations of the Company exists, and collectability of payment is reasonably assured. Payments received prior to all of the foregoing criteria are recorded as customer deposits. Recorded revenue is derived from the value of goods invoiced less value-added tax (VAT).
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 the either expenses as incurred or allocated to inventory as part of overhead.
Income taxes
The Company accounts for income tax using an asset and liability approach and allows for recognition of 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 is able to realize their benefits, or that future realization is uncertain.
Comprehensive income
The Company uses 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.
Earnings per share
The Company computes earnings per share (“EPS”) in accordance with 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 effects of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warrants are calculated using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
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Planet Green Holdings Corporation |
Notes to Financial Statements |
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 disclosure of the fair value of financial instruments held by the Company. 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 each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time 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 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
● | 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.
Commitments and contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Unaudited interim financial information
These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2018.2019.
The consolidated balance sheets and certain comparative information as of December 31, 20172018 are derived from the audited consolidated financial statements and related notes for the year ended December 31, 20172018 (“20172018 Annual Financial Statements”), included in the Company’s 20172018 Annual Report on Form 10-K. These unaudited interim condensed consolidated financial statements should be read in conjunction with the 20172018 Annual Financial Statements.
Recent accounting pronouncements
In January 2017, the FASB issued guidance which simplifies the accounting for goodwill impairment. The updated guidance eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, determined in Step 1. The Company is currently evaluating the impact on the financial statements of this guidance.
In January 2017, the FASB amended the existing accounting standards for business combinations. The amendments clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.
The Company is evaluated the timing and the impact of the aforesaid guidance on the financial statements.
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Planet Green Holdings Corporation |
Notes to Financial Statements |
3. | Restricted Cash |
Restricted cash represents interest bearing deposits placed with banks to secure banking facilities in the form of loans and notes payable. The funds are restricted from immediate use and are designated for settlement of loans or notes when they become due.
| Trade Receivables |
On September 20, 2018, the Company purchased a short-term debt investment in the amount of USD $3,815,541 (RMB26,200,000) issued by Shenzhen Zhongjin Guotai Equity Investment Fund Management Co., Ltd. The investment bears a fixed return of 8% per annum. The investment matures on December 19, 2018. The Board of Directors approved this transaction as a part of the Company’s cash management and short-term investment strategy.
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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; international customers are typically extended 90 days credit.wholesalers.
9/30/2018 | 12/31/2017 | ||||||
Trade accounts receivable | $ | 2,031,180 | $ | 1,534,856 | |||
Less:Allowance for doubtful accounts | (508,245 | ) | (804,937 | ) | |||
$ | 1,522,935 | $ | 729,919 | ||||
Allowance for doubtful accounts: | |||||||
Beginning balance | $ | (804,937 | ) | $ | (695,547 | ) | |
Additions to allowance | - | 109,390 | |||||
Bad debt written-off | 296,692 | - | |||||
Ending balance | $ | (508,245 | ) | $ | (804,937 | ) |
3/31/2019 | 12/31/2018 | |||||||
Trade accounts receivable | $ | 1,044,381 | $ | 6,528,072 | ||||
Less: Allowance for doubtful accounts | - | - | ||||||
$ | 1,044,381 | $ | 6,528,072 | |||||
Allowance for doubtful accounts: | ||||||||
Beginning balance | $ | - | $ | (804,937 | ) | |||
Reclassified to discontinued operations | - | 804,937 | ||||||
Additions to allowance | - | - | ||||||
Bad debt written-off | - | - | ||||||
Ending balance | $ | - | $ | - |
5. | Inventories |
Inventories consisted of the following as of September 30, 2018March 31, 2019 and December 31, 20172018
9/30/2018 | 12/31/2017 | ||||||
Raw materials | $ | 2,455,404 | $ | 2,846,507 | |||
Work in progress | 195,257 | - | |||||
Finished goods | 3,798,210 | 7,746,896 | |||||
$ | 6,448,871 | $ | 10,593,403 |
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The Company’s investment is comprised of 30% of equity interest in Beijing Lorain after the Company’s restructuring.
3/31/2019 | 12/31/2018 | |||||||
Raw material | $ | - | $ | - | ||||
Work in progress | - | - | ||||||
Finished goods | 10,265 | - | ||||||
$ | 10,265 | $ | - |
Plant and Equipment |
Property, plant, and equipment consisted of the following as of September 30, 2018March 31, 2019 and December 31, 2017:2018:
9/30/2018 | 12/31/2017 | ||||||
At Cost: | |||||||
Buildings | $ | 10,119,295 | $ | 47,004,352 | |||
Machinery and equipment | 1,299,557 | 6,096,099 | |||||
Office equipment | 62,581 | 433,451 | |||||
Motor vehicles | 26,331 | 162,330 | |||||
Biological assets | 1,608,318 | - | |||||
$ | 13,116,082 | $ | 53,696,232 | ||||
Less: Accumulated depreciation | (4,309,245 | ) | (17,032,942 | ) | |||
$ | 8,806,837 | $ | 36,663,290 |
3/31/2019 | 12/31/2018 | |||||||
At Cost: | ||||||||
Buildings | $ | 1,140,645 | $ | 1,116,940 | ||||
Machinery and equipment | 31,732 | 31,066 | ||||||
Biological assets | 2,122,125 | 2,078,012 | ||||||
$ | 3,294,502 | $ | 3,226,018 | |||||
Less: Accumulated depreciation | (1,964,028 | ) | (1,854,500 | ) | ||||
$ | 1,330,474 | $ | 1,371,518 |
Depreciation expense for the ninethree months ended September 30,March 31, 2019 and 2018 was $109,528 and 2017 was $250,591 and $1,497,637,$152,379 respectively.
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As of September 30, 2018, other receivables and other current assets was primarily deposits paid to an unrelated party to purchase land use rights and real property.
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Planet Green Holdings Corporation |
Notes to Financial Statements |
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9/30/2018 | 12/31/2017 | ||||||
At Cost: | |||||||
Land use rights | $ | 1,249,045 | $ | 15,366,444 | |||
Less: Accumulated amortization | (355,045 | ) | (2,198,574 | ) | |||
$ | 894,000 | $ | 13,167,870 |
All land is owned by the government in China. Land use rights represent the Company’s purchase of usage rights for a parcel of land for a specified duration of time, typically 50 years. Amortization expense for the nine months ended September 30, 2018 and 2017 was $24,291 and $796,811, respectively.
| Income Taxes |
On August 8, 2015, the Company re-organized its French operations by merging the operations of Conserverie Minerve into its immediate parent Athena, and concurrently, Athena wound up and dissolved Conserverie Minerve. Athena subsequently changed its own legal name to Conserverie Minerve and to continue its business. At the date of acquisition, the net liability of Conserverie Minerve was $3,255,911(EUR 2,968,089); the purchase consideration paid for the Athena (aka Conserverie Minerve) was $2,100,000. The acquisition of Athena and its then subsidiaries gave rise to goodwill in the amount of $6,786,928. As of December 31, 2015, the surviving business entity, Conserverie Minerve, on a post merged basis, recognized net operating losses during the year ended December 31, 2015. As of December 31, 2015, the Company was unable to determine if the Conserverie Minerve would be able to generate future profit and positive operating cash flows to justify the carrying value of goodwill in the amount of $6,786,928; accordingly, the Company elected to write-off the goodwill that it had recognized during its acquisition of Conserverie Minerve. Conserverie Minerve had a goodwill of its own that had accumulated over the years as result of its acquisition of subsidiaries; at December 31, 2015, the outstanding balance was $3,219,172. As mentioned in “Note 2 - Summary of Significant Accounting Policies-Principles of Consolidation”, Conserverie Minerve has been liquidated and the Company no longer has any interest in Conserverie Minerve; accordingly, all remaining goodwill was written off during the year ended December 31, 2017.
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Bank loans include bank overdrafts, short-term bank loans, and current portion of long-term loan, which consisted of the following as of September 30, 2018 and December 31, 2017:
Short-term Bank Loans | 9/30/2018 | 12/31/2017 | |||||
Loan from Industrial and Commercial Bank of China, | |||||||
• Interest rate at 6.955% per annum; due 4/20/2016 | - | 3,838,005 | |||||
• Interest rate at 4.30% per annum; due 4/30/2017 | - | 1,152,658 | |||||
• Interest rate at 4.30% per annum; due 5/30//2017 | - | 1,211,059 | |||||
• Interest rate at 4.30% per annum; due 6/29/2017 | - | 1,152,658 | |||||
• Interest rate at 4.30% per annum; due 8/2/2017 | - | 1,014,339 | |||||
Loan from China Minsheng Bank Corporation, Linyi Branch | |||||||
•Interest rate at 5.98% per annum due 9/22/2016 | - | 1,535,340 | |||||
Loan from Agricultural Bank of China, Luotian Branch | |||||||
• Interest rate at 5.65% per annum due 4/22/2017 | 1,456,339 | 1,536,877 | |||||
Luotian Sanliqiao Credit Union, | |||||||
• Interest rate at 9.72% per annum due 1/14/2017 | 1,456,339 | 1,536,877 | |||||
• Interest rate at 9.72% per annum due 2/4/2017 | 436,902 | 461,063 | |||||
• Interest rate at 9.72% per annum due 9/7/2017 | 87,380 | 92,213 | |||||
Bank of Ningbo, | |||||||
• Interest rate at 7.80% per annum due 10/27/2016 | - | 1,229,502 | |||||
Hankou Bank, Guanggu Branch, | |||||||
• Interest rate at 6.85% per annum due 10/24/2016 | 1,318,883 | 1,391,820 | |||||
Postal Savings Bank of China, | |||||||
• Interest rate at 9.72% per annum due 7/27/2016 | 392,951 | 399,588 | |||||
China Construction Bank, | |||||||
• Interest rate at 6.18% per annum due 11/29/2016 | - | 768,439 | |||||
Huaxia Bank, | |||||||
• Interest rate at 5.66% per annum due 5/19/2017 | - | 1,536,877 | |||||
City of Linyi Commercial Bank, Junan Branch, | |||||||
• Interest rate at 8.4% per annum due 2/16/2016 | - | 1,535,334 | |||||
• Interest rate at 8.4% per annum due 11/24/2016 | - | 3,073,756 | |||||
Hubei Jincai Credit and Financial Services Co. Ltd. | |||||||
• Interest rate at 9.00% per annum due 1/12/2017 | 291,267 | 307,375 | |||||
$ | 5,047,110 | $ | 23,773,780 |
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The short-term loans, which are denominated in Renminbi and Euros, were primarily obtained for general working capital. If not otherwise specifically indicated above, short-term bank loans are guaranteed either by other companies within the group, or by personnel in senior management positions within the group. As of September 30, 2018, all short-term loans have been in default and have not been repaid. The Company is in negotiations to renew these loans or modify the repayment terms and principal amount due.
As of September 30, 2018, as a result of the disposal of International Lorain Holding Inc. and its subsidiaries: Junan Hongrun Foodstuff Co., Ltd., Shandong Lorain Co., Ltd., Dongguan Lorain Co., Ltd., the Company is no longer liable for certain bank loans as they have been transferred to Mr. Si Chen, the former chairman.
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Current portions of notes payable, debentures, and long-term debt consisted of the following as of September 30, 2018 and December 31, 2017:
The Company began repaying principal and interest on the loan with DEG in semi-annual installments on December 15, 2012. As of September 30, 2018 and December 31, 2017, the Company had not repaid any principal nor interest. The loan was collateralized with the following terms:
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As a result of disposal of International Lorain and the subsidiaries, The Company is in default of the debentures that were issued by Guoyuan Securities and Daiwa SSC Securities and negotiating with the debenture holders to extend repayment terms.
As of September 30, 2018, as a result of the disposal of International Lorain Holding Inc. and its subsidiaries: Junan Hongrun Foodstuff Co., Ltd., Shandong Lorain Co., Ltd., Dongguan Lorain Co., Ltd., the Company is no longer liable for certain bank loans as they have been transferred to Mr. Si Chen, the former chairman.
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On December 28, 2017, the Company entered into a securities purchase agreement, pursuant to which Yi Li and Beili Zhu, each an individual residing in the People’s Republic of China, agreed to invest an aggregate of $1.275 million in the Company in exchange for an aggregate of 300,000 shares of the Company’s common stock, representing a purchase price of $4.25 per share. The transaction closed on January 23, 2018.
On April 14, 2018, the Company entered into a securities purchase agreement, pursuant to which Zongqi Shi, Aidi Zhang, Qiong Chen, Yi Li, Beili Zhu, Yanbo Wang, Jinhui Chen and Guoyang Zeng, each an individual residing in the People’s Republic of China, agreed to invest an aggregate of $1.629 million in the Company in exchange for an aggregate of 362,000 shares of the Company’s common stock, representing a purchase price of $4.50 per share. The transaction closed on August 10, 2018.
On April 24, 2018, the Company entered into a securities purchase agreement, pursuant to which Xiupin Cai, an individual residing in the People’s Republic of China, agreed to invest an aggregate of $1,800,000 million in the Company in exchange for an aggregate of 400,000 shares of the Company’s common stock, representing a purchase price of $4.50 per share. The transaction closed on August 10, 2018.
On July 12, 2018, the Company entered into a securities purchase agreement, pursuant to which Yunpeng Zhang and Zhongquan Sun, individuals residing in the People’s Republic of China, agreed to invest an aggregate of $750,000 in the Company in exchange for an aggregate of 150,000 shares of the Company’s common stock, par value $0.001 per share, representing a purchase price of $5.00 per share. The transaction closed on August 2, 2018.
On September 25, 2018, the Company and Shanghai Xunyang Internet Technology Co., Ltd., a subsidiary of the Company, entered into a Share Exchange Agreement with Taishan Muren Agriculture Co. Ltd., a limited liability company registered in China, and Shenzhen Jiamingrui New Agriculture Co., Ltd., a limited liability company registered in China, the sole shareholder of the Taishan Muren Agriculture Co. Ltd., pursuant to which, among other things and subject to the terms and conditions contained therein, the Subsidiary agreed to effect an acquisition of Taishan Muren Agriculture Co. Ltd. by acquiring from Shenzhen Jiamingrui New Agriculture Co., Ltd. all outstanding equity interests of Taishan Muren Agriculture Co. Ltd.
Pursuant to the Share Exchange Agreement, in exchange for the transfer of all of the outstanding shares of Taishan Muren Agriculture Co. Ltd, the Company agreed to issue 400,000 shares, a post-reverse stock split amount, of the Company’s common stock to Shenzhen Jiamingrui New Agriculture Co., Ltd. The share issuance was accounted for as of September 30, 2018 although the shares for subsequently issued on October 1, 2018.
On September 28, 2018, the Company filed a Certificate of Amendment with the Secretary of State of the State of Nevada to effect a reverse stock split of its common stock at a ratio of twenty-five-for-one (25-for-1). The financing transactions listed above are presented as of the reverse stock split had already taken place.
There were 3,143,141 shares of common stock outstanding as of September 30, 2018, which includes the 400,000 shares issued to Shenzhen Jiamingrui New Agriculture Co., Ltd. for the acquisition of Taishan Muren Agriculture Co. Ltd.
For the nine months ended September 30, 2017 and 2018, the Company had not issued shares as stock compensation to employees.
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All of the Company’s continuing operations are located in the PRC. The corporate income tax rate in the PRC is 25%.
The following tables provide the reconciliation of the differences between the statutory and effective tax expenses following as of September 30, 2018for the three months ended March 31, 2019 and 2017:2018:
9/30/2018 | 9/30/2017 | ||||||
Loss attributed to PRC continuing operations | $ | (283,668 | ) | $ | (6,163,090 | ) | |
Income/(loss) attributed to U.S. operations | 46,439,953 | (62,250 | ) | ||||
Income/(loss) before tax | $ | 46,723,641 | $ | (6,225,340 | ) | ||
PRC Statutory Tax at 25% Rate | - | - | |||||
Effect of tax exemption granted | - | - | |||||
Income tax | $ | (49,336 | ) | $ | 156,636 |
3/31/2019 | 3/31/2018 | |||||||
Income/(loss) attributed to PRC continuing operations | $ | 63,739 | $ | (70,563 | ) | |||
Income/(loss) attributed to U.S. operations | ||||||||
Income/(loss) before tax | $ | 63,739 | $ | (70,563 | ) | |||
PRC Statutory Tax at 25% Rate | 56,043 | - | ||||||
Effect of tax exemption granted | ||||||||
Income tax | $ | 56,043 | $ | - |
Per Share Effect of Tax Exemption
9/30/2018 | 9/30/2017 | ||||||
Effect of tax exemption granted | $ | - | $ | - | |||
Weighted-Average Shares Outstanding Basic | 2,291,075 | 1,530,380 | |||||
Per share effect | $ | - | $ | - |
3/31/2019 | 3/31/2018 | |||||||
Effect of tax exemption granted | $ | - | $ | - | ||||
Weighted-Average Shares Outstanding Basic | 5,497,765 | 1,754,313 | ||||||
Per share effect | $ | - | $ | - |
The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows of September 30, 2018for the Three months ended March 31, 2019 and 2017:2018:
9/30/2018 | 9/30/2017 | ||||||
U.S. federal statutory income tax rate | 21% | 35% | |||||
Higher (lower) rates in PRC, net | 4% | -10% | |||||
Non-recognized deferred tax benefits in the PRC | -25% | -27.54% | |||||
The Company’s effective tax rate | 0% | -2.54% |
F-13
3/31/2019 | 3/31/2018 | |||||||
U.S. federal statutory income tax rate | 21 | % | 21 | % | ||||
Higher (lower) rates in PRC, net | 4 | % | 4 | % | ||||
Expenses not deductible to taxable income | 62.9 | % | -25 | % | ||||
The Company’s effective tax rate | 87.9 | % | 0 | % |
F-12
Notes to Financial Statements |
8. | Earnings/(Loss) Per Share |
Components of basic and diluted earnings per share were as follows:
For the nine months ended | |||||||
September 30, | |||||||
2018 | 2017 | ||||||
Basic and diluted (loss) earnings per share numerator: | |||||||
Income/(loss) from continuing operations (attributable) available to common stockholders | $ | 46,723,641 | (6,381,976 | ) | |||
(Loss) income from discontinued operations (attributable) available to common stockholders | - | (5,477,960 | ) | ||||
(Loss) income (attributable) available to common stockholders | 46,723,641 | (11,859,936 | ) | ||||
Basic and diluted (loss) earnings per share denominator: | |||||||
Original Shares: | 1,530,980 | 1,530,980 | |||||
Additions from Actual Events-Issuance of Common Stock | 2,752,941 | - | |||||
Basic Weighted Average Shares Outstanding | 2,291,075 | 1,530,980 | |||||
Income/(loss) per share from continuing operations - Basic and diluted | 20.39 | (4.16 | ) | ||||
Income/(loss) per share from discontinued operations - Basic and diluted | - | (4.65 | ) | ||||
Income/(loss) per share - Basic and diluted | 20.39 | (8.81 | ) | ||||
Weighted Average Shares Outstanding - Basic and diluted | 2,291,075 | 1,530,980 |
F-14
For the three months ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Basic and diluted (loss) earnings per share numerator: | ||||||||
Income/(loss) from continuing operations (attributable) available to common stockholders | $ | 7,696 | (70,563 | ) | ||||
(Loss) income from discontinued operations (attributable) available to common stockholders | - | 13,046 | ||||||
(Loss) income (attributable) available to common stockholders | 7,696 | (60,100 | ) | |||||
Basic and diluted (loss) earnings per share denominator: | ||||||||
Original Shares: | 5,497,765 | 1,530,980 | ||||||
Additions from Actual Events -Issuance of Common Stock | - | 233,333 | ||||||
Basic Weighted Average Shares Outstanding | 5,497,765 | 1,754,313 | ||||||
Income/(loss) per share from continuing operations - Basic and diluted | 0.00 | (0.04 | ) | |||||
Income/(loss) per share from discontinued operations - Basic and diluted | - | 0.01 | ||||||
Income/(loss) per share - Basic and diluted | 0.00 | (0.03 | ) | |||||
Weighted Average Shares Outstanding - Basic and diluted | 5,497,765 | 1,754,313 |
F-13
Planet Green Holdings Corporation |
Notes to Financial Statements |
9. | Lease Commitments |
For the year ended December 31, 2016, the CompanyTaishan Muren Agriculture Co., Ltd. entered into four operating lease agreements leasing two plots of land where biological assets are grown, two offices, and farming facilities. For the year ended December 31, 2017, Taishan Muren Agriculture Co. Ltd. entered into three operating lease agreements leasing three additional plots of land where biological assets are grown. For the year ended December 31, 2018
The leases entered and expires as follows:
Lease | Date Commenced | Date of expiration | |||
Lease #1 | March 1, 2016 | February 28, 2031 | |||
Lease #2 | March 1, 2016 | February 28, 2031 | |||
Lease #3 | March 1, 2016 | February 28, 2031 | |||
Lease #4 | November 1, 2016 | November 1, 2019 | |||
Lease #5 | January 1, 2017 | February 28, 2031 | |||
Lease #6 | January 1, 2017 | February 28, 2031 | |||
Lease #7 | January 1, 2018 | February 28, 2031 |
The minimum future lease payments for these properties at September 30, 2018March 31, 2019 are as follows:
Period | Lease Payable | |||
Year 1 | $ | 224,896 | ||
Year 2 | 224,896 | |||
Year 3 | 224,896 | |||
Year 4 | 224,896 | |||
Year 5 | 224,896 | |||
Thereafter | 1,386,853 | |||
$ | 2,511,333 |
The outstanding lease commitments for the leases listed above as of September 30,March 31, 2019 was $2,511,333.
In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” The new standard requires lessees to recognize lease assets (right of use) and lease obligations (lease liability) for leases previously classified as operating leases under generally accepted accounting principles on the balance sheet for leases with terms in excess of 12 months. The standard is effective for annual periods beginning after December 15, 2018, was $2,737,534.including interim periods within those fiscal years. The Company is assessing the impact of the adoption of the new standard.
F-15
F-14
Notes to Financial Statements |
| Other Expenses |
Other expenses consisted of the following:
3/31/2019 | 3/31/2018 | |||||||
Other expense: | ||||||||
Impairment of property and equipment | $ | - | $ | - | ||||
Other | - | (3,482 | ) | |||||
$ | - | $ | (3,482 | ) |
11. | Discontinued Operations |
As of December 31, 2018, the Company has reclassified the results of operations and the financial position of Luotian Lorain and Shandong Greenpia as discontinued operations. Selected details regarding those discontinued operations are provided below. Selected details regarding those discontinued operations are provided below.
For the three months ended March 31, | ||||||||
Results of Operations | 2019 | 2018 | ||||||
Sales | $ | - | $ | 14,582 | ||||
Cost of sales | - | |||||||
Gross profit | - | 14,582 | ||||||
Operating expenses | - | 1,536 | ||||||
Other expenses | - | - | ||||||
Loss before Taxes | - | 13,046 | ||||||
Taxes | - | - | ||||||
Net income | $ | - | $ | 13,046 |
At | At | |||||||
Financial Position | 3/31/2019 | 12/31/2018 | ||||||
Current Assets | $ | - | $ | - | ||||
Non-Current Assets | - | - | ||||||
Total Assets | $ | - | $ | - | ||||
Current Liabilities | $ | 3,643,696 | $ | 8,607,813 | ||||
Total Long-Term Liabilities | - | |||||||
Total Liabilities | $ | 3,643,696 | $ | 8,607,813 | ||||
Net Assets | $ | (3,643,696 | ) | $ | (8,607,813 | ) | ||
Total Liabilities & Net Assets | $ | 0.00 | $ | 0.00 |
F-15
Planet Green Holdings Corporation |
Notes to Financial Statements |
12. | 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 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.
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
D. | Environmental risks |
The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential damage to employees, equipment, and local environment.
F-16
E. | Inflation Risk |
Management monitors changes in prices levels. Historically inflation has not materially impacted the company’s financial statements; however, significant increases in the price of raw materials and labor that cannot be passed to the Company’s customers could adversely impact the Company’s results of operations.
F-16
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Notes to Financial Statements |
13. | Subsequent Events |
On August 8, 2018,April 10, 2019, the Company’s executive officers determined to dispose the discontinued subsidiaries, Luotian Green Foodstuff Co., Ltd. and Shandong Greenpia Foodstuff Co., Ltd. for the interests of the Company and its stockholders.
On April 29, 2019, the Company issued a press release (the “Press Release”) announcing that on April 26, 2019, the NYSE American LLC (“NYSE American”) notified the Company that the Company had regained compliance with the NYSE American listing requirements because it has resolved the continued listing deficiency with respect to Section 1003(a)(i) and Section 1003(a)(ii) of the NYSE American Company Guide.
On May 9, 2019, the Company and its wholly owned subsidiary Shanghai Xunyang Internet Technology Co., Ltd. (“Subsidiary”) entered into an amendeda Share Exchange Agreement with Xianning Bozhuang Tea Products Co., Ltd. (“Target”) and restated securities purchase agreement with Yimin Jin,each of the Company’s chief strategy officershareholders of Target (collectively, “Sellers”). Such transaction closed on May 14, 2019. Pursuant to the Share Exchange Agreement, the Subsidiary acquired all outstanding equity interests of Target, a company that produces tea products and director, and Hongxiang Yu,sells such products in China. Pursuant to the Company’s chairman, chief executive officer and president (collectively,Share Exchange Agreement, the “purchasers”), pursuant to which the purchasers agreed to investCompany issued an aggregate of $10 million in1,080,000 shares of common stock of the Company in exchange for an aggregate of 2,352,942 shares (on a post-reverse stock split basis) ofto the Company’s common stock, representing a purchase price of approximately $4.25 per share.
On October 16, 2018, the Company closed the Financing, which was approved at the Company's 2018 annual meeting of stockholders held on September 26, 2018. At the closing, the Company received gross proceeds of $10,000,000 in the aggregate,Sellers in exchange for the issuancetransfer of all of the shares.equity interest of the Target to the Subsidiary.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview
Overview
Historically, we have been an integrated food manufacturing company
We are headquartered in Shanghai, China. We have developed, manufactured and soldSince the following typesrestructuring of food products:our company in September 2018, our primary business, which is carried out by Taishan Muren, our newly acquired business, is:
We conduct our production activities in China. Our products are sold in the Chinese domestic markets.
Following our recent restructuring and acquisition, which are described below under “—Recent Developments,” we still maintain certain of our old operations and also grow various spice plants and fruit trees, and sell such products, in China.
Recent Developments
Financings
On July 12, 2018, the Company entered into a securities purchase agreement with Yunpeng Zhang and Zhongquan Sun, who agreed to invest an aggregate of $750,000 in the Company in exchange for an aggregate of 150,000 shares of the Company’s common stock, representing a purchase price of $5.00 per share. This financing closed on August 2, 2018.
On August 8, 2018, the Company entered into an amended and restated securities purchase agreement with Yimin Jin, the Company’s chief strategy officer and director, and Hongxiang Yu, the Company’s chairman, chief executive officer and president (collectively, the “Purchasers”), pursuant to which the Purchasers agreed to invest an aggregate of $10 million in the Company in exchange for an aggregate of 2,352,942 shares (on a post-reverse stock split basis) of the Company’s common stock (the “Shares”), representing a purchase price of approximately $4.25 per share (the “Financing”). On October 16, 2018, the Company closed the Financing, which was approved at the Company's 2018 annual meeting of stockholders held on September 26, 2018. At the closing, the Company received gross proceeds of $10,000,000 in the aggregate, in exchange for the issuance of the Shares.
Sale Transaction
On August 8, 2018, the Company, Si Chen, and the Company’s direct and indirect subsidiaries, Planet Green Holdings Corp., 100% owned by the Company (“Planet Green”), Junan Hongrun Foodstuff Co., Ltd. (“Junan”), Shandong Lorain Co., Ltd. (“Shandong Lorain”), International Lorain Holdings, Inc., 100% owned by the Company (“ILH”), Shandong Greenpia Foodstuff Co., Ltd. (“Shandong Greenpia”), Beijing Lorain Co., Ltd. (“Beijing Lorain”) and Luotian Lorain Co., Ltd. (“Luotian Lorain”) entered into a share exchange agreement (the “Sale Agreement”). The Sale Agreement provided for:
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On September 26, 2018, the Company’s stockholders approved the Sale Transaction and related proposals at the Annual Meeting. On September 28, 2018, the Company closed the Sale Transaction.
Acquisition Transaction
On September 25, 2018, the Company and Shanghai Xunyang Internet Technology Co., Ltd. (“Xunyang”), a subsidiary of the Company, entered into a Share Exchange Agreement (the “Acquisition Agreement”) with Taishan Muren Agriculture Co. Ltd., a limited liability company registered in China (“Target”), and Shenzhen Jiamingrui New Agriculture Co., Ltd., a limited liability company registered in China (the “Seller”), the sole shareholder of the Target, pursuant to which, among other things and subject to the terms and conditions contained therein, Xunyang agreed to effect an acquisition of Target by acquiring from the Seller all outstanding equity interests of Target (the “Acquisition Transaction”). Target grows various spice plants and fruit trees and sells such products in China.
Pursuant to the Acquisition Agreement, in exchange for the transfer of all of the outstanding shares of Target to the Subsidiary, the Company agreed to issue 400,000 shares of the Company’s common stock to the Seller. On September 28, 2018, the Company closed the Acquisition Transaction.
Management Changes
On September 26, 2018, at the Annual Meeting, the Company’s stockholders elected Hongxiang Yu, Yimin Jin, Yuguo Zhang, Yilei Shao and Guangming Fang to serve as directors of the Company for a one-year term, expiring at the Company’s 2019 annual meeting. Hongxiang Yu was also elected to serve as the Chairman of the Company’s board of directors (the “Board”). As of September 26, 2018, Si Chen and Maoquan Wei are no longer members of the Board.
On September 27, 2018, Si Chen resigned as the Company’s Chief Executive Officer and President, and Yunqiang Sun resigned as the Company’s Chief Financial Officer.
On September 27, 2018, the Board appointed Hongxiang Yu to serve as the Chief Executive Officer and President of the Company and Yu Li as the Chief Financial Officer.
Reverse Stock Split
On September 28, 2018, the Company filed a Certificate of Amendment (the “Certificate of Amendment”) to its Articles of Incorporation (as amended, the “Charter”) with the Secretary of State of the State of Nevada to: (i) change the Company’s name from “American Lorain Corporation” to “Planet Green Holdings Corp.” and (ii) effect a reverse stock split of its common stock at a ratio of twenty-five-for-one (25-for-1).
Results of Operations
Three Months Ended September 30, 2018March 31, 2019 Compared to Three Months Ended September 30, 2017March 31, 2018
The following table summarizes the results of our operations during the three-month periods ended September 30,March 31, 2019 and March 31, 2018, and September 30, 2017, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the three-month period ended September 30, 2018March 31, 2019 compared to the three month period ended September 30, 2017.March 31, 2018.
(All amounts, other than percentages, stated in thousands of U.S. dollars)
Three months ended | Increase / | Increase / | ||||||||||
September 30, | ||||||||||||
Decrease | Decrease | |||||||||||
(In Thousands of USD) | 2018 | 2017 | ($) | (%) | ||||||||
Net revenues | 744 | 876 | (132 | ) | (15.1 | ) % | ||||||
Cost of revenues | 574 | 252 | 322 | 127.8 | % | |||||||
Gross profit (loss) | 170 | 623 | (453 | ) | (72.7 | ) % | ||||||
Operating expenses: | ||||||||||||
Selling and marketing expenses | 9 | 34 | (25 | ) | (73.5 | ) % | ||||||
General and administrative expenses | 743 | 2,232 | (1,489 | ) | (66.7 | ) % | ||||||
Operating (loss) Income | (582 | ) | (1,643 | ) | (1,061 | ) | (64.6 | ) % | ||||
Government subsidy income | - | 7 | (7 | ) | (100.0% | )% | ||||||
Interest and other income | - | 6,495 | (6,495 | ) | (100.0 | ) % | ||||||
Other expenses | (8,618 | ) | - | 8,618 | 100.0 | % | ||||||
Interest expense | (713 | ) | - | 713 | 100.0 | % | ||||||
Gain from investment | 56,704 | - | 56,704 | 100 | % | |||||||
Income before tax from continuing operations | 46,791 | 4,859 | 41,932 | 863.0 | % | |||||||
Income tax expense/(income) | (49 | ) | 157 | (206) | 131.2 | % | ||||||
Net income from continuing operations | 46,840 | 4,702 | 42,138 | 896.2 | % | |||||||
Net (loss) income from discontinued operations | - | (398 | ) | (398 | ) | (100.0 | ) % | |||||
Net Income | 46,840 | 4,304 | 42,536 | 988.3 | % | |||||||
Non-controlling interests | - | (266 | ) | (266 | ) | (100.0 | ) % | |||||
Net income of common stockholders | 46,840 | 4,571 | 42,269 | 924.7 | % |
Three months ended | Increase / | Increase / | ||||||||||||||
March 31, | Decrease | Decrease | ||||||||||||||
(In Thousands of USD) | 2019 | 2018 | ($) | (%) | ||||||||||||
Net revenues | 1,078 | 1,018 | 60 | 5.9 | ||||||||||||
Cost of revenues | 780 | 901 | (121 | ) | (13.4 | ) | ||||||||||
Gross profit (loss) | 298 | 116 | 182 | 156.9 | ||||||||||||
Operating expenses: | - | - | - | - | ||||||||||||
Selling and marketing expenses | - | 22 | (22 | ) | (100.0 | ) | ||||||||||
General and administrative expenses | 235 | 162 | 73 | 45.1 | ||||||||||||
Operating (loss) Income | 64 | (68 | ) | 132 | (194.1 | ) | ||||||||||
Government subsidy income | - | - | - | - | ||||||||||||
Interest and other income | - | 1 | (1 | ) | (100.0 | ) | ||||||||||
Other expenses | - | (3 | ) | 3 | (100.0 | ) | ||||||||||
Interest expense | - | - | - | |||||||||||||
Gain from investment | - | - | - | - | ||||||||||||
Income before tax from continuing operations | 64 | (71 | ) | 135 | (190.1 | ) | ||||||||||
Income tax expense/(income) | 56 | - | 56 | - | ||||||||||||
Net income from continuing operations | 8 | (71 | ) | 79 | (111.3 | ) | ||||||||||
Net (loss) income from discontinued operations | - | 13 | (13 | ) | (100.0 | ) | ||||||||||
Net Income | 8 | (58 | ) | 66 | (113.8 | ) | ||||||||||
Non-controlling interests | - | 3 | (3 | ) | (100.0 | ) | ||||||||||
Net income of common stockholders | 8 | (60 | ) | 68 | (113.3 | ) |
2
Revenue
Net Revenues. Our net revenuerevenues for the three months ended September 30, 2018March 31, 2019 amounted to $0.7$1.07 million, which represents a decreasean increase of approximately $0.2$0.06 million, or 22.2%5.9%, from the three-month period ended on September 30, 2017,March 31, 2018, in which our net revenue was $0.9$1.01 million. This decreaseincrease was attributable to the disposal of certain of our historical subsidiaries.subsidiaries and acquisition of Taishan Muren.
Cost of Revenues. During the three months ended September 30, 2018,March 31, 2019, we experienced an increasedecrease in cost of revenue of $0.3$0.12 million, in comparison to the three months ended September 30, 2017,March 31, 2018, from approximately $0.3$0.9 million to $0.6$0.78 million, reflecting an increasea decrease of 50.0% 14%. This increasedecrease was related to our new subsidiary, Taishan Muren Agriculture Co. Ltd. and disposal and discontinue of certain subsidiaries.
Gross Profit. Our gross profit decreased $0.4increased $0.18 million, or 66.7%157%, to $0.2$0.29 million for the three months ended September 30, 2018March 31, 2019 from $0.6$0.11 million for the three months ended September 30, 2017,March 31, 2018, attributable to the disposal of certain of our historical subsidiaries.subsidiaries and acquisition of Taishan Muren.
Operating Expenses
Selling and Marketing Expenses. Our selling and marketing expenses decreased $0.025 million,$21,847, or 73.5%99%, to $0.009 million$110 during the three months ended September 30, 2018,March 31, 2019, as compared to $0.034 million$21,947 during the three months ended September 30, 2017.March 31, 2018. The decrease of our selling and marketing expenses is mainly due to thea decrease ofin sales activities.activities because sales generated from our existing clients had been steady.
General and Administrative Expenses.We experienced a decreasean increase in general and administrative expense of $1.5$0.07 million from $2.2$0.16 million to approximately $0.7$0.23 million for the three months ended September 30, 2018,March 31, 2019, compared to the three months ended September 30, 2017. General and administrative expenses incurredMarch 31, 2018. This cost increase was caused by PRC subsidiaries to maintainthe cost of service providers in connection with our operation in China decreased during such periods due to the disposal of certain of our historical subsidiaries.reporting obligation.
Other ExpensesNet Income
Other expenses, consisting of related party account receivable, was approximately $8.6 million
Net income increased to $8,000 for the three months ended September 30, 2018, compared to $0 million during the three months ended September 30, 2017. Such increase was attributable to the reorganization and disposalMarch 31, 2019 from net loss of several subsidiaries which contains a huge amount of related party account receivable.
Interest Expense
Interest expense, consisting of interest payments with respect to our outstanding loans, was $0.7 million$58,000 for the three months ended September 30, 2018, compared to $0 million during the three months ended September 30, 2017. Such increase was attributable to our interest repayments on outstanding loans.
Gain From Investment
Gain from investment, representing a gain resulting from a recent corporate restructuring, was approximately $56.7 million for the three months ended September 30, 2018, compared to $0 million during the three months ended September 30, 2017.
Net Income
Net income increased to $46.8 million for the three months ended September 30, 2018 from $4 million for the three months ended September 30, 2017.March 31, 2018. Such gain was primarily the result of a corporate restructuring involving the dispositionacquisition of investments in certain subsidiaries which resulted in a substantial gain.
Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017
The following table summarizes the results of our operations during the nine-month period ended September 30, 2018Taishan Muren and September 30, 2017, respectively,disposal and provides information regarding the dollar and percentage increase or (decrease) from the nine-month period ended September 30, 2018 compared to the nine-month period ended September 30, 2017.
(All amounts, other than percentages, stated in thousands of U.S. dollars)
Nine months ended | Increase / | Increase / | ||||||||||
September 30, | ||||||||||||
Decrease | Decrease | |||||||||||
(In Thousands of USD) | 2018 | 2017 | ($) | (%) | ||||||||
Net revenues | 2,461 | 4,060 | (1,599 | ) | (39.4 | ) % | ||||||
Cost of revenues | 1,617 | 3,480 | (1,863 | ) | (53.5 | ) % | ||||||
Gross profit (loss) | 844 | 579 | 265 | 45.8 | % | |||||||
Operating expenses: | ||||||||||||
Selling and marketing expenses | 62 | 4,491 | (4,429 | ) | (98.6 | ) % | ||||||
General and administrative expenses | 1,484 | 2,514 | (1,030 | ) | (41.0 | ) % | ||||||
Operating (loss) Income | (702 | ) | (6,426 | ) | (5,724 | ) | (89.1 | ) % | ||||
Government subsidy income | - | 588 | (588 | ) | (100.0 | ) % | ||||||
Interest and other income | 9 | 2,958 | (2,949 | ) | (99.7 | ) % | ||||||
Other expenses | (8,634 | ) | (1,914 | ) | 6,720 | 351.1 | % | |||||
Interest expense | (713 | ) | (1,430 | ) | (717 | ) | (50.1 | ) % | ||||
Gain from investment | 56,714 | - | 56,714 | 100 | % | |||||||
Income/(Loss) before tax from continuing operations | 46,674 | (6,225 | ) | 52,899 | 849.8 | % | ||||||
Income tax expense/(income) | (49 | ) | 157 | 206 | 131.2- | % | ||||||
Net (loss)/income from continuing operations | 46,724 | (6,382 | ) | 53,106 | 832.1 | % | ||||||
Net (loss) /income from discontinued operations | - | (7,113 | ) | (7,113 | ) | (100.0 | ) % | |||||
Net income (loss) | 46,724 | (13,495 | ) | 60,219 | 446.2 | % | ||||||
Non-controlling interests | - | (1,635 | ) | 1,635 | 100.0 | % | ||||||
Net income of common stockholders | 46,724 | (11,860 | ) | 58,584 | 494.0 | % |
Revenue
Net Revenues. Our net revenue for the nine months ended September 30, 2018 amounted to $2.5 million, which represents a decrease of approximately $1.6 million, or 39.0%, from the nine-month period ended on September 30, 2017, in which our net revenue was $4.1 million. This decrease was attributable to the disposal of, and decreased revenue generated by, certain of our historical subsidiaries.
Cost of Revenues. During the nine months ended September 30, 2018, we experienced a decrease in cost of revenue of $1.9 million, in comparison to the nine months ended September 30, 2017, from approximately $3.5 million to $1.6 million, reflecting a decrease of 54.3% . This decrease was attributable to the decrease in sales.
Gross Profit. Our gross profit increased $0.2 million, or 33.3%, to $0.8 million for the nine months ended September 30, 2018 from $0.6 million for the same period in 2017, attributable to lower cost of revenue.
Operating Expenses
Selling and Marketing Expenses. Our selling and marketing expenses decreased $4.44 million, or 98.7%, to $0.06 million during the third quarter of 2018, as compared to $4.5 million during the same period last year. Our selling and marketing expenses during such period in 2018 consisted primarily of daily sales expenses.
General and Administrative Expenses. We experienced a decrease in general and administrative expense of $1.0 million from $2.5 million to approximately $1.5 million for the nine months ended September 30, 2018, compared to the same period in 2017. General and administrative expenses incurred by PRC subsidiaries to maintain our operation in China decreased during such periods due to the disposaldiscontinue of certain of our subsidiaries.
Government Subsidy Income
Government subsidy income was $0 million for the nine months ended September 30, 2018 compared to $0.6 million during the same period in 2017. Due to poor performance of our historical operations, we were ineligible to receive subsidies during such period.3
Other Expenses
Other expenses, consisting of related party account receivable, was approximately $8.6 million for the nine months ended September 30, 2018, compared to $1.9 million during the nine months ended September 30, 2017. Such increase was attributable to the reorganization and disposal of several subsidiaries which contains a huge amount of related party account receivable.
Interest Expense
Interest expense, consisting of interest payments with respect to our outstanding loans, was $0.7 million for the nine months ended September 30, 2018, compared to $1.4 million during the same period in 2017. Such reductions were attributable to our less loan comparing to the same period of last year.
Gain From Investment
Gain from investment, representing a gain resulting from a recent corporate restructuring, was approximately $56.7 million for the nine months ended September 30, 2018, compared to $0 million during the nine months ended September 30, 2017.
Net Income
Net income increased to $46.7 million for the nine months ended September 30, 2018 from a net loss of $13.5 million for the same period of 2017. The main reasons for the increase of income were the gain form our investment on new subsidiary, Taishan Muren.
Liquidity and Capital Resources
In the reporting period in 2018,2019, our primary sources of financing have been cash generated from operations and private placements of our securities. In addition to the financing transactions described under “Recent Developments” above, we raised funds in the following three private placements during the first quarter of 2018:
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As a result of our recent corporate restructuring, our historical bank loans that have been in default were transferred to Si Chen and are no longer liabilities of ours.
On September 20, 2018, the Company purchased a short-term debt investment in the amount of USD $3,815,541 (RMB26,200,000) issued by Shenzhen Zhongjin Guotai Equity Investment Fund Management Co., Ltd. The investment bears a fixed return of 8% per annum. The investment matures on December 19, 2018. The Board of Directors approved this transaction as a part of the Company’s cash management and short-term investment strategy.
operations. As of September 30, 2018,March 31, 2019, we had cash and cash equivalents (including restricted cash) of $0.1 million.$1,367,758. Our cash and cash equivalents increased by approximately $0.006 million$ 305,115 from September 30, 2017.March 31, 2018. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.
General
Management anticipates that our existing capital resources and cash flows from operations are adequate to satisfy our liquidity requirements for the next 12 months. Our primary capital needs have been to fund our working capital requirements. In the past, our primary sources of financing have been cash generated from operations and financing activities.
As of March 31, 2019 and 2018, cash and cash equivalents (including restricted cash) were $1.36 million and $1.06 million, respectively. The debt to assets ratio was 38.9% and 57.6% as of March 31, 2019 and December 31, 2018, respectively. We expect to continue to finance our operations and working capital needs in 2019 from cash generated from operations and, if needed, private financings. If available liquidity is not sufficient to meet our operating and loan obligations as they come due, 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 be able to 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 Flow (In thousands)
For the Nine Months Ended | ||||||
September 30, | ||||||
2018 | 2017 | |||||
Net cash (used in)/provided by operating activities | (8,427 | ) | 9,267 | |||
Net cash provided by/ (used in) investing activities | (5,427 | ) | (9,352 | ) | ||
Net cash provided by/ (used in) financing activities | 13,928 | (272 | ) | |||
Net cash flow | 25 | (357 | ) |
For the Three Months Ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Net cash (used in)/provided by operating activities | 285 | (1,475 | ) | |||||
Net cash provided by/ (used in) investing activities | - | (3 | ) | |||||
Net cash provided by/ (used in) financing activities | - | 1,275 | ||||||
Net cash flow | 285 | (203 | ) |
Operating Activities
Net cash used in operating activities was $8.4 million and provided by operating activities was $9.3$0.29 million and used by operating activities was $1.5 million for the nine monththree months periods ended September 30,March 31, 2019 and 2018, and 2017, respectively. The decreaseincrease of approximately $0.3$1.76 million in net cash flows used inprovided by operating activities in the ninefirst three months of 20182019 was primarily due to an increasedecreases of $53.1 million in net income, $61.2 from disposal of investment and subsidiaries, $3.1 in accounts and other receivables. An increase of $2.6$3.8 million in accounts and other payables, $21.9decrease of $1.0 million accounts and other receivable, and increase of $0.5 million in advance to suppliers during the current reporting period, and a decreaseprepayment, increase of $28.0$0.5 million in related party payable and $33.7 million in related party receivable.inventories.
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InvestingFinancing Activities
Net cash used in investingfinancing activities for the ninethree months period ended September 30, 2018March 31, 2019 was $5.4$0 million representing a decrease of $4.0$1.3 million in net cash used in investing activitiesfinancing from $9.4$1.3 million for the same period of 2017. The difference was primarily a result of the discontinued operations of our French company, Junan Hongrun, Dongguan Lorain, and Shandong Lorain.
Financing Activities2018.
Net cash provided by financing activities for the nine months period ended September 30, 2018 was $13.9 million, representing an increase of $14.2 million in net cash provided by financing activities from $9.4 million used for the same period of 2017. The difference was primarily a result of investors input raised from the additional capital contribution and private financing.
Loan Facilities
As of September 30, 2018, the amounts and maturity dates for our short-term bank loans are as set forth in the Notes to the Financial Statements. The total amounts outstanding were $5.0 million as of September 30, 2018, compared with $23.4 million as of September 30, 2017.
Critical Accounting Policies
The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make assumptions, estimates and judgments that affect the amounts reported in our financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. We consider our critical accounting policies to be those that require significant judgments and estimates in the preparation of financial statements, including those set forth in Note 2 to the financial statements included herein.
Off-Balance Sheet Arrangements
We do not have any off-balance arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a(15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2018.March 31, 2019. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2018,March 31, 2019, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were not effective due to the continuing material weakness in our internal control over financial reporting.
The material weakness and significant deficiency identified by our management as of September 30, 2018March 31, 2019 relates to the ability of the Company to record transactions and provide disclosures in accordance with U.S. GAAP. We did not have sufficient and skilled accounting personnel with an appropriate level of experience in the application of U.S. GAAP commensurate with our financial reporting requirements. For example, our staff members do not hold licenses such as Certified Public Accountant or Certified Management Accountant in the U.S., have not attended U.S. institutions for training as accountants, and have not attended extended educational programs that would provide sufficient relevant education relating to U.S. GAAP. Our staff will require substantial training to meet the demands of a U.S. public company and our staff’s understanding of the requirements of U.S. GAAP-based reporting is inadequate.
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We plan to provide U.S. GAAP training sessions to our accounting team. The training sessions will be organized to help our corporate accounting team gain experience in U.S. GAAP reporting and to enhance their awareness of new and emerging pronouncements with potential impact over our financial reporting. We plan to continue to recruit experienced and professional accounting and financial personnel and participate in educational seminars, tutorials, and conferences and employ more qualified accounting staff in future.
Changes in Internal Controls over Financial Reporting.
During the ninethree months ended September 30, 2018,March 31, 2019, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations Over Internal Controls.
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On July 12, 2018, the Company entered into a securities purchase agreement with Yunpeng Zhang and Zhongquan Sun, who agreed to invest an aggregate of $750,000 in the Company in exchange for an aggregate of 150,000 shares of the Company’s common stock, representing a purchase price of $5 per share. This financing closed on August 2, 2018.
On August 8, 2018, the Company entered into an amended and restated securities purchase agreement with Yimin Jin, the Company’s chief strategy officer and director, and Hongxiang Yu, the Company’s chairman, chief executive officer and president (collectively, the “Purchasers”), pursuant to which the Purchasers agreed to invest an aggregate of $10 million in the Company in exchange for an aggregate of 2,352,942 shares (on a post-reverse stock split basis) of the Company’s common stock (the “Shares”), representing a purchase price of approximately $4.25 per share (the “Financing”). On October 16, 2018, the Company closed the Financing, which was approved at the Company's 2018 annual meeting of stockholders held on September 26, 2018. At the closing, the Company received gross proceeds of $10,000,000 in the aggregate, in exchange for the issuance of the Shares.None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following exhibits are filed as part of this Report.
ExhibitNo. | Description | |
31.1 | ||
|
* | Filed herewith. |
** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements 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.
Date: | |
PLANET GREEN HOLDINGS CORP. | |
/s/ Hongxiang Yu | |
Hongxiang Yu | |
Chief Executive Officer | |
(Principal Executive Officer) | |
/s/ Yu Li | |
Yu Li | |
Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
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