UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Amendment No. 1)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30,
2024
☐ TRANSITION REPORT PURSUANT TO SECTION 13
or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission File Number: 001-34449
PLANET GREEN HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
Nevada | | 87-0430320 |
(State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization) | | Identification Number) |
130-30 31st Ave, Suite 512
Flushing, NY 11354
(Address of principal executive office and zip
code)
(718) 799-0380
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common Stock, par value $0.001 per share | | PLAG | | NYSE American |
Securities registered pursuant to Section 12(g)
of the Act: None
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes ☒ 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
☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
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
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of outstanding shares of the registrant’s common
stock as of September 30, 2024 was 7,282,714.
Explanatory Note
Planet Green Holdings Corp. (the “Company”)
is filing this Amendment No.1 on Form 10-Q/A for the six months ended June 30, 2024 (this “Form 10-Q/A”).
This Form 10-Q/A amends the Company’s
Quarterly Report on Form 10-Q for the six months ended June 30, 2024, as filed with the Securities and Exchange Commission (“SEC”)
on August 14, 2024 (the “Original Filing”). This Form 10-Q/A is being filed to restate the Company’s unaudited condensed
consolidated financial statements for the six months ended June 30, 2024.
The Management identified an error related
to the disposal of Allinyson Ltd. that incorrectly increased the gain on disposal and reduced the additional paid in capital. The restatement
reflected the correction of the above error, which increased additional paid-in capital, decreased gain on disposal, accumulated deficit
and accumulated other comprehensive income in connection with disposal of the Company’s wholly-owned subsidiary Allinyson Ltd,
on April 1, 2024. These adjustments were evaluated by management in accordance with SEC Staff Accounting Bulletin Topic 1M, “Materiality”
and management determined the effects of the restatement to be material.
The Company is filing this Form 10-Q/A to
amend and restate the Original Filing with modification as necessary to reflect the restatement. The following items have been amended
to reflect the restatement:
Part I, Item 1:
Part I, Item 2:
Part I, Item 4:
In addition, the Company’s Chief Executive
Officer and Chief Financial Officer have provided new certifications dated as of the date of this Form 10-Q/A (Exhibits 31.1, 31.2, 32.1
and 32.2).
Except as otherwise described above and as
otherwise set forth in this Form 10-Q/A, this Form 10-Q/A does not amend, modify or update any other information contained in the Original
Filing. This Form 10-Q/A does not purport to reflect any information or events subsequent to the Original Filing, except as expressly
described herein. Accordingly, this Form 10-Q/A should be read in conjunction with our filings made with the SEC subsequent to the filing
of the Original Filing. Among other things, forward-looking statements and risk factor disclosure in the Original 10-Q have not been
revised to reflect events that occurred or facts that became known to the Company after the filing of the Original Filing, and such forward-looking
statements and risk factors should be read in their historical context.
TABLE OF CONTENT
Caution Regarding Forward-Looking Statements
This quarterly report on Form 10-Q/A 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” described on the Registration Statement on Form S-3 filed by the Company on September 17, 2021,
and as subsequently amended, together with the other information contained in this report. If any of the events descripted in the risk
factors occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading
price of our securities could decline, and you could lose all or part of your investment.
In some cases, you can identify forward-looking
statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,”
“intends,” “may,” “plans,” “potential,” “predicts,” “projects,”
“should,” “would” or the negative of such terms or other similar expressions intended to identify forward-looking
statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject
to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also,
forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report completely
and with the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation
to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated
in any forward-looking statements, even if new information becomes available in the future.
PART I
Use of Certain Defined Terms
Except where the context otherwise requires and
for the purposes of this report only:
|
● |
“Anhui Ansheng” refers to Anhui Ansheng Petrochemical Equipment Co., Ltd., a company incorporated in China. |
|
|
|
|
● |
“Allinyson” refers to Allinyson Ltd., a company incorporated in the State of Colorado. |
|
|
|
|
● |
“Bless Chemical” refers to Bless Chemical Co., Ltd., a company incorporated in Hong Kong. |
|
|
|
|
● |
“Baokuan Hong Kong” refers to Baokuan Technology (Hong Kong) Limited, a company incorporated in Hong Kong. |
|
|
|
|
● |
“China” and “PRC” refer to the People’s Republic of China (excluding Hong Kong, Macau and Taiwan for the purposes of this report only). |
|
● |
“Fast Approach” refers to Fast Approach Inc., a corporation incorporated under the laws of Canada. |
|
|
|
|
● |
“Hubei Bulaisi” Refers to Hubei Bulaisi
Technology Co., Ltd., a PRC limited liability company.
|
|
|
|
|
● |
“Guangzhou Haishi” refers to Guangzhou Haishi Technology Co., Ltd., a PRC limited liability company. |
|
|
|
|
● |
“Jiayi Technologies” or “WFOE” refers to Jiayi Technologies (Xianning) Co., Ltd., a PRC limited liability company and a wholly foreign-owned enterprise, formerly known as Lucky Sky Petrochemical Technology (Xianning) Co. Ltd. |
|
● |
“Jilin Chuangyuan” refers to Jilin Chuangyuan Chemical Co., Ltd., a PRC limited liability company. |
|
● |
“Jingshan Sanhe” refers to Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd., a PRC limited company. |
|
● |
“Promising Prospect HK” refers to
Promising Prospect HK Limited, formerly known as Lucky Sky Planet Green Holdings Co., Limited, a company incorporated in Hong Kong.
|
|
|
|
|
● |
“PLAG,” “we,” “us”, “our,” “Planet Green” and the “Company” refer to Planet Green Holdings Corp., a Nevada corporation, and except where the context requires otherwise, our wholly-owned subsidiaries and VIEs. |
|
|
|
|
● |
“Promising Prospect BVI” refers to Promising Prospect Limited, formerly known as Planet Green Holdings Corporation, a British Virgin Islands company. |
|
● |
“RMB” refers to Renminbi, the legal currency of China. |
|
● |
“Shanghai Shuning” refers to Shanghai Shuning Advertising Co., Ltd., a PRC limited liability company. |
|
● |
“Shandong Yunchu” Refers to Shandong Yunchu Supply Chain Co., Ltd., a PRC limited liability company. |
|
● |
“U.S. dollar”, “$” and “US$” refer to the legal currency of the United States. |
|
● |
“VIE” refers to variable interest entity. |
|
● |
“Xianning Bozhuang” refers to Xianning Bozhuang Tea Products Co., Ltd., a PRC limited liability company. |
|
|
|
|
● |
“Shine Chemical” refers to Shine Chemical Co., Ltd., a company incorporated in British Islands. |
Item
1 - Financial Statements.
PLANET GREEN HOLDINGS CORP.
CONSOLIDATED FINANCIAL STATEMENTS
(Stated in US Dollars)
Planet Green Holdings Corp.
Condensed Consolidated
Balance Sheets
| |
June 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
Assets | |
(Unaudited) | | |
| |
Current assets | |
| | |
| |
Cash and cash equivalents | |
$ | 539,744 | | |
$ | 270,317 | |
Restricted cash | |
| 19,189 | | |
| - | |
Accounts receivable, net | |
| 3,798,197 | | |
| 3,114,893 | |
Inventories | |
| 2,177,664 | | |
| 1,953,063 | |
Advances to suppliers | |
| 3,211,442 | | |
| 5,316,195 | |
Other receivables | |
| 350,913 | | |
| 349,984 | |
Other receivables-related parties | |
| 1,968,784 | | |
| 315,724 | |
Prepaid expenses | |
| 1,262,360 | | |
| 978,803 | |
Assets classified as held for sale | |
| - | | |
| 211,498 | |
Total current assets | |
| 13,328,293 | | |
| 12,510,477 | |
| |
| | | |
| | |
Non-current assets | |
| | | |
| | |
Plant and equipment, net | |
| 19,184,650 | | |
| 20,271,844 | |
Intangible assets, net | |
| 2,726,154 | | |
| 2,834,102 | |
Construction in progress, net | |
| 30,756 | | |
| 30,948 | |
Long-term investments | |
| 2,243,954 | | |
| 2,257,926 | |
Goodwill | |
| 4,724,699 | | |
| 4,724,699 | |
Total non-current assets | |
| 28,910,213 | | |
| 30,119,519 | |
| |
| | | |
| | |
Total assets | |
$ | 42,238,506 | | |
$ | 42,629,996 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Equity | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Loans-current | |
$ | 1,443,425 | | |
$ | - | |
Accounts payable | |
| 3,787,019 | | |
| 3,328,344 | |
Advance from customers | |
| 2,465,754 | | |
| 2,464,319 | |
Taxes payable | |
| 1,254,898 | | |
| 1,243,060 | |
Other payables and accrued liabilities | |
| 4,534,229 | | |
| 4,484,453 | |
Other payables-related parties | |
| 7,922,110 | | |
| 7,111,257 | |
Deferred income | |
| 13,330 | | |
| 36,334 | |
Liabilities directly associated
with assets classified as held for sale | |
| - | | |
| 517,930 | |
Total current liabilities | |
| 21,420,765 | | |
| 19,185,697 | |
| |
| | | |
| | |
Non-current liabilities | |
| | | |
| | |
Other long-term liabilities | |
| 119,908 | | |
| 191,981 | |
Loans-noncurrent | |
| 4,167,369 | | |
| 3,812,106 | |
Total non-current liabilities | |
| 4,287,277 | | |
| 4,004,087 | |
| |
| | | |
| | |
Total liabilities | |
$ | 25,708,042 | | |
$ | 23,189,784 | |
Commitments and contingencies | |
| | | |
| | |
Stockholders’ equity | |
| | | |
| | |
Preferred stock: $0.001 par value, 10,000,000 shares authorized; none issued and outstanding as of June 30, 2024 and December 31, 2023 | |
| - | | |
| - | |
Common stock: $0.001 par value, 100,000,000 shares authorized; 7,282,714 and 7,282,714 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.* | |
| 7,283 | | |
| 7,283 | |
Additional paid-in capital | |
| 155,767,774 | | |
| 155,767,774 | |
Accumulated deficit | |
| (143,526,095 | ) | |
| (140,724,597 | ) |
Accumulated other comprehensive income | |
| 4,281,502 | | |
| 4,389,752 | |
| |
| | | |
| | |
Total stockholders’ equity | |
$ | 16,530,464 | | |
$ | 19,440,212 | |
| |
| | | |
| | |
Total liabilities and stockholders’
equity | |
$ | 42,238,506 | | |
$ | 42,629,996 | |
See Accompanying Notes
to the Unaudited Condensed Consolidated Financial Statements
Planet Green Holdings Corp.
Unaudited Condensed Consolidated Statements
of Operations and Comprehensive Loss
| |
For the Three Months Ended
June 30, | | |
For the Six Months Ended
June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Net revenues | |
$ | 1,945,211 | | |
$ | 4,363,474 | | |
$ | 3,475,978 | | |
$ | 11,920,978 | |
Cost of revenues | |
| 1,877,906 | | |
| 4,239,263 | | |
| 3,045,868 | | |
| 11,582,167 | |
Gross profit | |
| 67,305 | | |
| 124,211 | | |
| 430,110 | | |
| 338,811 | |
| |
| | | |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | | |
| | |
Selling and marketing expenses | |
| 33,998 | | |
| 242,718 | | |
| 74,528 | | |
| 487,437 | |
General and administrative expenses | |
| 1,222,598 | | |
| 982,555 | | |
| 2,426,299 | | |
| 2,073,166 | |
Research and development expenses | |
| 32,287 | | |
| 65,188 | | |
| 77,985 | | |
| 133,907 | |
Total operating expenses | |
| 1,288,883 | | |
| 1,290,461 | | |
| 2,578,812 | | |
| 2,694,510 | |
| |
| | | |
| | | |
| | | |
| | |
Operating loss | |
| (1,221,578 | ) | |
| (1,166,250 | ) | |
| (2,148,702 | ) | |
| (2,355,699 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other (expenses) income | |
| | | |
| | | |
| | | |
| | |
Interest income | |
| 72 | | |
| 46 | | |
| 307 | | |
| 150 | |
Interest expenses | |
| (191,491 | ) | |
| (129,521 | ) | |
| (314,538 | ) | |
| (245,734 | ) |
Other income | |
| 50,541 | | |
| 62,483 | | |
| 54,991 | | |
| 101,198 | |
Other expenses | |
| (747,193 | ) | |
| (2,980 | ) | |
| (748,666 | ) | |
| (3,419 | ) |
Loss on disposal of equity investments | |
| - | | |
| (10,848,632 | ) | |
| - | | |
| (10,848,632 | ) |
Total other expenses | |
| (888,071 | ) | |
| (10,918,604 | ) | |
| (1,007,906 | ) | |
| (10,996,437 | ) |
| |
| | | |
| | | |
| | | |
| | |
Loss before income taxes | |
| (2,109,649 | ) | |
| (12,084,854 | ) | |
| (3,156,608 | ) | |
| (13,352,136 | ) |
| |
| | | |
| | | |
| | | |
| | |
Income tax expenses | |
| - | | |
| (31,074 | ) | |
| - | | |
| (78,698 | ) |
| |
| | | |
| | | |
| | | |
| | |
Loss from continuing operations | |
| (2,109,649 | ) | |
| (12,115,928 | ) | |
| (3,156,608 | ) | |
| (13,430,834 | ) |
| |
| | | |
| | | |
| | | |
| | |
Discontinued operations: | |
| | | |
| | | |
| | | |
| | |
Income (loss) from discontinued operations | |
| 389,055 | | |
| (83,720 | ) | |
| 355,110 | | |
| (54,185 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
| (1,720,594 | ) | |
| (12,199,648 | ) | |
| (2,801,498 | ) | |
| (13,485,019 | ) |
| |
| | | |
| | | |
| | | |
| | |
Less: Net loss attributable to non-controlling interest | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Net loss attributable to common shareholders | |
$ | (1,720,594 | ) | |
$ | (12,199,648 | ) | |
$ | (2,801,498 | ) | |
$ | (13,485,019 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
| (1,720,594 | ) | |
| (12,199,648 | ) | |
| (2,801,498 | ) | |
| (13,485,019 | ) |
| |
| | | |
| | | |
| | | |
| | |
Foreign currency translation adjustment | |
| (81,119 | ) | |
| (1,116,356 | ) | |
| (108,250 | ) | |
| (784,746 | ) |
| |
| | | |
| | | |
| | | |
| | |
Total comprehensive loss | |
| (1,801,713 | ) | |
| (13,316,004 | ) | |
| (2,909,748 | ) | |
| (14,269,765 | ) |
| |
| | | |
| | | |
| | | |
| | |
Earnings (loss) per common share of common stock - basic and diluted* | |
| | | |
| | | |
| | | |
| | |
Continuing operations | |
$ | (0.29 | ) | |
$ | (1.66 | ) | |
$ | (0.43 | ) | |
$ | (1.84 | ) |
Discontinued operations | |
$ | 0.05 | | |
$ | (0.01 | ) | |
$ | 0.05 | | |
$ | (0.01 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 7,282,714 | | |
| 7,282,714 | | |
| 7,282,714 | | |
| 7,282,714 | |
See Accompanying Notes
to the Unaudited Condensed Consolidated Financial Statements
Planet
Green Holdings Corp.
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Three Months Ended June 30, 2024 and 2023
| |
| | |
| | |
| | |
| | |
Accumulated | | |
| |
| |
| | |
| | |
Additional | | |
| | |
Other | | |
| |
| |
Common Stock | | |
Paid-in | | |
Accumulated | | |
Comprehensive | | |
| |
| |
Shares* | | |
Amount | | |
Capital | | |
Deficit | | |
Income | | |
Total | |
Balance, March 31, 2023 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (121,166,172 | ) | |
$ | 5,023,852 | | |
$ | 39,632,737 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (12,199,648 | ) | |
| - | | |
| (12,199,648 | ) |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,116,356 | ) | |
| (1,116,356 | ) |
Balance, June 30, 2023 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (133,365,820 | ) | |
$ | 3,907,496 | | |
$ | 26,316,733 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, March 31, 2024 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (141,805,501 | ) | |
$ | 4,362,621 | | |
$ | 18,332,177 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (1,720,594 | ) | |
| - | | |
| (1,720,594 | ) |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (81,119 | ) | |
| (81,119 | ) |
Balance, June 30, 2024 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (143,526,095 | ) | |
$ | 4,281,502 | | |
$ | 16,530,464 | |
See
Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements
Planet
Green Holdings Corp.
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Six Months Ended June 30, 2024 and 2023
| |
| | |
| | |
| | |
| | |
Accumulated | | |
| |
| |
| | |
| | |
Additional | | |
| | |
Other | | |
| |
| |
Common Stock | | |
Paid-in | | |
Accumulated | | |
Comprehensive | | |
| |
| |
Shares* | | |
Amount | | |
Capital | | |
Deficit | | |
Income | | |
Total | |
Balance, January 1, 2023 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (119,880,801 | ) | |
$ | 4,692,242 | | |
$ | 40,586,498 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (13,485,019 | ) | |
| - | | |
| (13,485,019 | ) |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (784,746 | ) | |
| (784,746 | ) |
Balance, June 30, 2023 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (133,365,820 | ) | |
$ | 3,907,496 | | |
$ | 26,316,733 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, January 1, 2024 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (140,724,597 | ) | |
$ | 4,389,752 | | |
$ | 19,440,212 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (2,801,498 | ) | |
| - | | |
| (2,801,498 | ) |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (108,250 | ) | |
| (108,250 | ) |
Balance, June 30, 2024 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (143,526,095 | ) | |
$ | 4,281,502 | | |
$ | 16,530,464 | |
| * | Prior period results
have been adjusted to reflect the reverse stock split effected on May 31, 2024 |
See
Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements
Planet Green Holdings Corp.
Unaudited Condensed Consolidated Statements of Cash Flows
| |
For the Six Months Ended June
30, | |
| |
2024 | | |
2023 | |
CASH FLOWS FROM OPFRATING ACTIVITIFS: | |
| | |
| |
| |
| | |
| |
Net loss | |
$ | (2,801,498 | ) | |
$ | (13,485,019 | ) |
Adjustments to reconcile net income (loss) to cash (used
in) provided by operating activities: | |
| | | |
| | |
Depreciation | |
| 958,969 | | |
| 1,038,757 | |
Amortization | |
| 90,688 | | |
| 60,314 | |
Loss on disposal of equity investments | |
| - | | |
| 10,848,632 | |
Gain on disposal of subsidiary | |
| (189,044 | ) | |
| - | |
Changes in operating assets and liabilities, net of effects
of acquisitions and disposals: | |
| | | |
| | |
Accounts receivables, net | |
| (690,160 | ) | |
| 48,800 | |
Inventories | |
| (237,407 | ) | |
| 362,305 | |
Prepayments and deposit | |
| 1,815,371 | | |
| (3,248,171 | ) |
Other receivables | |
| (19,865 | ) | |
| (41,407 | ) |
Accounts payable | |
| 506,753 | | |
| - | |
Advance from customer | |
| (117,075 | ) | |
| 1,357,209 | |
Other payables and accrued liabilities | |
| 53,928 | | |
| 576,796 | |
Taxes payable | |
| (8,988 | ) | |
| 249,706 | |
Deferred income | |
| (22,539 | ) | |
| (8,032 | ) |
Net cash used in operating activities | |
| (660,867 | ) | |
| (2,240,110 | ) |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
Purchase of plant and equipment | |
| 5,683 | | |
| (20,857 | ) |
Proceeds from disposal of equity method investments | |
| - | | |
| 2,770,000 | |
Net decrease in cash from disposal
of subsidiaries | |
| (166,066 | ) | |
| - | |
Net cash (used in) provided by investing
activities | |
| (160,383 | ) | |
| 2,749,143 | |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Proceeds from long-term loans | |
| 1,757,361 | | |
| (39,521 | ) |
Changes in related party balances,
net | |
| (816,191 | ) | |
| 73,426 | |
Net cash provided by financing activities | |
| 941,170 | | |
| 33,905 | |
| |
| | | |
| | |
Net increase in cash and cash equivalents | |
| 119,920 | | |
| 542,938 | |
| |
| | | |
| | |
EFFECT OF EXCHANGE RATE ON CASH | |
| 2,630 | | |
| 76,771 | |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH AT BEGINNING OF YEAR | |
| 436,383 | | |
| 93,487 | |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH AT END OF YEAR | |
$ | 558,933 | | |
$ | 713,196 | |
| |
| | | |
| | |
SUPPLEMENTARY OF CASH FLOW INFORMATION | |
| | | |
| | |
Interest received | |
$ | 307 | | |
$ | 365 | |
Interest paid | |
$ | 314,538 | | |
$ | 245,734 | |
See
Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements
PLANET GREEN HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023
1. Organization and Principal Activities
Planet Green Holdings Corp. (the “Company” or “PLAG”)
is a holding company incorporated in Nevada. We are engaged in various businesses through our subsidiaries and VIE entities in
China.
On May 18, 2018, the Company incorporated Promising Prospect BVI Limited
(“Planet Green BVI”), a limited company incorporated in the British Virgin Islands.
On September 28, 2018, Planet Green BVI acquired Lucky Sky HK through
the Company’s restructuring plans.
On May 9, 2019, the Company issued an aggregate of 1,080,000 shares
of Planet Green Holdings Corporation’s common stock to the BoZhuang Shareholders, in exchange for BoZhuang Shareholders’ agreement
to enter into VIE Agreements (the “BoZhuang VIE Agreements”). On August 1, 2021, the VIE agreements with Xianning Bozhuang
Tea Products Co., Ltd was terminated and the company acquired 100% equity of Xianning Bozhuang Tea Products Co., Ltd.
On August 12, 2019, through Lucky Sky HK, the Company established Lucky
Sky Petrochemical, a wholly foreign-owned enterprise incorporated in Xianning City, Hubei Province, China. On December 9, 2020, Lucky
Sky Petrochemical Technology (Xianning) Co., Ltd. changed its name to Jiayi Technologies (Xianning) Co., Ltd. (“Jiayi Technologies”
or “WFOE”)
On May 29, 2020, the Promising Prospect BVI Limited incorporated Lucky
Sky Planet Green Holdings Co., Limited, a limited company incorporated in Hong Kong.
On June 5, 2020, the Promising Prospect BVI Limited acquired all of
the outstanding equity interests of Fast Approach Inc. It was incorporated under Canada’s laws and the operation of a demand-side
platform targeting the Chinese education market in North America.
On June 16, 2020, Lucky Sky Holdings Corporations (H.K.) transferred
its 100% equity interest in Lucky Sky Petrochemical to Lucky Sky Planet Green Holdings Co., Limited (H.K.).
On August 10, 2020, Promising Prospect BVI Limited disposed of its
100% equity interest in Lucky Sky Holdings Corporations (H.K.).
On January 6, 2021, Planet Green Holdings Corporation (Nevada) issued
an aggregate of 2,200,000 shares of common stock of the Company to the equity holders of Jingshan Sanhe Luckysky New Energy Technologies
Co., Ltd in exchange for the transfer of 85% of the equity interest of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd to the
Jiayi Technologies (Xianning) Co., Ltd.
On March 9, 2021, Planet Green Holdings Corporation (Nevada) issued
an aggregate of 3,300,000 shares of common stock of the Company to the equity holders of Jilin Chuangyuan Chemical Co., Ltd. in exchange
for the transfer of 75% of the equity interest of Jilin Chuangyuan Chemical Co., Ltd. to the Jiayi Technologies (Xianning) Co., Ltd.
On July 15, 2021, Planet Green Holdings Corporation (Nevada) issued
an aggregate of 4,800,000 shares of common stock of the Company to the equity holders of Anhui Ansheng Petrochemical Equipment Co., Ltd.
for the transfer to 66% of the equity interest if Anhui Ansheng Petrochemical Equipment Co., Ltd. to the Jiayi Technologies (Xianning)
Co., Ltd. On December 12, 2022, Anhui Ansheng Petrochemical Equipment Co., Ltd. was disposed.
On August 3, 2021, the Planet Green Holding Corp has acquired 8,000,000
ordinary shares of the Shine Chemical Co., Ltd. As a result, Shine Chemical Co., Ltd., Bless Chemical Co., Ltd. and Hubei Bryce Technology
Co., Ltd. have been wholly-owned subsidiaries of the Planet Green Holding Corp.
On September 1, 2021, Jingshan Sanhe
Luckysky New Energy Technologies Co., Ltd. has changed its major shareholder from Mr. Feng Chao to Hubei Bryce Technology Co., Ltd.
and Hubei Bryce Technology Co., Ltd. has hold 85% shares of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. after the
alteration of shareholders.
On December 9, 2021, Planet Green Holdings
Corporation (Nevada) issued an aggregate of 5,900,000 shares of common stock to the equity holders of Shandong Yunchu Supply Chain
Co., Ltd. for the transfer to 100% of the equity interest of Shandong Yunchu Supply Chain Co., Ltd. to the Jiayi Technologies
(Xianning) Co., Ltd.
On April 8, 2022, Planet Green Holdings Corporation (Nevada) issued
an aggregate of 7,500,000 shares of common stock to the equity holders of Allinyson Ltd. for the acquisition of 100% of
the equity interest of Allinyson Ltd., including its wholly-owned subsidiary Baokuan Technology (Hongkong) Limited. On April 1, 2024,
Allinyson Ltd. has completely been disposed.
On September 14, 2022, Planet Green Holdings Corp. and Hubei Bulaisi
Technology Co., Ltd. a subsidiary of the Company, entered into a Share Purchase Agreement with Xue Wang, a shareholder of Jingshan Sanhe
Luckysky New Energy Technologies Co., Ltd., pursuant to which, among other things and subject to the terms and conditions contained therein, the
Purchaser agreed to effect share purchase from the Seller of 15% of the outstanding equity interests of Jingshan, and the Company shall
pay to the Seller an aggregate of U.S. $3,000,000 in exchange for 15% of the issued and outstanding shares. Before the closing of this
Share Purchase transaction, the Company owns 85% equity interest of Jingshan through the Purchaser. On September 14, 2022, the Company
closed the Share Purchase transaction. As of September 30, 2022, Hubei Bryce Technology Co., Ltd. has hold 100% shares
of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. after the alteration of shareholders.
Consolidation of Variable Interest Entity
On March 9, 2021, through Jiayi Technologies
(Xianning) Co., Ltd., formerly known as Lucky Sky Petrochemical Technology (Xianning) Co., Ltd., the Company entered into exclusive
VIE agreements (“VIE Agreements”) with Jilin Chuangyuan Chemical Co., Ltd., as well as its shareholders, which gave the
Company the ability to substantially influence those companies’ daily operations and financial affairs and appointment of its senior executives. The Company is considered the primary beneficiary of these operating companies, and it consolidates their
accounts as VIEs.
The VIE Agreement is described in detail below
Consultation and Service Agreement
Under the Consultation and Service Agreement, WFOE has the exclusive
right to provide consultation and services to the operating entities in China in business management, human resource, technology, and
intellectual property rights. WFOE exclusively owns any intellectual property rights arising from the performance of this Consultation
and Service Agreement. The number of service fees and payment terms can be amended by the WFOE and operating companies’ consultation
and implementation. The duration of the Consultation and Service Agreement is 20 years. WFOE may terminate this agreement at any time
by giving 30 day’s prior written notice.
Business Cooperation Agreement
Pursuant to the Business Cooperation Agreement, WFOE has the exclusive
right to provide complete technical support, business support, and related consulting services, including but not limited to specialized
services, business consultations, equipment or property leasing, marketing consultancy, system integration, product research and development,
and system maintenance. WFOE exclusively owns any intellectual property rights arising from the performance of this Business Cooperation
Agreement. The rate of service fees may be adjusted based on the services rendered by WFOE in that month and the operational needs of
the operating entities. The Business Cooperation Agreement shall maintain effective unless it was terminated or was compelled to release
under applicable PRC laws and regulations. WFOE may terminate this Business Cooperation Agreement at any time by giving 30 day’s
prior written notice.
Equity Pledge Agreements
According to the Equity Pledge Agreements among WFOE, operating entities,
and each of operating entities’ shareholders, shareholders of the operating entities pledge all of their equity interests in the
functional entities to WFOE to guarantee their performance of relevant obligations and indebtedness under the Technical Consultation and
Service Agreement and other control agreements.
Equity Option Agreements
According to the Equity Option Agreements, WFOE has the exclusive right
to require each shareholder of the operating companies to fulfill and complete all approval and registration procedures required under
PRC laws for WFOE to purchase or designate one or more persons to buy, each shareholder’s equity interests in the operating companies,
once or at multiple times at any time in part or in whole at WFOE’s sole and absolute discretion. The purchase price shall be the
lowest price allowed by PRC laws. The Equity Option Agreements shall remain effective until all the equity interest owned by each operating
entity shareholder has been legally transferred to WFOE or its designee(s).
Voting Rights Proxy Agreements
According to the Voting Rights Proxy Agreements, each shareholder irrevocably
appointed WFOE or WFOE’s designee to exercise all his or her rights as the shareholders of the operating entities under the Articles
of Association of each operating entity, including but not limited to the power to exercise all shareholder’s voting rights concerning
all matters to be discussed and voted in the shareholders’ meeting. The term of each Voting Rights Proxy Agreement is 20 years.
WOFE has the right to extend each Voting Proxy Agreement by giving written notification.
Based on the foregoing contractual arrangements, The Company consolidates
the accounts of Xianning Bozhuang Tea Products Co., Ltd, Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. and Jilin Chuangyuan
Chemical Co., Ltd. in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting
Standards Codification (“ASC”) 810-10, Consolidation.
Enterprise-Wide Disclosure
The Company’s chief operating decision-makers (i.e. chief executive
officer and her direct reports) review financial information presented on a consolidated basis, accompanied by disaggregated information
about revenues by business lines for purposes of allocating resources and evaluating financial performance. There are no segment managers
who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based
on qualitative and quantitative criteria established by Accounting Standards Codification (“ASC”) 280, “Segment Reporting”,
the Company considers itself to be operating within one reportable segment.
Going Concern
The accompanying unaudited condensed consolidated
financial statements have been prepared assuming that the Company will continue as a going concern; however, the Company has incurred
a net loss of $3,156,608 from continuing operations for the six months ended June 30, 2024. As of June 30, 2024 the Company had an accumulated
deficit of $143,526,095, a working capital deficit of $8,092,472, its net cash used in operating activities for the six months ended
June 30, 2024 was $660,867.
These factors raise substantial doubt on the Company’s ability
to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from
the outcome of this uncertainty. Management’s plan for the Company’s continued existence is dependent upon management’s
ability to execute the business plan, develop the plan to generate profit; additionally, Management may need to continue to rely on private
placements or certain related parties to provide funding for investment, for working capital and general corporate purposes. If management
is unable to execute its plan, the Company may become insolvent.
2. Restatement of Previously Issued Financial
Statements
On September 30, 2024, the Company’s
management, in consultation with its advisors, concluded that the Company’s previously issued unaudited condensed consolidated
financial statements contained within the Quarterly Report on Form 10-Q for the period ended June 30, 2024 should no longer be relied
upon due to an error related to the disposal of the Company’s wholly-owned subsidiary Allinyson Ltd, on April 1, 2024, and that
we would restate such financial statements to make the necessary accounting corrections. Details of the restated condensed consolidated
financial statements for the three and six months ended June 30, 2024, are provided below (“Restatement Items”).
Restatement Items
The Company incorrectly recognized income
from discontinued operations in additional paid in capital in connection with disposal of Allinyson Ltd. The corrections resulted in
a $7,407,267 decrease in income from discontinued operation, a $7,422,000 increase in additional paid-in capital, a $7,407,267 decrease
in accumulated deficit and a $14,733 decrease in accumulated other comprehensive income.
The following tables present the effect of
the Restatement Items on the Company’s condensed consolidated balance sheet as of June 30, 2024:
| |
As
of June 30, 2024 (Unaudited) | |
| |
As Previously Reported | | |
Restatement Adjustments | | |
As Restated | |
Assets | |
| | |
| | |
| |
Current assets | |
| | |
| | |
| |
Cash and cash equivalents | |
$ | 539,744 | | |
$ | - | | |
$ | 539,744 | |
Restricted cash | |
| 19,189 | | |
| - | | |
| 19,189 | |
Accounts receivable, net | |
| 3,798,197 | | |
| - | | |
| 3,798,197 | |
Inventories | |
| 2,177,664 | | |
| - | | |
| 2,177,664 | |
Advances to suppliers | |
| 3,211,442 | | |
| - | | |
| 3,211,442 | |
Other receivables | |
| 350,913 | | |
| - | | |
| 350,913 | |
Other receivables-related parties | |
| 1,968,784 | | |
| - | | |
| 1,968,784 | |
Prepaid expenses | |
| 1,262,360 | | |
| - | | |
| 1,262,360 | |
Total current assets | |
| 13,328,293 | | |
| - | | |
| 13,328,293 | |
| |
| | | |
| | | |
| | |
Non-current assets | |
| | | |
| | | |
| | |
Plant and equipment, net | |
| 19,184,650 | | |
| - | | |
| 19,184,650 | |
Intangible assets, net | |
| 2,726,154 | | |
| - | | |
| 2,726,154 | |
Construction in progress, net | |
| 30,756 | | |
| - | | |
| 30,756 | |
Long-term investments | |
| 2,243,954 | | |
| - | | |
| 2,243,954 | |
Goodwill | |
| 4,724,699 | | |
| - | | |
| 4,724,699 | |
Total non-current assets | |
| 28,910,213 | | |
| - | | |
| 28,910,213 | |
| |
| | | |
| | | |
| | |
Total assets | |
$ | 42,238,506 | | |
$ | - | | |
$ | 42,238,506 | |
| |
| | | |
| | | |
| | |
Liabilities and Stockholders’
Equity | |
| | | |
| | | |
| | |
Current liabilities | |
| | | |
| | | |
| | |
Loans-current | |
$ | 1,443,425 | | |
$ | - | | |
$ | 1,443,425 | |
Accounts payable | |
| 3,787,019 | | |
| - | | |
| 3,787,019 | |
Advance from customers | |
| 2,465,754 | | |
| - | | |
| 2,465,754 | |
Taxes payable | |
| 1,254,898 | | |
| - | | |
| 1,254,898 | |
Other payables and accrued liabilities | |
| 4,534,229 | | |
| - | | |
| 4,534,229 | |
Other payables-related parties | |
| 7,922,110 | | |
| - | | |
| 7,922,110 | |
Deferred income | |
| 13,330 | | |
| - | | |
| 13,330 | |
Total current liabilities | |
| 21,420,765 | | |
| - | | |
| 21,420,765 | |
| |
| | | |
| | | |
| | |
Non-current liabilities | |
| | | |
| | | |
| | |
Other long-term liabilities | |
| 119,908 | | |
| - | | |
| 119,908 | |
Loans-noncurrent | |
| 4,167,369 | | |
| - | | |
| 4,167,369 | |
Total non-current liabilities | |
| 4,287,277 | | |
| - | | |
| 4,287,277 | |
| |
| | | |
| - | | |
| | |
Total liabilities | |
$ | 25,708,042 | | |
$ | - | | |
$ | 25,708,042 | |
Commitments and contingencies | |
| | | |
| | | |
| | |
Stockholders’ equity | |
| | | |
| | | |
| | |
Preferred stock: $0.001 par value, 10,000,000 shares authorized; none
issued and outstanding as of June 30, 2024 | |
| - | | |
| - | | |
| - | |
Common stock: $0.001 par value, 100,000,000 shares authorized; 7,282,714
shares issued and outstanding as of June 30, 2024 | |
| 7,283 | | |
| - | | |
| 7,283 | |
Additional paid-in capital | |
| 148,345,774 | | |
| 7,422,000 | | |
| 155,767,774 | |
Accumulated deficit | |
| (136,118,828 | ) | |
| (7,407,267 | ) | |
| (143,526,095 | ) |
Accumulated other comprehensive income | |
| 4,296,235 | | |
| (14,733 | ) | |
| 4,281,502 | |
| |
| | | |
| | | |
| | |
Total stockholders’ equity | |
$ | 16,530,464 | | |
$ | - | | |
$ | 16,530,464 | |
| |
| | | |
| | | |
| | |
Total liabilities and stockholders’
equity | |
$ | 42,238,506 | | |
$ | - | | |
$ | 42,238,506 | |
See Accompanying Notes to the Unaudited Condensed
Consolidated Financial Statements
The following tables present the effect of
the Restatement Items on the Company’s condensed consolidated statement of operations for the three months ended June 30, 2024:
| |
For
the Three Months Ended June 30, 2024 (Unaudited) | |
| |
As Previously Reported | | |
Restatement Adjustments | | |
As Restated | |
Net revenues | |
$ | 1,945,211 | | |
$ | - | | |
$ | 1,945,211 | |
Cost of revenues | |
| 1,877,906 | | |
| - | | |
| 1,877,906 | |
Gross profit | |
| 67,305 | | |
| - | | |
| 67,305 | |
| |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | |
Selling and marketing expenses | |
| 33,998 | | |
| - | | |
| 33,998 | |
General and administrative expenses | |
| 1,222,598 | | |
| - | | |
| 1,222,598 | |
Research and development expenses | |
| 32,287 | | |
| - | | |
| 32,287 | |
Total operating expenses | |
| 1,288,883 | | |
| - | | |
| 1,288,883 | |
| |
| | | |
| | | |
| | |
Operating loss | |
| (1,221,578 | ) | |
| - | | |
| (1,221,578 | ) |
| |
| | | |
| | | |
| | |
Other (expenses) income | |
| | | |
| | | |
| | |
Interest income | |
| 72 | | |
| - | | |
| 72 | |
Interest expenses | |
| (191,491 | ) | |
| - | | |
| (191,491 | ) |
Other income | |
| 50,541 | | |
| - | | |
| 50,541 | |
Other expenses | |
| (747,193 | ) | |
| - | | |
| (747,193 | ) |
Total other expenses | |
| (888,071 | ) | |
| - | | |
| (888,071 | ) |
| |
| | | |
| | | |
| | |
Loss before income taxes | |
| (2,109,649 | ) | |
| - | | |
| (2,109,649 | ) |
| |
| | | |
| | | |
| | |
Income tax expenses | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | |
Loss from continuing operations | |
| (2,109,649 | ) | |
| - | | |
| (2,109,649 | ) |
| |
| | | |
| | | |
| | |
Discontinued operations: | |
| | | |
| | | |
| | |
Income from discontinued operations | |
| 7,796,322 | | |
| (7,407,267 | ) | |
| 389,055 | |
| |
| | | |
| | | |
| | |
Net loss | |
| 5,686,673 | | |
| (7,407,267 | ) | |
| (1,720,594 | ) |
| |
| | | |
| | | |
| | |
Less: Net loss attributable to non-controlling interest | |
| - | | |
| | | |
| - | |
| |
| | | |
| | | |
| | |
Net loss attributable to common shareholders | |
$ | 5,686,673 | | |
$ | (7,407,267 | ) | |
$ | (1,720,594 | ) |
| |
| | | |
| | | |
| | |
Net loss | |
| 5,686,673 | | |
| (7,407,267 | ) | |
| (1,720,594 | ) |
| |
| | | |
| | | |
| | |
Foreign currency translation adjustment | |
| (66,386 | ) | |
| (14,733 | ) | |
| (81,119 | ) |
| |
| | | |
| | | |
| | |
Total comprehensive loss | |
| 5,620,287 | | |
| (7,422,000 | ) | |
| (1,801,713 | ) |
| |
| | | |
| | | |
| | |
Earnings (loss) per common share of common stock - basic and diluted | |
| | | |
| | | |
| | |
Continuing operations | |
$ | (0.29 | ) | |
$ | - | | |
$ | (0.29 | ) |
Discontinued operations | |
$ | 1.07 | | |
$ | (1.02 | ) | |
$ | 0.05 | |
| |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 7,282,714 | | |
| 7,282,714 | | |
| 7,282,714 | |
See Accompanying Notes to the Unaudited Condensed
Consolidated Financial Statements
The following tables present the effect of
the Restatement Items on the Company’s condensed consolidated statement of operations for the six months ended June 30, 2024:
| |
For
the Six Months Ended June 30, 2024 (Unaudited) | |
| |
As Previously Reported | | |
Restatement Adjustments | | |
As Restated | |
Net revenues | |
$ | 3,475,978 | | |
$ | - | | |
$ | 3,475,978 | |
Cost of revenues | |
| 3,045,868 | | |
| - | | |
| 3,045,868 | |
Gross profit | |
| 430,110 | | |
| - | | |
| 430,110 | |
| |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | |
Selling and marketing expenses | |
| 74,528 | | |
| - | | |
| 74,528 | |
General and administrative expenses | |
| 2,426,299 | | |
| - | | |
| 2,426,299 | |
Research and development expenses | |
| 77,985 | | |
| - | | |
| 77,985 | |
Total operating expenses | |
| 2,578,812 | | |
| - | | |
| 2,578,812 | |
| |
| | | |
| | | |
| | |
Operating loss | |
| (2,148,702 | ) | |
| - | | |
| (2,148,702 | ) |
| |
| | | |
| | | |
| | |
Other (expenses) income | |
| | | |
| | | |
| | |
Interest income | |
| 307 | | |
| - | | |
| 307 | |
Interest expenses | |
| (314,538 | ) | |
| - | | |
| (314,538 | ) |
Other income | |
| 54,991 | | |
| - | | |
| 54,991 | |
Other expenses | |
| (748,666 | ) | |
| - | | |
| (748,666 | ) |
Total other expenses | |
| (1,007,906 | ) | |
| - | | |
| (1,007,906 | ) |
| |
| | | |
| | | |
| | |
Loss before income taxes | |
| (3,156,608 | ) | |
| - | | |
| (3,156,608 | ) |
| |
| | | |
| | | |
| | |
Income tax expenses | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | |
Loss from continuing operations | |
| (3,156,608 | ) | |
| - | | |
| (3,156,608 | ) |
| |
| | | |
| | | |
| | |
Discontinued operations: | |
| | | |
| | | |
| | |
Income from discontinued operations | |
| 7,762,377 | | |
| (7,407,267 | ) | |
| 355,110 | |
| |
| | | |
| | | |
| | |
Net loss | |
| 4,605,769 | | |
| (7,407,267 | ) | |
| (2,801,498 | ) |
| |
| | | |
| | | |
| | |
Less: Net loss attributable to non-controlling interest | |
| - | | |
| | | |
| - | |
| |
| | | |
| | | |
| | |
Net loss attributable to common shareholders | |
$ | 4,605,769 | | |
$ | (7,407,267 | ) | |
$ | (2,801,498 | ) |
| |
| | | |
| | | |
| | |
Net loss | |
| 4,605,769 | | |
| (7,407,267 | ) | |
| (2,801,498 | ) |
| |
| | | |
| | | |
| | |
Foreign currency translation adjustment | |
| (93,517 | ) | |
| (14,733 | ) | |
| (108,250 | ) |
| |
| | | |
| | | |
| | |
Total comprehensive loss | |
| 4,512,252 | | |
| (7,422,000 | ) | |
| (2,909,748 | ) |
| |
| | | |
| | | |
| | |
Earnings (loss) per common share of common stock - basic and diluted | |
| | | |
| | | |
| | |
Continuing operations | |
$ | (0.43 | ) | |
$ | - | | |
$ | (0.43 | ) |
Discontinued operations | |
$ | 1.07 | | |
$ | (1.02 | ) | |
$ | 0.05 | |
| |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 7,282,714 | | |
| 7,282,714 | | |
| 7,282,714 | |
See Accompanying Notes to the Unaudited Condensed
Consolidated Financial Statements
The following tables present the effect of
the Restatement Items on the Company’s condensed consolidated statement of changes in stockholders’ equity for the three
months ended June 30, 2024:
| |
| | |
| | |
| | |
| | |
Accumulated | | |
| | |
| |
| |
| | |
| | |
Additional | | |
| | |
Other | | |
Non- | | |
| |
| |
Common Stock | | |
Paid-in | | |
Accumulated | | |
Comprehensive | | |
Controlling | | |
| |
| |
Shares* | | |
Amount | | |
Capital | | |
Deficit | | |
Income | | |
Interests | | |
Total | |
Balance,
March 31, 2023 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (121,166,172 | ) | |
$ | 5,023,852 | | |
$ | - | | |
$ | 39,632,737 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (12,199,648 | ) | |
| - | | |
| - | | |
| (12,199,648 | ) |
Foreign currency translation
adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,116,356 | ) | |
| - | | |
| (1,116,356 | ) |
Balance, June 30, 2023 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (133,365,820 | ) | |
$ | 3,907,496 | | |
$ | - | | |
$ | 26,316,733 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, March 31, 2024 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (141,805,501 | ) | |
$ | 4,362,621 | | |
$ | - | | |
$ | 18,332,177 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| 5,686,673 | | |
| - | | |
| - | | |
| 5,686,673 | |
Deconsolidation of discontinued operations | |
| - | | |
| - | | |
| (7,422,000 | ) | |
| - | | |
| - | | |
| - | | |
| (7,422,000 | ) |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (66,386 | ) | |
| - | | |
| (66,386 | ) |
Restatement Items | |
| - | | |
| - | | |
| 7,422,000 | | |
| (7,407,267 | ) | |
| (14,733 | ) | |
| - | | |
| - | |
Balance, June 30, 2024 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (143,526,095 | ) | |
$ | 4,281,502 | | |
$ | - | | |
$ | 16,530,464 | |
* |
Prior
period results have been adjusted to reflect the reverse stock split effected on May 31, 2024 |
See Accompanying Notes
to the Unaudited Condensed Consolidated Financial Statements
The following tables present the effect of
the Restatement Items on the Company’s condensed consolidated statement of changes in stockholders’ equity for the six months
ended June 30, 2024:
| |
| | |
| | |
| | |
| | |
Accumulated | | |
| | |
| |
| |
| | |
| | |
Additional | | |
| | |
Other | | |
Non- | | |
| |
| |
Common Stock | | |
Paid-in | | |
Accumulated | | |
Comprehensive | | |
Controlling | | |
| |
| |
Shares* | | |
Stock | | |
Capital | | |
Deficit | | |
Income | | |
Interests | | |
Total | |
Balance, January 1, 2023 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (119,880,801 | ) | |
$ | 4,692,242 | | |
$ | - | | |
$ | 40,586,498 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (13,485,019 | ) | |
| - | | |
| - | | |
| (13,485,019 | ) |
Foreign currency translation
adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (784,746 | ) | |
| - | | |
| (784,746 | ) |
Balance, June 30, 2023 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (133,365,820 | ) | |
$ | 3,907,496 | | |
$ | - | | |
$ | 26,316,733 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, January 1, 2024 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (140,724,597 | ) | |
$ | 4,389,752 | | |
$ | - | | |
$ | 19,440,212 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| 4,605,769 | | |
| - | | |
| - | | |
| 4,605,769 | |
Deconsolidation of discontinued operations | |
| - | | |
| - | | |
| (7,422,000 | ) | |
| - | | |
| - | | |
| - | | |
| (7,422,000 | ) |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (93,517 | ) | |
| - | | |
| (93,517 | ) |
Restatement Items | |
| - | | |
| - | | |
| 7,422,000 | | |
| (7,407,267 | ) | |
| (14,733 | ) | |
| - | | |
| - | |
Balance, June 30, 2024 | |
| 7,282,714 | | |
$ | 7,283 | | |
$ | 155,767,774 | | |
$ | (143,526,095 | ) | |
$ | 4,281,502 | | |
$ | - | | |
$ | 16,530,464 | |
* |
Prior
period results have been adjusted to reflect the reverse stock split effected on May 31, 2024 |
See Accompanying Notes to the Unaudited Condensed
Consolidated Financial Statements
The following tables present the effect of
the Restatement Items on the Company’s condensed consolidated statement of cash flows for the six months ended June 30, 2024:
| |
For
the Six Months Ended June 30, 2024 (Unaudited) | |
| |
As Previously Reported | | |
Restatement Adjustments | | |
As Restated | |
CASH FLOWS FROM OPFRATING ACTIVITIFS: | |
| | |
| | |
| |
| |
| | |
| | |
| |
Net loss | |
$ | 4,605,769 | | |
$ | (7,407,267 | ) | |
$ | (2,801,498 | ) |
Adjustments to reconcile net income (loss) to cash (used in)
provided by operating activities: | |
| | | |
| - | | |
| | |
Depreciation | |
| 958,969 | | |
| - | | |
| 958,969 | |
Amortization | |
| 90,688 | | |
| - | | |
| 90,688 | |
Gain on disposal of subsidiary | |
| (7,596,311 | ) | |
| 7,407,267 | | |
| (189,044 | ) |
Changes in operating assets and liabilities, net of effects
of acquisitions and disposals: | |
| | | |
| | | |
| | |
Accounts receivables, net | |
| (690,160 | ) | |
| - | | |
| (690,160 | ) |
Inventories | |
| (237,407 | ) | |
| - | | |
| (237,407 | ) |
Prepayments and deposit | |
| 1,815,371 | | |
| - | | |
| 1,815,371 | |
Other receivables | |
| (19,865 | ) | |
| - | | |
| (19,865 | ) |
Accounts payable | |
| 506,753 | | |
| - | | |
| 506,753 | |
Advance from customer | |
| (117,075 | ) | |
| - | | |
| (117,075 | ) |
Other payables and accrued liabilities | |
| 53,928 | | |
| - | | |
| 53,928 | |
Taxes payable | |
| (8,988 | ) | |
| - | | |
| (8,988 | ) |
Deferred income | |
| (22,539 | ) | |
| - | | |
| (22,539 | ) |
Net cash used in operating activities | |
| (660,867 | ) | |
| - | | |
| (660,867 | ) |
| |
| | | |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | | |
| | |
Purchase of plant and equipment | |
| 5,683 | | |
| - | | |
| 5,683 | |
Net decrease in cash from disposal of
subsidiaries | |
| (166,066 | ) | |
| - | | |
| (166,066 | ) |
Net cash (used in) provided by investing
activities | |
| (160,383 | ) | |
| - | | |
| (160,383 | ) |
| |
| | | |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | | |
| | |
Proceeds from long-term loans | |
| 1,757,361 | | |
| - | | |
| 1,757,361 | |
Changes in related party balances, net | |
| (816,191 | ) | |
| - | | |
| (816,191 | ) |
Net cash provided by financing activities | |
| 941,170 | | |
| - | | |
| 941,170 | |
| |
| | | |
| | | |
| | |
Net increase in cash and cash equivalents | |
| 119,920 | | |
| - | | |
| 119,920 | |
| |
| | | |
| | | |
| | |
EFFECT OF EXCHANGE RATE ON CASH | |
| 2,630 | | |
| - | | |
| 2,630 | |
| |
| | | |
| | | |
| | |
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH AT BEGINNING OF YEAR | |
| 436,383 | | |
| - | | |
| 436,383 | |
| |
| | | |
| | | |
| | |
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH AT END OF YEAR | |
$ | 558,933 | | |
$ | - | | |
$ | 558,933 | |
| |
| | | |
| | | |
| | |
SUPPLEMENTARY OF CASH FLOW INFORMATION | |
| | | |
| | | |
| | |
Interest received | |
$ | 307 | | |
$ | - | | |
$ | 307 | |
Interest paid | |
$ | 314,538 | | |
$ | - | | |
$ | 314,538 | |
See Accompanying Notes to the Unaudited Condensed
Consolidated Financial Statements
3. Summary of Significant Accounting Policies
Basis of Presentation
Management has prepared the accompanying financial statements and these
notes according to generally accepted accounting principles in the United States (“GAAP”). The Company maintains its general
ledger and journals with the accrual method accounting.
Principles of Consolidation
Details of the Subsidiaries of the Company as of June 30, 2024 are
set below:
Name of Company | | Place of incorporation | | Attributable equity interest
% | | | Registered capital | |
Promising Prospect BVI Limited | | The British Virgin Islands | | | 100 | | | $ | 10,000 | |
Promising Prospect HK Limited | | Hong Kong | | | 100 | | | | 1 | |
Jiayi Technologies (Xianning) Co., Ltd. | | PRC | | | 100 | | | | 2,000,000 | |
Fast Approach Inc. | | Canada | | | 100 | | | | 79 | |
Shanghai Shuning Advertising Co., Ltd. (a subsidiary of Fast Approach Inc.) | | PRC | | | 100 | | | | - | |
Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. | | PRC | | | 100 | | | | 4,710,254 | |
Xianning Bozhuang Tea Products Co., Ltd. | | PRC | | | 100 | | | | 6,277,922 | |
Jilin Chuangyuan Chemical Co., Ltd. | | PRC | | | VIE | | | | 9,280,493 | |
Bless Chemical Co., Ltd (a subsidiary of Shine Chemical) | | Hong Kong | | | 100 | | | | 10,000 | |
Hubei Bryce Technology Co., Ltd. (a subsidiary of Bless Chemical) | | PRC | | | 100 | | | | 30,000,000 | |
Shandong Yunchu Supply Chain Co., Ltd. | | PRC | | | 100 | | | | 5,000,000 | |
Shine Chemical Co., Ltd. | | Cayman | | | 100 | | | | 8,000 | |
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.
Reclassifications
Certain amounts on the prior-years’
consolidated balance sheets and statement of operations were reclassified to reflect discontinued operations, with no effect on ending
stockholders’ equity.
Noncontrolling Interests
The noncontrolling interests of the Company represent the ownership
stakes held by minority shareholders in the Company’s subsidiaries, and are presented separately from the equity attributable to
the Company’s shareholders on the consolidated balance sheets. Noncontrolling interests in the Company’s results are disclosed
on the consolidated statement of operations and comprehensive loss as allocations of total income or loss for the year between noncontrolling
interest holders and the Company’s shareholders.
Use of Estimates
The financial statements preparation requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management evaluates
estimates, including the allowance for credit losses of accounts receivable, amounts due from related parties and equity investments,
the useful lives of our property and equipment, impairment of long-lived assets, long-term investments and goodwill, etc. Management
bases the estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which
form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments
purchased with original maturities of three months or less to be cash equivalents. As of June 30, 2024, the Company had cash and cash
equivalents of $558,933 compared to $270,317 as of December 31, 2023.
Accounts Receivable, Net
Accounts receivables are recognized and carried at the original invoice
amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when the amount is not expected to be collected.
Delinquent amount balances are written off against the allowance for doubtful amounts after the management has determined that the likelihood
of collection is not probable.
Inventories
Inventories consist of raw materials and finished goods, stated at
the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, inbound shipping costs, and allocated
overhead. An annual impairment test will be performed on inventory, and any excess of the recoverable amount over the carrying amount
will be recognized as impairment losses in the current period.
Advances and Prepayments to Suppliers
The Company makes an advance payment to suppliers and vendors for the
procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers, the applicable amount is reclassified
from advances and prepayments to suppliers to inventory. At the end of each fiscal year, we undertake a thorough examination of prepaid
expenses and contractual terms, analyze the causes of delayed receipt of corresponding valuable goods, calculate recoverable amounts using
a probability-weighted average method for unrecoverable amounts, and make provisions for impairment as deemed necessary.
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:
Buildings | |
| 20-40 years | |
Machinery and equipment | |
| 1-10 years | |
Motor vehicles | |
| 5-10 years | |
Office equipment | |
| 5-20 years | |
The cost and related accumulated depreciation of assets sold or otherwise
retired are eliminated from the accounts, and any gain or loss is included in the Company’s results of operations. The costs of
maintenance and repairs are recognized as incurred; significant renewals and betterments are capitalized.
Intangible Assets
Intangible assets are carried at cost less accumulated amortization.
Amortization is provided over their useful lives, using the straight-line method. The estimated useful lives of the intangible assets
are as follows:
Land use rights | | | 50 years | |
Software licenses | | | 2 years | |
Trademarks | | | 10 years | |
Construction in Progress and Prepayments for Equipment
Construction in progress and prepayments for equipment represent direct
and indirect acquisition and construction costs for plants and fees of purchase and installation of related equipment. Amounts classified
as construction in progress and prepayments for equipment are transferred to plant and equipment when substantially all the activities
necessary to prepare the assets for their intended use are completed. Depreciation is not provided for assets classified in this account.
Goodwill
Goodwill represents the excess of the purchase price over the fair
value of the net identifiable assets acquired in a business combination. The Company conducts an annual assessment of its goodwill for
impairment. If the carrying value of its goodwill exceeds its fair value, then impairment has been incurred; accordingly, a charge to
the Company’s operations results will be recognized during the period. Impairment losses on goodwill are not reversed. Fair value
is generally determined using a discounted expected future cash flow analysis.
Impairment of Long-lived Assets
The Company annually reviews its long-lived assets for impairment or
whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may become
obsolete from a difference in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize
the long-lived assets to generate adequate profits. Impairment is present if the carrying amount of an asset is less than its expected
future undiscounted cash flows.
If an asset is considered impaired, a loss is recognized based on the
amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported lower the carrying
amount or fair value fewer costs to selling.
Statutory Reserves
Statutory reserves refer to the amount appropriated from the net income
following laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production
or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount
equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum equal to 50% of the enterprise’s
PRC registered capital.
Foreign Currency Translation
The accompanying financial statements are presented in United States
dollars. The functional currency of the Company is the Renminbi (RMB). The Company’s assets and liabilities are translated into
United States dollars from RMB at year-end exchange rates. Its revenues and expenses are translated at the average exchange rate during
the period. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.
| |
06/30/2024 | | |
12/31/2023 | | |
06/30/2023 | |
Period-end US$: CDN exchange rate | |
| 1.3634 | | |
| 1.3196 | | |
| 1.3205 | |
Period-end US$: RMB exchange rate | |
| 7.1268 | | |
| 7.0827 | | |
| 7.2258 | |
Period-end US$: HK exchange rate | |
| 7.8087 | | |
| 7.8157 | | |
| 7.8373 | |
Period average US$: CDN exchange rate | |
| 1.3515 | | |
| 1.3452 | | |
| 1.3480 | |
Period average US$: RMB exchange rate | |
| 7.1051 | | |
| 7.0467 | | |
| 6.9291 | |
Period average US$: HK exchange rate | |
| 7.8187 | | |
| 7.8282 | | |
| 7.8387 | |
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 adopted ASC 606 “Revenue Recognition.” It recognizes
revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect
to be entitled to in exchange for those goods or services.
The Company derives its revenues from selling explosion-proof skid-mounted
refueling device, SF double-layer buried oil storage tank, high-grade synthetic fuel products, industrial formaldehyde solution, urea-formaldehyde
pre-condensate (UFC), methylal, urea-formaldehyde glue for environment-friendly artificial board chemicals, food products like frozen
fruits, beef & mutton products and vegetables and tea products. The Company recognizes product revenue at a point in time when the
control of the products has been transferred to customers. The Company applies the following five steps to determine the appropriate amount
of revenue to be recognized as it fulfills its obligations under each of its agreements:
|
● |
identify the contract with a customer; |
|
● |
identify the performance obligations in the contract; |
|
● |
determine the transaction price; |
|
● |
allocate the transaction price to performance obligations in the contract; and; |
|
● |
Recognize revenue as the performance obligation is satisfied. |
Advertising
All advertising costs are expensed as incurred.
Shipping and Handling
All outbound shipping and handling costs are expensed as incurred.
Research and Development
All research and development costs are expensed as incurred.
Retirement Benefits
Retirement benefits in the form of mandatory government-sponsored defined
contribution plans are charged to either expense as incurred or allocated to inventory as part of overhead.
Income Taxes
The Company accounts for income tax using an asset and liability approach
and recognizes deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net
tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes. A valuation allowance is provided for deferred tax assets. If it is more likely than not, these items will
either expire before the Company can realize their benefits or uncertain future realization.
Comprehensive Income
The Company uses Financial Accounting Standards Board (“FASB”)
ASC Topic 220, “Reporting Comprehensive Income.” Comprehensive income is comprised of net income and all changes to the statements
of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders.
Earnings Per Share
The Company computes earnings per share (“EPS”) following
ASC Topic 260, “Earnings per share.” Basic EPS is measured as the income or loss available to common shareholders divided
by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis from the
potential conversion of convertible securities or the exercise of options and or warrants; the dilutive impacts of potentially convertible
securities are calculated using the as-if method; the potentially dilutive effect of options or warranties are computed using the treasury
stock method. Potentially anti-dilutive securities (i.e., those that increase income per share or decrease loss per share) are excluded
from diluted EPS calculation.
Fair Value Measurements of Financial Instruments
The Company’s financial instruments, including cash and equivalents,
accounts and other receivables, accounts and other payables, accrued liabilities, and short-term debt, have carrying amounts that approximate
their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosing
the Company’s fair value of financial instruments. ASC Topic 825, “Financial Instruments,” defines fair value and establishes
a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures.
The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities qualify as financial instruments
and are a reasonable estimate of their fair values because of the short period between the origination of such instruments and their expected
realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:
|
● |
Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets. |
|
● |
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and information that are observable for the asset or liability, either directly or indirectly, for substantially the financial instrument’s full term. |
|
● |
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
Lease
Effective December 31, 2018, the Company
adopted ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that do not require us to reassess: (1)
whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and
(3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to
make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient
that allows lessees to treat the lease and non-lease components of a lease as a single lease component.
Lease terms used to calculate the present value of lease payments generally
do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception
that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable
to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets
and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee.
The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term.
The Company reviews the impairment of its ROU assets consistent with
the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes
in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment
is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related
operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and it includes
the associated operating lease payments in the undiscounted future pre-tax cash flows.
As of June 30, 2024, the lease agreement with JSSH has lapsed and the
company does not have any current lease agreements exceeding 12 months.
Equity Investments
In January 2016, the FASB issued
ASU 2016-01 (“ASU 2016-01”), Recognition and Measurement of Financial Assets and Financial Liabilities,
which, among other things, generally requires companies to measure investments in other entities, except those accounted for under the
equity method, at fair value and to recognize any changes in fair value in net income. ASU 2016-01 also simplifies the impairment
assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment.
ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, and the guidance should be applied by means
of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The guidance related to equity
investments without readily determinable fair values (including disclosure requirements) is applied prospectively to equity investments
that exist as of the date of adoption. ASU 2016-01, which the Company adopted on January 1, 2018, did not have a material
impact on the consolidated financial statements.
Investments in entities over
which the Company does not have significant influence are recorded as equity investments and are accounted for either at fair value with
any changes recognized in net income, or for those without readily determinable fair values, at cost less impairment, adjusted for subsequent
observable price changes. Under the equity method, the Company’s share of the post-acquisition profits or losses of equity investments
is recognized in the Company’s consolidated statements of comprehensive income; and the Company’s share of post-acquisition
movements in equity is recognized in equity in the Company’s consolidated balance sheets. Unrealized gains on transactions between
the Company and an entity in which the Company has recorded an equity investment are eliminated to the extent of the Company’s interest
in the entity. To the extent of the Company’s interest in the investment, unrealized losses are eliminated unless the transaction
provides evidence of an impairment of the asset transferred. When the Company’s share of losses in an entity in which the Company
has recorded an equity investment equals or exceeds its interest in the entity, the Company does not recognize further losses, unless
the Company has incurred obligations or made payments on behalf of the equity investee.
Commitments and Contingencies
From time to time, the Company is a party to various legal actions
arising in the ordinary course of business. The majority of these claims and proceedings related to or arise from commercial disputes.
The Company first determine whether a loss from a claim is probable, and if it is reasonable to estimate the potential loss. The Company
accrues costs associated with these matters when they become probable, and the amount can be reasonably estimated. Legal costs incurred
in connection with loss contingencies are expensed as incurred. Also, the Company disclose a range of possible losses, if a loss from
a claim is probable but the amount of loss cannot be reasonably estimated, which is in line with the applicable requirements of Accounting
Standard Codification 450. The Company’s management does not expect any liability from the disposition of such claims and litigation
individually or in the aggregate would have a material adverse impact on the Company’s consolidated financial position, results
of operations and cash flows.
Recent Accounting Pronouncements
In May 2019, the FASB issued ASU 2019-05, which is an update to ASU
Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which
introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost
basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit
Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale
debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance
with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this Update
address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets
previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial
statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted
transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial
statement users with decision-useful information. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning
January 1st, 2020. The Company has implemented the new standard, and as of June 30, 2024, there was no material effect of this current
standard on its consolidated financial statements and related disclosures.
Other recent accounting pronouncements issued by the FASB, including
its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did
not or are not believed by management to have a material impact on the Company’s present or future financial statements.
4. Variable Interest Entity (“VIE”)
A VIE is an entity that has either a total equity investment that is
insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors
lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns
of the entity or obligation to absorb the expected losses of the entity. If any, the variable interest holder with a controlling financial
interest in a VIE is deemed the primary beneficiary and must consolidate the VIE. PLAG WOFE is deemed to have the controlling financial
interest and be the primary beneficiary of Jilin Chuangyuan Chemical Co., Ltd because it has both of the following characteristics:
1) |
The power to direct activities at Jilin Chuangyuan Chemical Co., Ltd. that most significantly impact such entity’s economic performance, and |
2) |
The obligation to absorb losses and the right to receive benefits from Jilin Chuangyuan Chemical Co., Ltd that could potentially be significant to such entity. Under the Contractual Arrangements, Jilin Chuangyuan Chemical Co., Ltd pay service fees equal to all of its net income to PLAG WFOE. At the same time, PLAG WFOE is obligated to absorb all of the Jilin Chuangyuan Chemical Co., Ltd.’s losses. The Contractual Arrangements are designed to operate Jilin Chuangyuan Chemical Co., Ltd for the benefit of PLAG WFOE and ultimately, the Company. Accordingly, the accounts of Jilin Chuangyuan Chemical Co., Ltd are consolidated in the accompanying consolidated financial statements. In addition, those financial positions and results of operations are included in the Company’s consolidated financial statements. |
The carrying amount of VIE’s consolidated assets and liabilities
as of June 30, 2024 and December 31, 2023 are as follows:
| |
June 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
Assets | |
| | |
| |
Current assets | |
| | |
| |
Cash and cash equivalents | |
$ | 18,378 | | |
$ | 33,103 | |
Trade accounts receivable, net | |
| 2,556 | | |
| 132,013 | |
Inventories | |
| 563,190 | | |
| 528,624 | |
Advances to suppliers | |
| 124,688 | | |
| 106,971 | |
Other receivables | |
| 19,983 | | |
| 25,280 | |
Intercompany receivable | |
| 1,543,470 | | |
| 1,553,080 | |
Prepaid expenses | |
| 3,908 | | |
| - | |
Total current assets | |
| 2,276,173 | | |
| 2,379,071 | |
| |
| | | |
| | |
Non-current assets | |
| | | |
| | |
Plant and equipment, net | |
| 7,433,054 | | |
| 7,991,576 | |
Intangible assets, net | |
| 1,819,736 | | |
| 1,854,099 | |
Construction in progress, net | |
| 7,296 | | |
| 7,342 | |
Total non-current assets | |
| 9,260,086 | | |
| 9,853,017 | |
| |
| | | |
| | |
Total assets | |
$ | 11,536,259 | | |
$ | 12,232,088 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Equity | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable | |
$ | 531,620 | | |
$ | 565,582 | |
Advance from customers | |
| 144,538 | | |
| 7,723 | |
Taxes payable | |
| 49 | | |
| 16,363 | |
Other payables and accrued liabilities | |
| 3,167,600 | | |
| 3,115,764 | |
Intercompany payable | |
| 3,012,656 | | |
| 3,031,415 | |
Other payables-related parties | |
| 1,530,826 | | |
| 1,307,260 | |
Long term payable-current portion | |
| 119,908 | | |
| 161,669 | |
Deferred income | |
| 13,330 | | |
| 21,178 | |
Total current liabilities | |
| 8,520,527 | | |
| 8,226,954 | |
| |
| | | |
| | |
Non-current liabilities | |
| | | |
| | |
Long-term payables | |
| 3,788,517 | | |
| 3,812,106 | |
Total non-current liabilities | |
| 3,788,517 | | |
| 3,812,106 | |
| |
| | | |
| | |
Total Liabilities | |
$ | 12,309,044 | | |
$ | 12,039,060 | |
| |
| | | |
| | |
Stockholders’ equity | |
| | | |
| | |
Paid-in capital | |
| 9,280,493 | | |
| 9,280,493 | |
Statutory Reserve | |
| 29,006 | | |
| 29,006 | |
Accumulated deficit | |
| (9,196,984 | ) | |
| (8,229,416 | ) |
Accumulated other comprehensive income | |
| (885,300 | ) | |
| (887,055 | ) |
Total stockholders’ equity | |
| (772,785 | ) | |
| 193,028 | |
| |
| | | |
| | |
Total liabilities and stockholders’ equity | |
$ | 11,536,259 | | |
$ | 12,232,088 | |
The summarized operating results of the VIE’s for the three
and six months ended June 30, 2024 and 2023 are as follows:
| |
For
the Three Months Ended June 30, | | |
For the Six Months Ended June
30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Operating revenues | |
$ | 36,065 | | |
$ | 2,093,307 | | |
$ | 62,705 | | |
$ | 4,286,828 | |
Gross profit | |
| (23,464 | ) | |
| (57,239 | ) | |
| (37,895 | ) | |
| (142,868 | ) |
Loss from operations | |
| (529,171 | ) | |
| (672,427 | ) | |
| (967,568 | ) | |
| (1,179,913 | ) |
Net loss | |
$ | (529,171 | ) | |
$ | (672,427 | ) | |
$ | (967,568 | ) | |
$ | (1,179,913 | ) |
5. Accounts Receivable, Net
The Company extends credit terms of 15 to 60 days to the majority of
its domestic customers, which include third-party distributors, supermarkets, and wholesalers
| |
June
30, | | |
December 31, | |
| |
2024 | | |
2023 | |
Trade accounts receivable | |
$ | 5,870,607 | | |
$ | 5,217,020 | |
Less: Allowance
for credit losses | |
| (2,072,410 | ) | |
| (2,102,127 | ) |
| |
$ | 3,798,197 | | |
$ | 3,114,893 | |
Allowance for credit losses | |
| | | |
| | |
Beginning balance: | |
| (2,102,127 | ) | |
| (366,301 | ) |
Additions to allowance | |
| - | | |
| (1,735,826 | ) |
Bad debt written-off | |
| 29,717 | | |
| - | |
Ending balance | |
$ | (2,072,410 | ) | |
$ | (2,102,127 | ) |
6. Advances and Prepayments to Suppliers
Prepayments include investment deposits to guarantee investment contracts
and advance payment to suppliers and vendors to procure raw materials. Prepayments consist of the following:
| |
June 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
Payment to suppliers and vendors | |
| 3,342,753 | | |
| 5,448,324 | |
Allowance for credit losses | |
| (131,311 | ) | |
| (132,129 | ) |
Total | |
$ | 3,211,442 | | |
$ | 5,316,195 | |
7. Inventories
Inventories consisted of the following as of June 30, 2024 and December
31, 2023:
| |
June 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
Raw materials | |
$ | 2,291,883 | | |
$ | 1,957,942 | |
Work in progress | |
| 1,365,375 | | |
| 1,394,569 | |
Finished goods | |
| 604,609 | | |
| 697,733 | |
Allowance for inventory reserve | |
| (2,084,203 | ) | |
| (2,097,181 | ) |
Total | |
$ | 2,177,664 | | |
$ | 1,953,063 | |
8. Plant and Equipment, Net
Plant and equipment consisted of the following as of June 30, 2024
and December 31, 2023:
| |
June 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
At Cost: | |
| | |
| |
Buildings | |
$ | 19,483,292 | | |
$ | 19,604,604 | |
Machinery and equipment | |
| 11,117,907 | | |
| 11,181,032 | |
Office equipment | |
| 750,432 | | |
| 767,094 | |
Motor vehicles | |
| 1,456,592 | | |
| 1,465,662 | |
| |
| 32,808,223 | | |
| 33,018,392 | |
Less: Impairment | |
| (745,674 | ) | |
| (750,317 | ) |
Less: Accumulated depreciation | |
| (12,877,899 | ) | |
| (11,996,231 | ) |
| |
| 19,184,650 | | |
| 20,271,844 | |
Construction in progress | |
| 30,756 | | |
| 30,948 | |
| |
$ | 19,215,406 | | |
$ | 20,302,792 | |
Depreciation expense for the six months ended
June 30, 2024 and June 30, 2023 was $881,669 and $630,258, respectively.
9. Intangible Assets
| |
June 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
At Cost: | |
| | | |
| | |
Land use rights | |
| 2,982,288 | | |
| 3,000,857 | |
Software licenses | |
| 66,792 | | |
| 68,573 | |
Trademark | |
| 896,094 | | |
| 901,674 | |
| |
$ | 3,945,174 | | |
$ | 3,971,104 | |
| |
| | | |
| | |
Less: Accumulated amortization | |
| (1,219,020 | ) | |
| (1,137,002 | ) |
| |
$ | 2,726,154 | | |
$ | 2,834,102 | |
Amortization expense for the three months ended
June 30, 2024 and June30, 2023 was $82,018 and $60,314, respectively.
10. Long-term Investment
In 2020, the Company made an initial investment of $2.87 million in
exchange for a 19% limited partner interest in Shandong Ningwei New Energy Technology Co., Ltd. The investment was accounted for using
the cost method due to the lack of readily determinable fair value in 2024.
As of June 30, 2024 and December 31, 2023, the balance of long-term
investments stood at $2,243,954 and $2,257,926 respectively. The variance can be attributed to the impact of foreign exchange fluctuations.
11. Other Payable
As of June 30, 2024 and December 31, 2023,
the balance of other payable was $4,534,229 and $4,484,453 Other payables – third parties are those non-trade payables arising
from transactions between the Company and certain third parties.
12. Advance From Customer
For our operation, the proceeds received from sales are initially recorded
as advance from customers, which was usually related to unsatisfied performance obligations at the end of an applicable reporting period.
As of June 30, 2024 and December 31, 2023, the outstanding balance of the Advance from customers was $2,465,754 and $2,464,319 respectively.
Due to the generally short-term duration of the relevant contracts, most of the performance obligations are satisfied in the following
reporting period.
13. Related Parties Transaction
As of June 30, 2024 and December 31, 2023, the outstanding balance
due from related parties was $1,968,784 and $315,724, respectively. Significant related parties comprised much of the total outstanding
balance are stated below:
| | | | As of
June 30, | | | As of December 31, | |
Amounts due from related parties: | | | | 2024 | | | 2023 | |
Mr. Chen Xing | | the management of the Shandong Yunchu | | $ | 292,390 | | | $ | 294,210 | |
Mr. Lu Jun | | the management of the Jingshan Sanhe | | $ | - | | | $ | 21,514 | |
Mr. Xiong Hai Yan | | the management of the Jingshan Sanhe | | $ | 1,640,675 | | | $ | - | |
Mr. Yang Yong | | the management of the Fast | | $ | 35,719 | | | $ | - | |
These above nontrade receivables arising from transactions between
the Company and certain related parties, such as loans to these related parties. These loans are unsecured, non-interest bearing and due
on demand.
As of June 30, 2024 and December 31, 2023,
the outstanding balance due to related parties was $7,922,110 and $7,111,257, respectively. The balance was advanced for working capital
of the Company, non-interest bearing, and unsecured unless further disclosed.
Significant parties comprised much of the total outstanding balance
are stated below:
| | | | As of June 30, | | | As of December 31, | |
Amounts due to related parties: | | | | 2024 | | | 2023 | |
Ms. Yan Yan | | the spouse of the legal representative of Jilin Chuangyuan | | $ | 1,156,199 | | | $ | 899,241 | |
Mr. Bin Zhou | | Chief Executive Officer and Chairman of the Company | | $ | 1,494,181 | | | $ | 1,393,529 | |
Hubei Shuang New Energy Technology Co., Ltd. | | significant impact | | $ | 974,015 | | | $ | 442,216 | |
Shandong Ningwei New Energy Technology Co., Ltd. | | significant impact | | $ | 1,486,782 | | | $ | 1,496,040 | |
Anhui Ansheng equipment Co., Ltd. | | Previous subsidiary | | $ | 1,177,804 | | | $ | 1,177,836 | |
Senior managements | | significant impact | | $ | 1,633,129 | | | $ | 1,702,395 | |
14. Goodwill
The changes in the carrying amount of goodwill by reportable segment
are as follows:
| |
SDYC | |
Balance as of December 31, 2022 | |
$ | 4,724,699 | |
Goodwill acquired | |
| - | |
Goodwill impairment | |
| - | |
Disposal of subsidiaries | |
| - | |
Balance as of December 31, 2023 | |
$ | 4,724,699 | |
Goodwill acquired | |
| - | |
Goodwill impairment | |
| - | |
Balance as of June 30, 2024 | |
$ | 4,724,699 | |
As of June 30, 2024 and December 31, 2023, the carrying amount of the
Company’s goodwill was $4,724,699.
15. Bank Loans
The outstanding balances on short-term and long-term bank loans consisted
of the following:
Lender | | Maturities | | Weighted average interest
rate | | | 06/30/2024 | | | 12/31/2023 | |
Rural Credit Cooperatives of Jilin Province, Jilin Branch | | Due in November 2026 | | | 7.83 | % | | $ | 3,507,886 | | | $ | 3,529,727 | |
Tonghua Dongchang Yuyin Village Bank Co., Ltd. | | Due in June 2025 | | | 8 | % | | $ | 280,631 | | | $ | 282,378 | |
Jingshan City branch of Postal Saving Bank of China | | Due in January 2025 | | | 3.85 | % | | $ | 1,401,330 | | | $ | - | |
Hubei Jingshan Rural Commercial Bank Co. Ltd. | | Due in June 2026 | | | 4 | % | | $ | 420,946 | | | $ | - | |
Buildings and land use rights in the amount
of $11,043,343 are used as collateral for Jilin Branch. The long-term bank loan which is denominated in Renminbi was primarily
obtained for general working capital.
The loan from Tonghua Dongchang Yuyin
Village Bank, as a three years long-term debt, was denominated in Renminbi and was primarily obtained for general working capital.
On June 15, 2022, Mr. Chen Yongsheng and Mr. Cai Xiaodong pledged 28,465,000 stocks of Jilin Chuangyuan Chemical Co., Ltd. to the
pledgee-Tonghua Dongchang Yuyin Village Bank. As the pledgee, Tonghua Dongchang Yuyin Village Bank shall have custody of these
stocks, which accounted for approximately 71.43% of the total share during the entire term of pledge set forth in this
agreement.
The loan from the Jingshan City branch of Postal Savings Bank of China
was obtained to support general working capital, with a comprehensive guarantee provided by Mr. Zhou Bin, the Company’s COO, and Hubei
Bryce Technology Co., Ltd., which is under the company’s control.
Interest expense for six months ended June 30, 2024 and 2023 was $176,236
and $135,452 respectively.
16. Equity
On January 13, 2022, the Company entered into a Securities Purchase
Agreement, pursuant to which three individuals residing in the People’s Republic of China agreed to purchase an aggregate of 7,000,000 shares
of the Company’s common stock, par value $0.001 per share, for an aggregate purchase price of $7,000,000, representing a purchase
price of $1.00 per Share.
On April 8, 2022, Planet Green Holdings Corporation (Nevada) issued
an aggregate of 7,500,000 shares of common stock to the equity holders of Allinyson Ltd. for the acquisition of 100% of
the equity interest of Allinyson Ltd.
On May 19, 2022, the Company entered into a Securities Purchase Agreement,
pursuant to which two investors agreed to purchase an aggregate of 10,000,000 shares of the Company’s common stock, par
value $0.001 per share, for an aggregate purchase price of $4,100,000, representing a purchase price of $0.41 per Share.
On July 20, 2022, the Company acquired 30%
equity interest of the Xianning Xiangtian Energy Holdings Group Co., Ltd. and the Company issued 12,000,000 shares of common
stock to the Sellers.
On May 31, 2024, every ten shares of the
Common Stock issued and outstanding or held as treasury stock will be automatically converted into one new share of Common Stock.
The total number of shares of Common Stock authorized for issuance will then be reduced by a corresponding proportion The par value
per share of the Common Stock will remain unchanged at $0.001 per share.
As of June 30, 2024 and 2023, the number of common stock issued was
7,282,714 and 7,282,714 respectively.
17. Income Taxes
United States
On December 22, 2017, the “Tax Cuts and Jobs Act” (the
“Act”) was enacted. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. As the Company
has a December 31 fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of
21% for the Company’s fiscal year ending June 30, 2024. Accordingly, the Company has remeasured the Company’s deferred tax
assets on net operating loss carryforwards (“NOLs”) in the U.S at the lower enacted cooperated tax rate of 21%. However, this
remeasurement has no effect on the Company’s income tax expenses as the Company has provided a 100% valuation allowance on its deferred
tax assets previously.
Additionally, the Act imposes a one-time transition tax on deemed repatriation
of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused
the Company to remeasure all U.S. deferred income tax assets and liabilities for temporary differences and NOLs and recorded one time
income tax payable to be paid in 8 years. However, this one-time transition tax has no effect on the Company’s income tax expenses
as the Company has no undistributed foreign earnings prior to March 31, 2024 which the Company has foreign cumulative losses at June 30,
2024.
British Virgin Islands
Planet Green Holdings Corporation BVI is incorporated in the British
Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments
of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed.
Hong Kong
Lucky Sky Planet Green Holdings Co., Limited (H.K.) is incorporated
in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted
in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions
for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax
law, Lucky Sky Planet Green Holdings Co., Limited (H.K.) is exempted from income tax on its foreign-derived income and there are no withholding
taxes in Hong Kong on remittance of dividends.
PRC
The Company PRC subsidiaries and VIEs and their controlled entities
are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable
tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under
the Enterprise Income Tax Laws of the PRC, Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments.
Significant components of the income tax expense consisted of the following
for the three months ended June 30, 2024 and 2023:
| |
6/30/2024 | | |
6/30/2023 | |
Loss attributed to PRC operations | |
$ | (2,756,026 | ) | |
$ | (1,834,178 | ) |
Loss attributed to U.S. operations | |
| (628,100 | ) | |
| (11,560,992 | ) |
Income attributed to Canada operations | |
| 227,518 | | |
| 43,034 | |
Loss before tax | |
$ | (3,156,608 | ) | |
$ | (13,352,136 | ) |
| |
| | | |
| | |
PRC Statutory Tax at 25% Rate | |
| (689,007 | ) | |
| (472,091 | ) |
Valuation allowance | |
| 689,007 | | |
| 550,789 | |
Income tax | |
$ | - | | |
$ | 78,698 | |
Per Share Effect of Tax Exemption | |
| | | |
| | |
Weighted-Average Shares Outstanding Basic | |
| 7,282,714 | | |
| 7,282,714 | |
Per share effect | |
$ | - | | |
$ | - | |
The Company evaluated the provisions of ASC 740 related to the accounting
for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 prescribes a comprehensive model for
how a company should recognize, present, and disclose uncertain positions that the company has taken or expects to take in its tax return.
For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to
the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss
carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential
future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.
Reconciliation of effective income tax rate from continuing operations
is as follows for the six months ended June 30, 2024 and 2023:
| |
6/30/2024 | | |
6/30/2023 | |
U.S. federal statutory income tax rate | |
| 21 | % | |
| 21 | % |
Higher (lower) rates in PRC, net | |
| 4 | % | |
| 4 | % |
Non-recognized deferred tax benefits in the PRC | |
| (25.00 | )% | |
| (25.59 | )% |
The Company’s effective tax rate | |
| - | % | |
| 0.59 | % |
18. Earnings (Loss) Per Share of Common
Stock
| |
For the Six Months Ended | |
| |
June 30, | |
| |
2024 | | |
2023 | |
Net loss from operations attributable to common
stockholders | |
$ | (2,801,498 | ) | |
$ | (13,485,019 | ) |
| |
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