10q10k10q10k.net

What changed in Planet Green Holdings Corp.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Planet Green Holdings Corp.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+101 added−96 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-31)

Top changes in Planet Green Holdings Corp.'s 2023 10-K

101 paragraphs added · 96 removed · 78 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

57 edited+6 added−8 removed130 unchanged
Biggest changeUsing polymer emulsion (VAE emulsion) as raw material, all kinds of additives are added, and then transported to the reaction kettle through diaphragm pump to warm up and mix evenly, and then transported to the mixing kettle with additives through diaphragm pump to mix evenly, then transported to the high-speed reactor through diaphragm pump to emulsify, emulsified and then transported to the spare material tank through the diaphragm pump, and then transported to the spray drying tower through the spare material tank through the diaphragm pump to form polymer powder after spray drying, and the polymer powder and various additives are mixed and screened through the mixer to be packed into the warehouse. 13 The following table shows the number and types of production lines, the types of products produced and the production capacity as of the date of this report: Facility Production Lines Product Portfolio Capacity Xianning Bozhuang There are six production lines: the production line of cyan brick tea with traditional handicraft; the production line of cyan brick tea; the production line of teabag; the production line of green tea and the production line of black tea Cyan brick tea, black tea and green tea Production line with 5,020 tons of production capacity Jingshan Sanhe There are two production lines: the production line of ethanol fuel and the production line of fuel additive Alcohol based clean fuel, liquid wax, arene and biomass fuel Two production lines with a total production capacity of 300,000 tons/year for ethanol fuel, and 3000 tons/year for fuel additive Jilin Chuangyuan The company has two formaldehyde production lines, eight rubber production units, one methylal production line and one clean fuel oil production line Formaldehyde, urea formaldehyde adhesive, methylal and clean fuel oil Annual production capacity of 120,000 tons of formaldehyde, 100,000 tons of urea formaldehyde glue, 3,0000 tons of methylal and 20,000 tons of clean fuel oil We operate our production lines year-round.
Biggest changeThe following table shows the number and types of production lines, the types of products produced and the production capacity as of the date of this report: Facility Production Lines Product Portfolio Capacity Xianning Bozhuang There are six production lines: the production line of cyan brick tea with traditional handicraft; the production line of cyan brick tea; the production line of teabag; the production line of green tea and the production line of black tea Cyan brick tea, black tea and green tea Production line with 5,020 tons of production capacity Jingshan Sanhe There are two production lines: the production line of ethanol fuel and the production line of fuel additive Alcohol based clean fuel, liquid wax, arene and biomass fuel Two production lines with a total production capacity of 300,000 tons/year for ethanol fuel, and 3000 tons/year for fuel additive Jilin Chuangyuan The company has two formaldehyde production lines, eight rubber production units, one methylal production line and one clean fuel oil production line Formaldehyde, urea formaldehyde adhesive, methylal and clean fuel oil Annual production capacity of 120,000 tons of formaldehyde, 100,000 tons of urea formaldehyde glue, 3,0000 tons of methylal and 20,000 tons of clean fuel oil We operate our production lines year-round.
We do not have cash management policies dictating how funds are transferred throughout our organization. We may encounter difficulties in our ability to transfer cash between PRC subsidiaries and non-PRC subsidiaries largely due to various PRC laws and regulations imposed on foreign exchange.
We do not have cash management policies dictating how funds are transferred throughout our organization. We may encounter difficulties in our ability to transfer cash between PRC subsidiaries and non-PRC subsidiaries largely due to various PRC laws and regulations imposed on foreign exchange.
PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these risks may result in a material change in our operations and the value of our common stock or could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless.
PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these risks may result in a material change in our operations and the value of our common stock or could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless.
Shandong Yunchu distributes beef products in China including several major beef products providers and distributors in China, such as Henan Hengdu Food Co., Ltd., Shanxi Pingyao Beef Group, Shandong Delis Food Co., Ltd. and Heilongjiang Binxi Group.
Shandong Yunchu distributes beef products in China including several major beef products providers and distributors in China, such as Henan Hengdu Food Co., Ltd., Shanxi Pingyao Beef Group, Shandong Delis Food Co., Ltd. and Heilongjiang Binxi Group.
As a result, these competitors may be able to respond more quickly to changes in customer preferences, legal requirements or other industry or regulatory trends; devote greater resources to the development, promotion and sale of their products; adopt more aggressive pricing policies, dedicate more effort to infrastructure and systems development in support of their business or product development activities; implement more robust or creative initiatives to advance consumer acceptance of their products; or exert more influence on the regulatory landscape that impacts the vehicle fuels market. 6 Advertising Business and Mobile Game Business Fast Approach is a North America demand side platform that directly connects to Chinese market without middleman and is supported by world class data science researchers among some well-respected universities in North America.
As a result, these competitors may be able to respond more quickly to changes in customer preferences, legal requirements or other industry or regulatory trends; devote greater resources to the development, promotion and sale of their products; adopt more aggressive pricing policies, dedicate more effort to infrastructure and systems development in support of their business or product development activities; implement more robust or creative initiatives to advance consumer acceptance of their products; or exert more influence on the regulatory landscape that impacts the vehicle fuels market. 7 Advertising Business and Mobile Game Business Fast Approach is a North America demand side platform that directly connects to Chinese market without middleman and is supported by world class data science researchers among some well-respected universities in North America.
Our operation meets the requirements of relevant national laws, regulations, standards and specifications, as well as other the requirements of national management departments at all levels. 16 Our importing and distribution of beef products business is carried out by Shandong Yunchu and we have obtained relevant certifications including the record registration form of foreign trade operators and food business license.
Our operation meets the requirements of relevant national laws, regulations, standards and specifications, as well as other the requirements of national management departments at all levels. Our importing and distribution of beef products business is carried out by Shandong Yunchu and we have obtained relevant certifications including the record registration form of foreign trade operators and food business license.
To the extent cash or assets in the business is in the PRC or Hong Kong or in a PRC or Hong Kong entity, and may need to be used to fund operations outside of the PRC or Hong Kong, the funds and assets may not be available to fund operations or for other uses outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations by the government on us, our subsidiaries’ or the VIE’s ability to transfer cash and assets.
To the extent cash or assets in the business is in the PRC or Hong Kong or in a PRC or Hong Kong entity, and may need to be used to fund operations outside of the PRC or Hong Kong, the funds and assets may not be available to fund operations or for other uses outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations by the government on our subsidiaries’ or the VIE’s ability to transfer cash and assets.
We typically rely on numerous domestic suppliers, including some with whom we have a long-term relationship. Our suppliers generally include wholesale agricultural product companies, food production companies, tea bag processing companies and chemical products wholesale company. Our Customers Our products are sold both in Chinese domestic market.
We typically rely on numerous domestic suppliers, including some with whom we have a long-term relationship. Our suppliers generally include wholesale agricultural product companies, food production companies, tea bag processing companies and chemical products wholesale company. 8 Our Customers Our products are sold both in Chinese domestic market.
On December 16, 2022, Jiayi Technologies, a subsidiary of the Company, terminated the VIE agreements with Anhui Ansheng, a former VIE of Planet Green. Each of the VIE Agreements is described in detail below: Consultation and Service Agreement .
On December 16, 2022, Jiayi Technologies, a subsidiary of the Company, terminated the VIE agreements with Anhui Ansheng, a former VIE of Planet Green. 10 Each of the VIE Agreements is described in detail below: Consultation and Service Agreement .
Our Sales and Marketing Efforts We have not spent a significant amount of capital on advertising in the past, and our advertising budget continues to be limited. In 2022, our marketing and branding efforts mainly focus on internet advertising and long-term customers. Intellectual Property Patents The company vigorously implements scientific and technological innovation.
Our Sales and Marketing Efforts We have not spent a significant amount of capital on advertising in the past, and our advertising budget continues to be limited. In 2023, our marketing and branding efforts mainly focus on internet advertising and long-term customers. Intellectual Property Patents The company vigorously implements scientific and technological innovation.
Our employees participate in state pension scheme and various types of social insurance organized by municipal and provincial governments. Outsourcing agents are responsible for contributions on behalf of the leased employees. Our Research and Development Activities We have research and development staffs at each of our facilities. In total, 4 employees are dedicated to research and development.
Our employees participate in state pension scheme and various types of social insurance organized by municipal and provincial governments. Outsourcing agents are responsible for contributions on behalf of the leased employees. Our Research and Development Activities We have research and development staffs at each of our facilities. In total, 5 employees are dedicated to research and development.
However, there can be no assurance that the PRC government will not intervene or impose restrictions on the Company’s ability to transfer cash out of China. In 2022, our PRC subsidiaries did not receive any cash benefits from the VIE for services rendered to the VIE and its subsidiaries.
However, there can be no assurance that the PRC government will not intervene or impose restrictions on the Company’s ability to transfer cash out of China. In 2023, our PRC subsidiaries did not receive any cash benefits from the VIE for services rendered to the VIE and its subsidiaries.
There can be no assurance the PRC government will not intervene or impose restrictions on the Company’s ability to transfer cash out of China. In 2022 our PRC subsidiaries did not receive any cash benefits from the VIEs for services rendered to the VIEs and their subsidiaries.
There can be no assurance the PRC government will not intervene or impose restrictions on the Company’s ability to transfer cash out of China. In 2023 our PRC subsidiaries did not receive any cash benefits from the VIEs for services rendered to the VIEs and their subsidiaries.
In addition, shareholders of the operating entities are in the process of registering the equity pledge with the competent local authority. 9 Equity Option Agreements .
In addition, shareholders of the operating entities are in the process of registering the equity pledge with the competent local authority. Equity Option Agreements .
However, as our brand has over hundreds of year’s history, we have accumulated loyal consumers and gained favorable market reputation over years. 5 Chemical Business Jilin Chuangyuan is a leading chemical enterprise integrating R & D, production and sales.
However, as our brand has over hundreds of year’s history, we have accumulated loyal consumers and gained favorable market reputation over years. 6 Chemical Business Jilin Chuangyuan is a leading chemical enterprise integrating R & D, production and sales.
Allinyson is an entrepreneurial game company which has the capacity to conduct independent research, development, and operations, aiming to create the most popular and world-class influential game products. The company adheres to the team building concept of "Small but Precise" and carries out the development and operation of game business with the core R&D and operation backbone.
Allinyson is an entrepreneurial game company which has the capacity to conduct independent research, development, and operations, aiming to create the most popular and world-class influential game products. The company adheres to the team building concept of “Small but Precise” and carries out the development and operation of game business with the core R&D and operation backbone.
We take reasonable steps to protect our proprietary information and trade secrets, such as limiting disclosure of proprietary plans, methods and other similar information on a need-to-know basis and requiring employees with access to our proprietary technology to enter into confidentiality arrangements. We believe that our proprietary technology and trade secrets are adequately protected.
We take reasonable steps to protect our proprietary information and trade secrets, such as limiting disclosure of proprietary plans, methods and other similar information on a need-to-know basis and requiring employees with access to our proprietary technology to enter into confidentiality arrangements.
As of December 31, 2022, our VIE owned $2,871,665 to our WOEFs as loan. As of December 31, 2022, we were not subject to any actual foreign exchange restrictions. We have no present plans to distribute earnings or settle amounts owed under the VIE agreements which it plans to retain the retained earnings to continue to grow the business.
As of December 31, 2023, our VIE owned $2,823,782 to our WOEFs as loan. As of December 31, 2023, we were not subject to any actual foreign exchange restrictions. We have no present plans to distribute earnings or settle amounts owed under the VIE agreements which it plans to retain the retained earnings to continue to grow the business.
The ordinary shares of Jilin Chuangyuan are currently owned by Yongsheng Chen and Xiaodong Cai. On July 15, 2021, through Jiayi Technologies, the Company entered into a series of VIE agreements with Anhui Ansheng, as well as its shareholders. The ordinary shares of Anhui Ansheng are currently owned by Xiaodong Cai.
On July 15, 2021, through Jiayi Technologies, the Company entered into a series of VIE agreements with Anhui Ansheng, as well as its shareholders. The ordinary shares of Anhui Ansheng are currently owned by Xiaodong Cai.
As of December 31, 2022, the VIE owns $2,871,665 to our WFOE. As of December 31, 2022, we were not subject to any actual foreign exchange restrictions. The foregoing cash flows include all distributions and transfers between Planet Green, our PRC subsidiaries and the VIE as of the date of this annual report.
As of December 31, 2023, the VIE owns $2,823,782 to our WFOE. As of December 31, 2023, we were not subject to any actual foreign exchange restrictions. The foregoing cash flows include all distributions and transfers between Planet Green, our PRC subsidiaries and the VIE as of the date of this annual report.
Cash is transferred through our organization in the manner as follows: (1) we may transfer funds to our WFOEs through our Hong Kong subsidiaries, Promising Prospect HK Limited, and Bless Chemical Co., Ltd.
We currently conduct our operations through our subsidiaries including our WFOEs, the VIE and their respective subsidiaries. Cash is transferred through our organization in the manner as follows: (1) we may transfer funds to our WFOEs through our Hong Kong subsidiaries, Promising Prospect HK Limited, and Bless Chemical Co., Ltd.
In 2022, our marketing and branding efforts mainly focus on internet advertising and long-term customers. Organizational Structure Planet Green was incorporated in Nevada on February 4, 1986 and effective on November 12, 2009, Planet Green reincorporated in Nevada from Delaware.
In 2023, our marketing and branding efforts mainly focus on internet advertising and long-term customers. Organizational Structure Planet Green was incorporated in Nevada on February 4, 1986 and effective on November 12, 2009, Planet Green reincorporated in Nevada from Delaware. Planet Green was formerly known as American Lorain Corporation.
Because our operations are primarily located in the PRC and Hong Kong through our subsidiaries and VIE, we are subject to certain legal and operational risks associated with our operations in China and Hong Kong, including changes in the legal, political and economic policies of the Chinese government, the relations between China and the United States, or Chinese or United States regulations may materially and adversely affect our business, financial condition and results of operations.
These regulatory risks and uncertainties could become applicable to our Hong Kong subsidiaries if regulatory authorities in Hong Kong adopt similar rules and/or regulatory actions. 3 Because our operations are primarily located in the PRC and Hong Kong through our subsidiaries and VIE, we are subject to certain legal and operational risks associated with our operations in China and Hong Kong, including changes in the legal, political and economic policies of the Chinese government, the relations between China and the United States, or Chinese or United States regulations may materially and adversely affect our business, financial condition and results of operations.
Shandong Yunchu has the mature global purchasing network and has gained the trust and authority of many international brands with more than 7 years of development and accumulation. Beef products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and other food processors.
It markets and transports the best beef products from the world’s major agricultural regions. Shandong Yunchu has the mature global purchasing network and has gained the trust and authority of many international brands with more than 8 years of development and accumulation. Beef products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and other food processors.
On December 9, 2021, the Company and Jiayi Technologies, a subsidiary of the Company, entered into a Share Exchange Agreement with Shandong Yunchu and each of shareholders of Shandong Yunchu.
On December 9, 2021, the Company and Jiayi Technologies, a subsidiary of the Company, entered into a Share Exchange Agreement with Shandong Yunchu and each of shareholders of Shandong Yunchu. Upon closing of the transaction, Jiayi Technologies acquired 100% equity ownership of Shandong Yunchu.
Our Employees As of December 31, 2022, we had a total of 143 employees. Approximately 143 of our full-time employees are directly employed by our subsidiaries and VIE. The following table sets forth the allocation of employees, both direct and leased, by job function.
We believe that our proprietary technology and trade secrets are adequately protected. 16 Our Employees As of December 31, 2023, we had a total of 143 employees. Approximately 143 of our full-time employees are directly employed by our subsidiaries and VIE. The following table sets forth the allocation of employees, both direct and leased, by job function.
Although we believe that the HFCA Act and the related regulations do not currently affect us, we cannot assure you that there will not be any further implementations and interpretations of the Holding Foreign Companies Accountable Act or the related regulations, which might pose regulatory risks to and impose restrictions on us because of our operations in mainland China. 4 Planet Green is engaged in a number of diverse businesses, including consumer products, chemical products, advertising and mobile game.
Although we believe that the HFCA Act and the related regulations do not currently affect us, we cannot assure you that there will not be any further implementations and interpretations of the Holding Foreign Companies Accountable Act or the related regulations, which might pose regulatory risks to and impose restrictions on us because of our operations in mainland China.
The Company has established a stable long term cooperative relationship with these beef and mutton manufacturers. The stable supply provides competitive advantage for Company to procure various beef products with high quality and low price to meet the needs of domestic customers. We select suppliers based on price and product quality.
The stable supply provides competitive advantage for Company to procure various beef products with high quality and low price to meet the needs of domestic customers. We select suppliers based on price and product quality. We typically rely on numerous domestic suppliers, including some with whom we have a long-term relationship.
Number of Department Employees Production 88 Purchasing 2 Research and Development 4 Quality Control 8 Sales 12 Finance 7 Management 10 Administration 12 Total 143 15 We have not experienced any significant problems or disruption to our operations due to labor disputes, nor have we experienced any difficulties in recruitment and retention of experienced staff.
Number of Department Employees Production 49 Purchasing 3 Research and Development 5 Quality Control 6 Sales 26 Finance 13 Management 23 Administration 18 Total 143 We have not experienced any significant problems or disruption to our operations due to labor disputes, nor have we experienced any difficulties in recruitment and retention of experienced staff.
We rely heavily on customer feedback to assist us in the modification and development of our products. We also utilize customer feedback to assist us in the development of new products.
We also utilize customer feedback to assist us in the development of new products.
The company currently carries out a project of transformation of scientific and technological achievements with Beihua University. Specifically, it is a kind of urea formaldehyde resin adhesive with ultra-low formaldehyde emission and its preparation process, ZL 201510055885x. At the same time, as a participant, the project is applying for the national science and technology progress award.
Specifically, it is a kind of urea formaldehyde resin adhesive with ultra-low formaldehyde emission and its preparation process, ZL 201510055885x. At the same time, as a participant, the project is applying for the national science and technology progress award. Beihua University has set up a teaching and research practice base in our company.
As advised by our PRC counsel, Hubei Kaicheng Law Offices, as of the date of this annual report, our subsidiaries, WFOEs and VIE, (i) are not required to obtain additional permissions or approvals to operate their current business, (ii) are not required to obtain permission from the CSRC, the CAC, or any other Chinese authorities to issue our securities to foreign investors based on PRC laws and regulations currently in effect, and (iii) have not received or were denied such permission by any Chinese authorities.
Any failure of these entities to fully comply with such compliance requirements may cause our PRC subsidiaries or the PRC operating entities to be unable to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses or operations suspension for rectification, or other sanctions. 4 As advised by our PRC counsel, Hubei Kaicheng Law Offices, as of the date of this annual report, our subsidiaries, WFOEs and VIE, (i) are not required to obtain additional permissions or approvals to operate their current business, (ii) are not required to obtain permission from the CSRC, the CAC, or any other Chinese authorities to issue our securities to foreign investors based on PRC laws and regulations currently in effect, and (iii) have not received or were denied such permission by any Chinese authorities.
Government Regulation As a company that continuously strives to create new value, we have been doing business in five areas: tea product cultivation, packaging, and sales; manufacturing and sales of synthetic fuel products, formaldehyde products, vehicles gasoline and diesel products; manufacturing of insulation type explosion-proof skid-mounted refueling equipment and SF double-layer buried type storage tank products business; importing and distribution of beef products and multimedia design, advertising business.
The amount we spent on research and development activities during the years ended December 31, 2023 and 2022 was not a material portion of our total expenses for those years. 17 Government Regulation As a company that continuously strives to create new value, we have been doing business in five areas: tea product cultivation, packaging, and sales; manufacturing and sales of synthetic fuel products, formaldehyde products, vehicles gasoline and diesel products; manufacturing of insulation type explosion-proof skid-mounted refueling equipment and SF double-layer buried type storage tank products business; importing and distribution of beef products and multimedia design, advertising business.
The PRC government has significant authority to exert influence on the ability of a China-based company, such as us, to conduct its business, accept foreign investments or list on U.S. or other foreign exchanges.
We face various legal and operational risks and uncertainties related to being based in and having significant operations in mainland China. The PRC government has significant authority to exert influence on the ability of a China-based company, such as us, to conduct its business, accept foreign investments or list on U.S. or other foreign exchanges.
Planet Green was formerly known as American Lorain Corporation. 7 The following diagram illustrates our corporate structure including our subsidiaries and our VIE. Subsidiaries On May 9, 2019, the Company and Shanghai Xunyang Internet Technology Co., Ltd.
The following diagram illustrates our corporate structure including our subsidiaries and our VIE. Subsidiaries On May 9, 2019, the Company and Shanghai Xunyang Internet Technology Co., Ltd.
VIE Arrangements We currently have Jilin Chuangyuan as VIE under its corporate structure. The Company is considered the primary beneficiary of the VIE only for accounting purpose. On March 9, 2021, through Jiayi Technologies, the Company entered into a series of VIE agreements with Jilin Chuangyuan as well as its shareholders.
The Company is considered the primary beneficiary of the VIE only for accounting purpose. On March 9, 2021, through Jiayi Technologies, the Company entered into a series of VIE agreements with Jilin Chuangyuan as well as its shareholders. The ordinary shares of Jilin Chuangyuan are currently owned by Yongsheng Chen and Xiaodong Cai.
Raw Materials Our Supply Sources Our business depends on obtaining a reliable supply of various products, including tea, refined methanol, methanol, formaldehyde, polymer emulsion and beef products. Because of the diversity of available sources of these raw materials, we believe that our raw materials are currently in adequate supply.
Raw Materials Our Supply Sources Our business depends on obtaining a reliable supply of various products, including tea, refined methanol, methanol, formaldehyde, polymer emulsion and beef products.
Recent Regulatory Development As we conduct substantially all of our operations in China, we are subject to legal and operational risks associated with having substantially all of our operations in China, including changes in the legal, political and economic policies of the Chinese government, the relations between China and the United States, or Chinese or United States regulations may materially and adversely affect our business, financial condition and results of operations.
If the foreign exchange control system prevents Planet Green from obtaining sufficient foreign currencies to satisfy Planet Green’s foreign currency demands, Planet Green may not be able to pay dividends in foreign currencies to its shareholders. 12 Recent Regulatory Development As we conduct substantially all of our operations in China, we are subject to legal and operational risks associated with having substantially all of our operations in China, including changes in the legal, political and economic policies of the Chinese government, the relations between China and the United States, or Chinese or United States regulations may materially and adversely affect our business, financial condition and results of operations.
No dividends or distribution has been declared to paid to Planet Green from subsidiaries or its VIEs and no dividends or distribution was made to any U.S. investors. 10 Effects of PRC foreign exchange regulations on our ability to transfer assets within our organization Current foreign exchange and other regulations in the PRC may restrict our PRC subsidiaries and VIE in their ability to transfer their net assets to Planet Green and its subsidiaries and to investors.
Effects of PRC foreign exchange regulations on our ability to transfer assets within our organization Current foreign exchange and other regulations in the PRC may restrict our PRC subsidiaries and VIE in their ability to transfer their net assets to Planet Green and its subsidiaries and to investors.
While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct an investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.
While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct an investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests. 13 Our Manufacturing Facilities General We currently manufacture our products and provide services in Meihekou City of Jilin Province, Jingshan City and Xianning City of Hubei Province, Qingdao City of Shandong Province, and Toronto in Canada.
Fast Approach owns 100% equity of Shanghai Shuning. On January 4, 2021, through Jiayi Technologies, the Company entered into a series of VIE agreements with Jingshan Sanhe as well as its shareholders, which gives the Company the ultimate control of Jingshan Sanhe and its shareholders, making it operate in accordance with the will of the Company.
Upon completing the transaction, Fast Approach became a wholly owned subsidiary of the Company. Fast Approach owns 100% equity of Shanghai Shuning. On January 4, 2021, through Jiayi Technologies, the Company entered into a series of VIE agreements with Jingshan Sanhe as well as its shareholders.
Upon closing of the transaction, Jiayi Technologies acquired 100% equity ownership of Shandong Yunchu. 8 On April 8, 2022, the Company entered into a Share Purchase Agreement with Allinyson Ltd. and each of shareholders of Allinyson. Upon closing of the transaction, the Company acquired 100% equity ownership of Allinyson.
On April 8, 2022, the Company entered into a Share Purchase Agreement with Allinyson Ltd. and each of shareholders of Allinyson. Upon closing of the transaction, the Company acquired 100% equity ownership of Allinyson. VIE Arrangements We currently have Jilin Chuangyuan as VIE under its corporate structure.
Jingshan Sanhe owns a professional laboratory which includes 17 sets of professional experimental equipment operated by 4 high-end scientific research experts to ensure the high quality of raw materials and products. Jilin Chuanyuan was jointly awarded by Jilin Provincial Department of education and Jilin Provincial Department of industry and information technology as Jilin University enterprise joint technology innovation laboratory.
Jingshan Sanhe owns a professional laboratory which includes 17 sets of professional experimental equipment operated by 2 high-end scientific research experts to ensure the high quality of raw materials and products.
Therefore, we have concluded that currently it does not expect that laws and regulations in Mainland China on data security, data protection, cybersecurity or anti-monopoly to be applied to its Hong Kong subsidiaries or that the oversight of the Cyberspace Administration of China will be extended to its operations outside of Mainland China. 3 In order to operate our business, in addition to the required regular business licenses, Jingshan Sanhe is required to obtain Permit for Hazardous Chemical Products, Jilin Chuangyuan is required to obtain Safe Production License, and Shandong Yunchu is required to obtain Permit for Food Products.
Therefore, we have concluded that currently it does not expect that laws and regulations in Mainland China on data security, data protection, cybersecurity or anti-monopoly to be applied to its Hong Kong subsidiaries or that the oversight of the Cyberspace Administration of China will be extended to its operations outside of Mainland China.
We typically rely on numerous domestic suppliers, including some with whom we have a long-term relationship. Our suppliers generally include wholesale agricultural product companies, food production companies, tea bag processing companies and chemical products wholesale company. 14 Our Customers Our products are sold both in Chinese domestic market.
Our suppliers generally include wholesale agricultural product companies, food production companies, tea bag processing companies and chemical products wholesale company. Our Customers Our products are sold in Chinese domestic market.
To the extent cash or assets in the business is in the PRC or Hong Kong or in a PRC or Hong Kong entity, and may need to be used to fund operations outside of the PRC or Hong Kong, the funds and assets may not be available to fund operations or for other uses outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations by the government on our subsidiaries’ or the VIE’s ability to transfer cash and assets. 2 We face various legal and operational risks and uncertainties related to being based in and having significant operations in mainland China.
To the extent cash or assets in the business is in the PRC or Hong Kong or in a PRC or Hong Kong entity, and may need to be used to fund operations outside of the PRC or Hong Kong, the funds and assets may not be available to fund operations or for other uses outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations by the government on us, our subsidiaries’ or the VIE’s ability to transfer cash and assets. 11 Cash Flows through Our Organization: Planet Green is a holding company with no material operations of its own.
We obtain our raw materials primarily from domestic procurement for our tea production, formaldehyde and methanol products. When it comes to our beef products, we rely on overseas suppliers to import the raw materials. Shandong Yunchu carries out our beef products business.
Because of the diversity of available sources of these raw materials, we believe that our raw materials are currently in adequate supply. 15 We obtain our raw materials primarily from domestic procurement for our tea production, formaldehyde and methanol products. When it comes to our beef products, we rely on overseas suppliers to import the raw materials.
Beihua University has set up a teaching and research practice base in our company. On top of that, the company also successfully developed the urea formaldehyde resin for E1 grade waterproof particleboard, E0 grade and F grade particleboard, as well as the UF resin for E0 grade and F grade particleboard with UFC.
On top of that, the company also successfully developed the urea formaldehyde resin for E1 grade waterproof particleboard, E0 grade and F grade particleboard, as well as the UF resin for E0 grade and F grade particleboard with UFC. We rely heavily on customer feedback to assist us in the modification and development of our products.
If we are unable to claim our right to control the assets of the VIE, our common stock may decline in value or become worthless. The PRC government could even disallow the VIE structure completely, which would likely result in a material adverse change in our operations and our common stock may significantly decline in value or become worthless.
The PRC government could even disallow the VIE structure completely, which would likely result in a material adverse change in our operations and our common stock may significantly decline in value or become worthless. 2 Under our corporate structure, our ability to pay dividends and to service any debt we may incur and pay our operating expenses principally depends on dividends paid by our PRC subsidiaries and VIE.
On June 5, 2020, the Company entered into a share exchange agreement with Fast Approach to acquire all outstanding shares of Fast Approach, a corporation incorporated under the laws of Canada and in the business of operating a demand side platform. Upon completing the transaction, Fast Approach became a wholly owned subsidiary of the Company.
On August 2, 2021, as part of the internal restructure efforts to remove VIE arrangement, the Company and its subsidiary terminated series of VIE agreements and acquired 100% equity ownership of Xianning Bozhuang. 9 On June 5, 2020, the Company entered into a share exchange agreement with Fast Approach to acquire all outstanding shares of Fast Approach, a corporation incorporated under the laws of Canada and in the business of operating a demand side platform.
After the PH value is adjusted by dropping formic acid in the kettle, the material is sent into the condensation kettle through the transfer pump. Urea and additives are added into the condensation kettle according to a certain proportion for condensation reaction, and the finished product is formed after cooling treatment.
After the PH value is adjusted by dropping formic acid in the kettle, the material is sent into the condensation kettle through the transfer pump.
Consumer Products Business The Company’s consumer products business is conducted through two subsidiaries: Shandong Yunchu and Xianning Bozhuang. Shandong Yunchu imports and distributes animal proteins, mainly beef products in Chinese market. It markets and transports the best beef products from the world’s major agricultural regions.
Planet Green is engaged in a number of diverse businesses, including consumer products, chemical products, advertising and mobile game. 5 Consumer Products Business The Company’s consumer products business is conducted through two subsidiaries: Shandong Yunchu and Xianning Bozhuang. Shandong Yunchu imports and distributes animal proteins, mainly beef products in Chinese market.
As a result, it may be difficult for you to effect service of process upon us or those persons inside mainland China.
Enforcement of Civil Liabilities Currently all our directors and majority of senior executive officers either are physically reside in China for a significant portion of each year, and/or are PRC nationals. As a result, it may be difficult for you to effect service of process upon us or those persons inside mainland China.
The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents Planet Green from obtaining sufficient foreign currencies to satisfy Planet Green’s foreign currency demands, Planet Green may not be able to pay dividends in foreign currencies to its shareholders.
The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions.
It mainly purchased frozen beef from six countries: Uruguay, Brazil, Chile, Argentina, Australia and New Zealand and 25 factories are involved. The top ten suppliers include: Marrig, Minerva S.A., G & K O’Connor Pty Ltd, Frigorifico matadero Pando ontilcor S.A., Las Moras, Frigorifico de Osorno S.A., Ersinal S.A. ecoparks S.A., lorsinal S.A., and Minerva S.A.
The top ten suppliers include: Marrig, Minerva S.A., G & K O’Connor Pty Ltd, Frigorifico matadero Pando ontilcor S.A., Las Moras, Frigorifico de Osorno S.A., Ersinal S.A. ecoparks S.A., lorsinal S.A., and Minerva S.A. The Company has established a stable long term cooperative relationship with these beef and mutton manufacturers.
Our Manufacturing Facilities General We currently manufacture our products and provide services in Meihekou City of Jilin Province, Jingshan City and Xianning City of Hubei Province, Qingdao City of Shandong Province, and Toronto in Canada. 12 The following table indicates the year that operations commenced at each of the facilities and the size of the facilities.
The following table indicates the year that operations commenced at each of the facilities and the size of the facilities.
The production process for our clean fuel oil is illustrated as follows.
Urea and additives are added into the condensation kettle according to a certain proportion for condensation reaction, and the finished product is formed after cooling treatment. 14 The production process for our clean fuel oil is illustrated as follows.
Removed
Under our corporate structure, our ability to pay dividends and to service any debt we may incur and pay our operating expenses principally depends on dividends paid by our PRC subsidiaries and VIE.
Added
If we are unable to claim our right to control the assets of the VIE, our common stock may decline in value or become worthless.
Removed
These regulatory risks and uncertainties could become applicable to our Hong Kong subsidiary if regulatory authorities in Hong Kong adopt similar rules and/or regulatory actions.
Added
In order to operate our business, in addition to the required regular business licenses, Jingshan Sanhe is required to obtain Permit for Hazardous Chemical Products, Jilin Chuangyuan is required to obtain Safe Production License, and Shandong Yunchu is required to obtain Permit for Food Products.
Removed
Any failure of these entities to fully comply with such compliance requirements may cause our PRC subsidiaries or the PRC operating entities to be unable to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses or operations suspension for rectification, or other sanctions.
Added
No dividends or distribution has been declared to paid to Planet Green from subsidiaries or its VIEs and no dividends or distribution was made to any U.S. investors.
Removed
On August 2, 2021, as part of the internal restructure efforts to remove VIE arrangement, the Company and its subsidiary terminated series of VIE agreements and acquired 100% equity ownership of Xianning Bozhuang.
Added
Using polymer emulsion (VAE emulsion) as raw material, all kinds of additives are added, and then transported to the reaction kettle through diaphragm pump to warm up and mix evenly, and then transported to the mixing kettle with additives through diaphragm pump to mix evenly, then transported to the high-speed reactor through diaphragm pump to emulsify, emulsified and then transported to the spare material tank through the diaphragm pump, and then transported to the spray drying tower through the spare material tank through the diaphragm pump to form polymer powder after spray drying, and the polymer powder and various additives are mixed and screened through the mixer to be packed into the warehouse.
Removed
On December 16, 2022, Jiayi Technologies, a subsidiary of the Company, entered into a Termination Agreement with Anhui Ansheng and its shareholder to terminate all VIE arrangements with Anhui Ansheng. As a result of the completion of the transaction, the Company no longer consolidates Ansheng’s financial statements into the financial statements of the Company for accounting purpose.
Added
Shandong Yunchu carries out our beef products business. It mainly purchased frozen beef from six countries: Uruguay, Brazil, Chile, Argentina, Australia and New Zealand and 25 factories are involved.
Removed
Cash Flows through Our Organization: Planet Green is a holding company with no material operations of its own. We currently conduct our operations through our subsidiaries including our WFOEs, the VIE and their respective subsidiaries.
Added
Jilin Chuanyuan was jointly awarded by Jilin Provincial Department of education and Jilin Provincial Department of industry and information technology as Jilin University enterprise joint technology innovation laboratory by 3 high-end scientific research experts. The company currently carries out a project of transformation of scientific and technological achievements with Beihua University.
Removed
See “ Risk Factors - Risks Related to Doing Business in China ” beginning on page 30 for a detailed description of various risks related to doing business in China and other information that should be considered before making a decision to purchase any of our securities. 11 Enforcement of Civil Liabilities Currently all our directors and majority of senior executive officers either are physically reside in China for a significant portion of each year, and/or are PRC nationals.
Removed
The amount we spent on research and development activities during the years ended December 31, 2022 and 2021 was not a material portion of our total expenses for those years.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed3 unchanged
Biggest changeGranted land use rights are transferable and may be used as security for borrowings and other obligations. ITEM 3. LEGAL PROCEEDINGS Not Applicable. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 17 PART II
Biggest changeGranted land use rights are transferable and may be used as security for borrowings and other obligations.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 17 PART II 18 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 18 ITEM 6. [RESERVED] 19 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 20
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 19 PART II 20 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 20 ITEM 6. [RESERVED] 21 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 22

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−1 removed12 unchanged
Biggest changeOn June 17, 2019, the Company entered into a securities purchase agreement, pursuant to which five individuals residing in the PRC agreed to purchase an aggregate of 1,300,000 shares of the Company’s common stock, par value $0.001 per share, for an aggregate purchase price of $5,460,000, representing a purchase price of $4.20 per share.
Biggest changePursuant to the share exchange agreement, we issued an aggregate of 1,080,000 shares of common stock of the Company to the Sellers in exchange for the transfer of all of the equity interest of Xianning Bozhuang to Shanghai Xunyang. 20 On June 17, 2019, the Company entered into a securities purchase agreement, pursuant to which five individuals residing in the PRC agreed to purchase an aggregate of 1,300,000 shares of the Company’s common stock, par value $0.001 per share, for an aggregate purchase price of $5,460,000, representing a purchase price of $4.20 per share.
The transaction closed on May 20, 2021. 18 On July 15, 2021, the Company entered into a share exchange agreement with Anhui Ansheng and each of the original shareholders of Anhui Ansheng.
The transaction closed on May 20, 2021. On July 15, 2021, the Company entered into a share exchange agreement with Anhui Ansheng and each of the original shareholders of Anhui Ansheng.
Securities Authorized for Issuance under Equity Compensation Plans We did not issue any shares under our equity compensation plan in the fiscal year of 2022.
Securities Authorized for Issuance under Equity Compensation Plans We did not issue any shares under our equity compensation plan in the fiscal year of 2023.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market for our Common Stock Our common stock is quoted on the NYSE American under the symbol “PLAG”. Approximate Number of Holders of Our Common Stock As of March 31, 2023, there were 338 stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market for our Common Stock Our common stock is quoted on the NYSE American under the symbol “PLAG”. Approximate Number of Holders of Our Common Stock As of December 31, 2023, there were 322 stockholders of record of our common stock.
On April 8, 2022, the Company enterted into a share exchange agreement with Allinyson and each of the orginial shareholders of Allinyson. Pursuant to the share exchange agreement, we issued an aggregate of 7,500,000 shares of common stock of the Company to the Sellers in exchange for the transfer of all of the equity interest of Allinyson.
On April 8, 2022, the Company enterted into a share exchange agreement with Allinyson and each of the orginial shareholders of Allinyson. including its wholly-owned subsidiary Baokuan Technology (Hongkong) Limited.Pursuant to the share exchange agreement, we issued an aggregate of 7,500,000 shares of common stock of the Company to the Sellers in exchange for the transfer of all of the equity interest of Allinyson.
Removed
Such transaction closed on May 14, 2019. Pursuant to the share exchange agreement, we issued an aggregate of 1,080,000 shares of common stock of the Company to the Sellers in exchange for the transfer of all of the equity interest of Xianning Bozhuang to Shanghai Xunyang.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

14 edited+17 added−9 removed1 unchanged
Biggest changeTwelve months ended Increase / Increase / December 31, Decrease Decrease (In Thousands of USD) 2022 2021 ($) (%) Net revenues 44,757 37,768 6,989 19 Cost of revenues 40,405 33,922 6,483 19 Gross profit 4,352 3,846 506 13 Operating expenses: Selling and marketing expenses 2,167 2,053 114 6 General and administrative expenses 7,056 7,221 (165 ) (2 ) Research & Developing expenses 403 808 (406 ) (50 ) Operating loss (5,273 ) (6,236 ) 963 (15 ) Interest expense (624 ) (645 ) 21 (3 ) Other income 1,099 210 889 423 Impairment of goodwill (10,386 ) (3,263 ) (7,122 ) 218 Loss before tax (15,184 ) (9,934 ) (5,250 ) 53 Income tax expense (1,475 ) (56 ) (1,419 ) 2513 loss from continuing operations (16,660 ) (9,990 ) (6,670 ) 67 Net loss from discontinuing operations (9,192 ) - (9,192 ) N/A Net loss (25,851 ) (9,990 ) (15,861 ) 159 Net Revenues .
Biggest changeYears Ended Increase / Increase / December 31, Decrease Decrease (In Thousands of USD) 2023 2022 ($) (%) Net revenues 27,120 44,757 (17,637 ) (39 ) Cost of revenues 25,688 40,405 (14,717 ) (36 ) Gross profit 1,432 4,352 (2,920 ) (67 ) Operating expenses: Selling and marketing expenses 898 2,167 (1,269 ) (59 ) General and administrative expenses 9,036 7,056 1,980 28 Research & Developing expenses 269 403 (134 ) (33 ) Operating loss (8,771 ) (5,273 ) (3,498 ) 66 Interest expense (496 ) (624 ) 128 (21 ) Other income (expense) (123 ) 1,099 (1,222 ) (111 ) Impairment of goodwill - (10,386 ) 10,386 (100 ) Share of losses from equity method investments (569 ) (84 ) (485 ) 577 Loss on disposal of equity investments (10,849 ) - (10,849 ) N/A Loss before tax (20,808 ) (15,268 ) (5,540 ) 36 Income tax expense (35 ) (1,475 ) 1,440 (98 ) Loss from continuing operations (20,843 ) (16,743 ) (4,100 ) 24 Net loss from discontinuing operations - (9,192 ) 9,192 (100 ) Net (loss) income (20,843 ) (25,935 ) 5,092 (20 ) 22 Net Revenues .
As of December 31, 2022, there were no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company’s consolidated financial statements. Off-Balance Sheet Arrangements We do not have any off-balance arrangements. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not applicable.
As of December 31, 2023, there were no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company’s consolidated financial statements. Off-Balance Sheet Arrangements We do not have any off-balance arrangements. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS We are headquartered in Flushing, New York City.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS We are headquartered in Flushing, New York.
After a series of acquisitions and dispositions in 2022 and 2021, our primary business, which is carried out by Shandong Yunchu, Jingshan Sanhe, Jilin Chuangyuan, Fast Approach Inc. and Xianning Bozhuang, is: ● Tea products cultivation, packaging, and sales; ● To sell high-grade synthetic fuel products ● To distribute beef and mutton products. ● To sell f ormaldehyde, urea-formaldehyde glue, methylal, and clean fuel oil ● Online advertising services and mobile games; Results of Operations The following discussion should be read in conjunction with the company’s audited consolidated financial statement for the years ended December 31, 2022, and 2021 and related notes to that.
After a series of acquisitions and dispositions in 2023 and 2022, our primary business, which is carried out by Shandong Yunchu, Jingshan Sanhe, Jilin Chuangyuan, Fast Approach Inc and Xianning Bozhuang, is: ● To sell black tea product cultivation, packaging, and sales; ● To sell high-grade synthetic fuel products; ● To sell f ormaldehyde, urea-formaldehyde glue, methylal, and clean fuel oil; ● Online advertising services and mobile game.
Cash Flows Data: For the years ended December 31 (In thousands of U.S. dollars) 2022 2021 Net cash flows used in operating activities (9,012 ) (519 ) Net cash flows used in investing activities (3,854 ) (11,814 ) Net cash flows provided by financing activities 10,841 8,932 21 Operating Activities Net cash used in operating activities from operations was approximately $9.01 million and $0.52 million for the year ended December 31, 2022, and 2021.
Cash Flows Data: For the years ended December 31 (In thousands of U.S. dollars) 2023 2022 Net cash flows used in operating activities (5,282 ) (9,012 ) Net cash flows provided by investing activities 2,670 (3,854 ) Net cash flows provided by financing activities 2,888 10,841 Operating Activities Net cash used in operating activities decreased by $3.73 million to $5.28 million during the year ended December 31, 2023 from $9.01 million during the year ended December 31, 2022.
However, there is no assurance that we will raise additional capital or reduce discretionary spending to provide liquidity if needed. We cannot be sure of the availability or terms of any alternative financing arrangements. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.
In that case, our plans include pursuing alternative financing arrangements or reducing expenditures as necessary to meet our cash requirements. However, there is no assurance that we will raise additional capital or reduce discretionary spending to provide liquidity if needed. We cannot be sure of the availability or terms of any alternative financing arrangements.
We expect to continue to finance our operations and working capital needs in 2022 from cash generated from operations and, if needed, private financings. Suppose available liquidity is insufficient to meet our operating and loan obligations as they come due. In that case, our plans include pursuing alternative financing arrangements or reducing expenditures as necessary to meet our cash requirements.
The debt to assets ratio was 54.40% and 33.16% as of December 31, 2023 and December 31, 2022, respectively. We expect to continue to finance our operations and working capital needs in 2023 from cash generated from operations and, if needed, private financings. Suppose available liquidity is insufficient to meet our operating and loan obligations as they come due.
Critical Accounting Policies The preparation of financial statements in conformity with the United States generally accepted accounting principles requires our management to make assumptions, estimates, and judgments that affect the amounts reported in the financial statements, including the notes to that, and related disclosures of commitments contingencies, if any.
This decline primarily stems from a reduction of $11.10 million in proceeds generated from the issuance of common stock as opposed to 2022, partially offset by an increase of $2.97 million attributed to changes involving related parties during 2023. 24 Critical Accounting Policies The preparation of financial statements in conformity with the United States generally accepted accounting principles requires our management to make assumptions, estimates, and judgments that affect the amounts reported in the financial statements, including the notes to that, and related disclosures of commitments contingencies, if any.
Investing Activities Net cash used in investing activities for the twelve months ended December 31, 2022 was $3.85 million, representing a decrease of $7.96million in net cash used in investing activities from $11.8 million for the same period of 2021.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2023 was $2.67 million, representing an increase of $6.52 million from the $3.85 million used in investing activities for the same period in 2022.
Net Loss Our net loss increased by $15.86 million, or 159%, to a net loss of $25.85 million for the twelve months ended December 31, 2022 from $9.99 million in net loss for the twelve months ended December 31, 2021.
Net Loss Our net loss decreased by $5.09 million, or 20%, to a net loss of $20.84 million for the year ended December 31, 2023 from $25.94 million in net loss for the year ended December 31, 2022.
Our gross profit increased by $0.51 million, or 13% to $4.35 million for the twelve months ended December 31, 2022 from $3.85 million for the twelve months ended December 31, 2021. This increase was mainly due to the aforementioned reasons, attributable to the acquisition of certain subsidiaries and VIEs in 2022. 20 Operating Expenses Selling and Marketing Expenses.
Our selling and marketing expenses decreased by $1.27 million, or 59%, to $0.90 million for the year ended December 31, 2023 from $2.17 million for the year ended December 31, 2022. This decrease was mainly due to the aforementioned reasons, attributable to a decrease in sales of revenue and the disposal of certain subsidiaries in 2022. General and Administrative Expenses.
Our liquidity needs meet our working capital requirements, operating expenses, and capital expenditure obligations. In the reporting period in the fiscal year 2022, our primary sources of financing have been cash generated from operations and private placements.
In the reporting period in the fiscal year 2023, our primary sources of financing have been cash generated from operations and private placements. 23 As of December 31, 2023, we had cash and cash equivalents of $436.38 thousand compared to $93.49 thousand as of December 31, 2022.
This increase was mainly due to losses of disposal of the subsidiary, Anhui Ansheng Petrochemical Equipment Co., Ltd., impairment of goodwill and our effort to expand our business. Going Concern and Capital Resources In assessing our liquidity, we monitor and analyze our cash-on-hand and operating and capital expenditure commitments.
This decrease was mainly due to the aforementioned reasons, attributable to a decrease in sales of revenue and the disposal of certain subsidiaries in 2022. Liquidity and Capital Resources In assessing our liquidity, we monitor and analyze our cash-on-hand and operating and capital expenditure commitments. Our liquidity needs meet our working capital requirements, operating expenses, and capital expenditure obligations.
During the twelve months ended December 31, 2022, we experienced an increase in cost of revenue of $6.48 million or 19%, in comparison to the twelve months ended December 31, 2021, from approximately $33.92 million to $40.41 million. This increase was mainly due to the acquisition of certain subsidiaries and VIE in 2022. Gross Profit .
The residual decrease was attributable to disposal of certain subsidiaries in late 2022. Cost of Revenues. During the year ended December 31, 2023, we experienced a decrease in cost of revenue of $14.72 million or 36%, in comparison to the year ended December 31, 2022, from approximately $40.41 million to $25.69 million.
Removed
Our net revenues for the twelve months ended December 31, 2022 amounted to $44.76 million, which represents an increase of approximately $6.99 million, or 19%, from $37.77 million for the twelve months ended December 31, 2021. This increase was attributable to the acquisition of certain subsidiaries and VIE in 2022. Cost of Revenues.
Added
Results of Operations The following discussion should be read in conjunction with the company’s audited consolidated financial statement for the years ended December 31, 2023, and 2022 and related notes to that.
Removed
Our selling and marketing expenses increased by $112,000, or 5%, to $2.17 million for the twelve months ended December 31, 2022 from $2.05 million for the twelve months ended December 31, 2021.
Added
Our net revenues for the fiscal year ending on December 31, 2023 amounted to $27.12 million, reflecting a decline of approximately $17.64 million or 39% compared to the previous year’s figure of $44.76 million (ending on December 31, 2022).
Removed
The selling and marketing expenses mainly come from transportation and storage cost of $0.72 million; the sales staff salaries cost of $0.36 million and selling commission of $0.43 million. General and Administrative Expenses.
Added
In the previous fiscal year, 50% of our total revenue was generated from the sale of a diverse range of food products to restaurants. However, this segment has been significantly impacted by the adverse effects of COVID-19, leading to a decline in sales from $23.34 million in 2022 to $14.32 million in 2023.
Removed
We experienced a slight decrease in general and administrative expense of $181,000 from $7.22 million to approximately $7.01 million for the twelve months ended December 31, 2022, compared to the twelve months ended December 31, 2021. This cost decrease was mainly due to the decline in third party service fees.
Added
This change was mainly due to a decrease in sales of revenue, as discussed above, and disposal of certain subsidiaries in late 2022. Gross Profit .
Removed
The General and Administrative Expenses mainly come from third party service fees of $1.96 million; administrative staff salary costs of $1.60 million and depreciation; amortization expense of $0.81 million and other daily sporadic management costs.
Added
Our gross profit declined by $2.92 million, representing a decrease of 67% to $1.43 million for the fiscal year ended December 31, 2023 compared to $4.35 million for the fiscal year ended December 31, 2022.
Removed
As of December 31, 2022, we had cash and cash equivalents (including restricted cash) of $93,500 compared to $1.13 million as of December 31, 2021. The debt to assets ratio was 33.16% and 40.41% as of December 31, 2022 and December 31, 2021, respectively.
Added
This decline can be primarily attributed to the aforementioned factors, namely a decrease in sales revenue and the divestiture of certain subsidiaries towards the end of 2022. Additionally, another contributing factor was a slight increase in the average combined cost per unit of our products.
Removed
Net Cash decrease in operating activities for the year ended December 31, 2022, was mainly comprised of non-cash effects of depreciation and amortization expense of approximately $1.48 million, impairment of inventories of approximately $0.2 million, impairment of goodwill of about $10.38 million, loss on disposal of subsidiaries of approximately $9.57 million and the decrease of account receivable of approximately $0.66 million, the reduction in accounts payable of about $0.36 million and the decrease in other payables and accrued liabilities of about $2.97 million.
Added
The gross profit margin decreased from 10.77% in 2022 to 5.57% in 2023, representing a decrease of 5.2%. This decline is primarily attributed to the significant reduction in sales of cold chain food mentioned earlier, as well as a notable increase in associated warehousing costs. Operating Expenses Selling and Marketing Expenses.
Removed
Cash used in investing activities for the year ended December 31, 2022 was mainly comprised of the partial investment payments of approximately $4.1 million that we made in relation to the Xiangtian Energy Co., Ltd.
Added
Our general and administrative expenses for the year ended December 31, 2023 increased by $1.98 million, or 28%, to $9.04 million compared to the previous year’s $7.06 million. After adjusting for the impact of $1.10 million from last year’s General and Administrative Expenses generated by the disposed subsidiary, the increase in fiscal 2023 is approximately $3.03 million.
Removed
Financing Activities Net cash provided by financing activities for the twelve months ended December 31, 2022, was $10.84 million, representing an increase of $1.91 million in net cash provided by financing activities from $8.93 million for the same period of 2021. This is mainly due to the proceeds from the issuance of common stock.
Added
The primary reason for this increase is attributed to inadequate inventory management, resulting in a loss of inventory of approximately $1.97 million and an expected credit loss of $2.76 million on trade receivables, partially offset by a decrease of $1.70 million attributed to cost control during 2023.
Added
Going Concern The accompanying 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 $20,843,796 attributable to common shareholders for the year ended December 31, 2023.
Added
As of December 31, 2023, the Company had an accumulated deficit of $140,724,597, a working capital deficit of $6,675,220, its net cash used in operating activities for the year ended December 31, 2023 was $ 5,282,343. These factors raise substantial doubt on the Company’s ability to continue as a going concern.
Added
The accompanying audited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Added
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.
Added
If management is unable to execute its plan, the Company may become insolvent. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.
Added
This decrease was primarily due to the decrease in net loss excluding non-cash expenses, gains and losses of $1.42 million and changes in net operating assets and liabilities of $5.15 million.
Added
This increase is primarily attributed to the disposal of a certain subsidiary amounting to $2.77 million and a decrease in long-term investments totaling $4.10 million compared to the previous year.
Added
Financing Activities Net cash provided by financing activities for the year ended December 31, 2023, amounted to $2.88 million, indicating a decrease of $7.95 million compared to the corresponding period in 2022.

Other PLAG 10-K year-over-year comparisons