Planet Green Holdings Corp.: Form 10-Q for the period ended Sep 30, 2023
Filed with the SEC on Nov 14, 2023 and accepted by EDGAR at Nov 14, 2023, 11:31 ET.
Management's discussion and analysis
As filed, 11,867 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
We are headquartered in Flushing, New York City. After a series of acquisitions and dispositions during the past three years, 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 formaldehyde, urea-formaldehyde glue, methylal, and clean fuel oil
- Online advertising services and mobile games;
Results of Operations
Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022.
The following discussion should be read in conjunction with the company’s unaudited condensed consolidated financial statement for the three months ended September 30, 2023, and 2022 and related notes to that.
(In Thousands of USD)
| Three months ended September 30, 2023 | 2022 | Increase / Decrease ($) | Increase / Decrease (%) | |
|---|---|---|---|---|
| Net revenues | 4,183 | 10,264 | (6,081) | (59) |
| Cost of revenues | 3,834 | 9,566 | (5,732) | (60) |
| Gross profit | 349 | 698 | (349) | (50) |
| Operating expenses: | ||||
| Selling and marketing expenses | 234 | 562 | (328) | (58) |
| General and administrative expenses | 1,179 | 2,166 | (987) | (46) |
| Research & Developing expenses | 62 | 79 | (17) | (22) |
| Operating income (loss) | (1,126) | (2,109) | 983 | (47) |
| Interest income (expense) | (123) | (161) | 38 | 24 |
| Other income (expense) | 4 | 11 | (7) | (64) |
| (Loss) income before tax | (1,245) | (2,258) | 1,013 | (45) |
| Income tax expense/(income) | (33) | (38) | 5 | (13) |
| Net (loss) income | (1,278) | (2,296) | 1,018 | (44) |
Net Revenues. Our net revenues for the three months ended September 30, 2023 amounted to $4.18 million, which represents a decrease of approximately $6.08 million, or 59%, from $10.26 million for the three months ended September 30, 2022. This decrease was attributable to a mixture of effects: the continued adverse impact of the COVID-19 pandemic on the Company, which resulted in lower revenue per subsidiary compared to the same period last year and the disposal of subsidiary Anhui Ansheng in December 2022.
Cost of Revenues. During the three months ended September 30, 2023, we experienced a decrease in cost of revenue of $5.73 million or 60%, in comparison to the three months ended September 30, 2022, from approximately $9.57 million to $3.83 million. This decrease was mainly due to the decrease in the revenue in the current three months period compared to the same period in 2022 and the disposal of the subsidiary Anhui Ansheng in December 2022.
Gross Profit. Our gross profit decreased by $0.35 million, or 50% to $0.35 million for the three months ended September 30, 2023 from $0.70 million for the three months ended September 30, 2022. This decrease was mainly due to the aforementioned reasons, attributable to the disposal of the subsidiary Anhui Ansheng Petrochemical Equipment Co. Ltd. in December 2022.
Operating Expenses
Selling and Marketing Expenses. Our selling and marketing expenses decreased by $0.33 million, or 58%, to $0.23 million for the three months ended September 30, 2023 from $0.56 million for the three months ended September 30, 2022. The selling and marketing expenses mainly come from transportation and storage cost and the sales staff salaries cost decline.
General and Administrative Expenses. We experienced a decrease in general and administrative expense of $0.99 million from $2.16 million to approximately $1.18 million for the three months ended September 30, 2023, compared to the three months ended September 30, 2022. This expense decrease was mainly due to kinds of expenses controlled and the disposal of the Anhui Ansheng in December 2022, where the corresponding administrative staff salary costs, the depreciation, the amortization expense and other management costs decreased comparing with the same period in the previous year.
Net Loss
Our net loss decreased by $1.02 million, or 44%, to a net loss of $1.28 million for the three months ended September 30, 2023 from $2.30 million in net loss for the three months ended September 30, 2022. This decrease was mainly due to the disposal of the subsidiary Anhui Ansheng in December 2022
Nine Months Ended September 30, 2023 Compared to Nine months Ended September 30, 2022.
The following discussion should be read in conjunction with the company’s unaudited condensed consolidated financial statement for the nine months ended September 30, 2023, and 2022 and related notes to that.
(In Thousands of USD)
| Nine months ended September 30, 2023 | 2022 | Increase / Decrease ($) | Increase / Decrease (%) | |
|---|---|---|---|---|
| Net revenues | 17,291 | 37,788 | (20,497) | (54) |
| Cost of revenues | 16,653 | 35,185 | (18,532) | (53) |
| Gross profit | 638 | 2,603 | (1,965) | (75) |
| Operating expenses: | ||||
| Selling and marketing expenses | 721 | 1,497 | (776) | (52) |
| General and administrative expenses | 3,257 | 5,657 | (2,400) | (42) |
| Research & Developing expenses | 196 | 151 | 45 | 30 |
| Operating income (loss) | (3,536) | (4,702) | 1,166 | (25) |
| Interest income (expense) | (368) | (479) | 111 | (23) |
| Other income (expense) | 101 | 304 | (203) | (67) |
| Loss on disposal of equity investments | (10849) | - | (10,849) | N/A |
| (Loss) income before tax | (14,652) | (4,877) | (9,775) | 200 |
| Income tax expense/(income) | (112) | (175) | 63 | (36) |
| Net (loss) income | (14,764) | (5,052) | (9,712) | 192 |
Net Revenues. Our net revenues for the nine months ended September 30, 2023 amounted to $17.30 million, which represents a decrease of approximately $20.50 million, or 54%, from $37.79 million for the nine months ended September 30, 2022. The main reasons please reference to the foregoing description about net revenues for the three months ended September 30, 2023.
Cost of Revenues. During the nine months ended September 30, 2023, we experienced a decrease in cost of revenue of $18.53 million or 53%, in comparison to the nine months ended September 30, 2022, from approximately $35.19 million to $16.65 million. The main reasons please reference to the foregoing description about costs of revenues for the three months ended September 30, 2023.
Gross Profit. Our gross profit decreased by $1.97 million, or 75% to $0.64 million for the nine months ended September 30, 2023 from $2.60 million for the nine months ended September 30, 2022. This decrease was mainly due to the aforementioned reasons, attributable to the decrease in the revenue in the current nine months period compared to the same period in 2022 and the disposal of the subsidiary Anhui Ansheng in December 2022.
Operating Expenses
Selling and Marketing Expenses. Our selling and marketing expenses decreased by $0.78 million, or 52%, to $0.72 million for the nine months ended September 30, 2023 from $1.50 million for the nine months ended September 30, 2022. The selling and marketing expenses mainly come from transportation and storage cost and the sales staff salaries cost decline.
General and Administrative Expenses. We experienced a decrease in general and administrative expense of $2.40 million from $5.66 million to approximately $3.26 million for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2023. This expense decrease was mainly due to kinds of expenses controlled and the disposal of the subsidiary Anhui Ansheng in December 2022, the corresponding administrative staff salary costs, the depreciation, the amortization expense and other daily sporadic management costs decreased comparing with the same period in the previous year.
Net Loss
Our net loss increased by $9.71 million, or more than 100%, to a net loss of $14.76 million for the nine months ended September 30, 2023 from $5.05 million in net loss for the nine months ended September 30, 2022. This decrease was mainly due to the disposal of the subsidiary Anhui Ansheng in December 2022.
Going Concern and Capital Resources
In assessing our liquidity, we monitor and analyze our cash-on-hand and operating and capital expenditure commitments. Our liquidity needs meet our working capital requirements, operating expenses, and capital expenditure obligations. In the reporting period in the fiscal period ended September 30, 2023, our primary sources of financing have been cash generated from operations.
As of September 30, 2023, we had cash and cash equivalents (including restricted cash) of $0.31 million and a working capital deficit of $5.16 million. For the nine months ended September 30, 2023, we have incurred a net loss of $14,764,145. These factors raise substantial doubt on our ability to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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. In that case, our plans include pursuing alternative financing arrangements or reducing expenditures as necessary to meet our cash requirements. However, there is no assurance that we will raise additional capital or reduce discretionary spending to provide liquidity if needed. We cannot be sure of the availability or terms of any alternative financing arrangements.
The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.
Cash Flows Data:
(In thousands of U.S. dollars)
| For the nine months ended September 30 2023 | 2022 | |
|---|---|---|
| Net cash flows used in operating activities | (4,241) | (10,208) |
| Net cash flows used in investing activities | 2,699 | (3,271) |
| Net cash flows provided by financing activities | 1,528 | 11,315 |
Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2023 was approximately $4.24 million, while net cash used in operating activities for the same period in 2022 amounted to $10.21 million. Net cash increase in operating activities was mainly due to the increase in advance from customers and other payables.
Investing Activities
Net cash provided in investing activities for the nine months ended September 30, 2023 was $2.70 million, representing an increase of $5.97 million in net cash used in investing activities from $3.27 million for the same period of 2022.
Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2023, was $1.53 million, representing a decrease of $10.3 million in net cash provided by financing activities from $11.3 million for the same period of 2022.
Critical Accounting Policies
The preparation of unaudited condensed consolidated 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 unaudited condensed consolidated financial statements, including the notes to that, and related disclosures of commitments contingencies, if any.
We consider our critical accounting policies to require the more significant judgments and estimates in preparing unaudited condensed consolidated financial statements, including those outlined in Note 2 to the unaudited condensed consolidated financial statements included herein.
Off-Balance Sheet Arrangements
We do not have any off-balance arrangements.
Controls and procedures
As filed, 3,009 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2023. Based upon his evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective.
As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Risk factors
As filed, 701 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Risk Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the Company’s registration statement on Form S3/A as filed with the SEC on April 18, 2023. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Company’s registration statement Form S3/A as filed with the SEC on April 18, 2023.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2023-09-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2023-07-01 to 2023-09-30 | $4.2m | us-gaap:Revenues |
| Revenue | 9 months2023-01-01 to 2023-09-30 | $17.3m | us-gaap:Revenues |
| Cost of revenue | 3 months2023-07-01 to 2023-09-30 | $3.8m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months2023-01-01 to 2023-09-30 | $16.7m | us-gaap:CostOfRevenue |
| Gross profit | 3 months2023-07-01 to 2023-09-30 | $349.4k | us-gaap:GrossProfit |
| Gross profit | 9 months2023-01-01 to 2023-09-30 | $638.5k | us-gaap:GrossProfit |
| Research and development | 3 months2023-07-01 to 2023-09-30 | $62.0k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months2023-01-01 to 2023-09-30 | $195.9k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months2023-07-01 to 2023-09-30 | −$1.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months2023-01-01 to 2023-09-30 | −$3.5m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months2023-07-01 to 2023-09-30 | $123.2k | us-gaap:InterestExpense |
| Interest expense | 9 months2023-01-01 to 2023-09-30 | $368.9k | us-gaap:InterestExpense |
| Income tax | 3 months2023-07-01 to 2023-09-30 | $33.4k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months2023-01-01 to 2023-09-30 | $112.1k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2023-07-01 to 2023-09-30 | −$1.3m | us-gaap:NetIncomeLoss |
| Net income | 9 months2023-01-01 to 2023-09-30 | −$14.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2023-07-01 to 2023-09-30 | −$0.02 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months2023-01-01 to 2023-09-30 | −$0.20 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2023-07-01 to 2023-09-30 | −$0.02 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months2023-01-01 to 2023-09-30 | −$0.20 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2023-07-01 to 2023-09-30 | 72,081,930 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months2023-01-01 to 2023-09-30 | 72,081,930 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months2023-01-01 to 2023-09-30 | −$4.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months2023-01-01 to 2023-09-30 | $70.9k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | At period end2023-09-30 | $313.5k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | At period end2023-09-30 | $18.6m | us-gaap:AssetsCurrent |
| Total assets | At period end2023-09-30 | $49.4m | us-gaap:Assets |
| Current liabilities | At period end2023-09-30 | $23.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | At period end2023-09-30 | $24.2m | us-gaap:Liabilities |
| Long-term debt | At period end2023-09-30 | $278.6k | us-gaap:LongTermDebt |
| Shareholders' equity | At period end2023-09-30 | $25.2m | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0001213900-23-086572. Last ingested by Listed: Nov 6, 2026, 12:03 ET. Listed shows no prices and gives no investment advice.