What changed in this filing

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Item 1. Business

2022-03-31 compared with 2021-03-31 · 419 added, 375 removed, 12 unchanged (99% of the section changed)

of Our Business

Planet Green is a Nevada company established in

1986 and is headquartered in Flushing, New York.

We are a diversified technology and consumer products company with presence in North

America and China in the follow businesses:

Chemical Products, Tea Products and Online Advertising Services.

Planet Green manages its operation in three

business segments which include:

to grow, produce

and distribute Cyan brick tea, black tea and green tea in China;

to research, develop, manufacture and sell chemical products including formaldehyde, urea formaldehyde adhesive, methylal, ethanol fuel, fuel additives and clean fuel in

to develop and operate a demand side platform which empowers buyers of advertising to manage and optimize their digital advertising across different real-time bidding networks in North America and China

(COVID-19) Update

there is an ongoing outbreak of a novel strain of coronavirus (COVID-19) first identified in China and has since spread rapidly

The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities

globally for the past few months.

In March 2020, the World Health Organization declared the COVID-19 as a pandemic.

rapidly expanding nature of the COVID-19 pandemic, and because substantially all of our business operations and our workforce

are concentrated in China, our business, results of operations and financial condition have been and will continue to be adversely

Potential impact to our results of operations will also depend on future developments and new information that may emerge

regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain

the COVID-19 or mitigate its impact, almost all of which are beyond our control.

impacts of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following:

We temporally closed

our offices and production facilities to adhere to the policy from February 2020 until April 2020, as required by relevant

PRC regulatory authorities.

Our offices are slowly reopening pursuant to local guidelines.

In the first quarter of 2020, the

COVID-19 outbreak has caused disruptions in our manufacturing operations, which have resulted in delays in the shipment of

products to certain of our customers.

Some of our employees

were in mandatory self-quarantine from January 2020 to April 2020.

Our customers have

been negatively impacted by the outbreak, which may reduce the demand of our products.

As a result, our revenue and income

may be negatively impacted in 2020.

The situation may

worsen if the COVID-19 pandemic continues.

We continued to closely monitor our collections throughout 2020.

prolonged disruption or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within

any of our production facilities could continue to result in delays in the shipment of products to our customers, increased costs

and reduced revenue.

cannot foresee whether the outbreak of COVID-19 will be effectively contained, nor can we predict the severity and duration of

If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial condition

may be materially and adversely affected as a result of the deteriorating market outlook, the slowdown in regional and national

economic growth, weakened liquidity and financial condition of our customers or other factors that we cannot foresee.

factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties

in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely

impact our business, financial condition and results of operations.

Now that we are closer to containment of the COVID-19 pandemic

with the emergence of several very effective vaccines, market participants expect the economy will fully recover over the next

Organizational

was incorporated on February 4, 1986 and was formerly known as “American Lorain Corporation.”

Effective November 12,

2009, PLAG reincorporated in Nevada from Delaware.

following diagram illustrates our corporate structure as of the date of this annual report on Form 10-K, including our subsidiaries

and our VIEs.

We are a company that continuously strives

to create new value and relentlessly to capture new opportunities, which is why we are growing and strengthening the internet-based

business as another pillar towards the next growth stage.

In addition to our Chinese domestic business, we set out for global market

by acquiring 100% shares of Fast Approach in Canada on June 5, 2020 to embark on demand-side platform (DSP) business in North America.

A demand-side platform is a system that allows buyers of digital advertising inventory to manage multiple advertisement exchange

and data exchange through one interface.

Fast Approach is the first 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.

Fast Approach owns 100% equity of Shanghai Shuning in China.

We believe this acquisition will accelerate our

global business growth, leading to further increasing the Planet Green enterprise value as well.

On May 29, 2020, the Planet Green Holdings Corporation

(BVI) incorporated Lucky Sky Planet Green Holdings Co., Limited, a limited company incorporated in Hong Kong.

On June 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, as part of the reorganization,

Planet Green Holdings Corporation (BVI) transferred its 100% equity interest in Lucky Sky Holdings Corporations (H.K.) Limited

to Rui Tang, a unrelated party, at nominal price.

September 27, 2018, through Shanghai Xunyang, the Company entered into exclusive VIE agreements with Beijing Lorain, Luotian Lorain,

Shandong Greenpia, Taishan Muren, and Shenzhen Lorain and their shareholders that give the Company the ability to substantially

influence those companies’

daily operations and financial affairs and appoint their senior executives.

The Company is considered

the primary beneficiary of these operating companies.

May 14, 2019, through Shanghai Xunyang, the Company entered into a series of VIE agreements with Xianning Bozhuang and its equity

holders to obtain control and became the primary beneficiary of Xianning Bozhuang.

The Company consolidated Xianning Bozhuang’s

accounts as its VIE.

December 20, 2019, we sold 100% of equity interest in Shanghai Xunyang and terminated its VIE agreements with Xianning Bozhuang,

Shenzhen Lorain and Taishan Muren.

December 20, 2019, through Lucky Sky Petrochemical, the Company entered into exclusive VIE agreements (“VIE Agreements”)

with Taishan Muren, Xianning Bozhuang and Shenzhen Lorain, as well as their shareholders, which give the Company the ability to

substantially influence those companies’

daily operations and financial affairs and appoint their senior executives.

Company is considered the primary beneficiary of these operating companies and it consolidates their accounts as VIEs.

September 8, 2020, the Company’s Board of Directors resolved to discontinue the operation of Shenzhen Lorain and Taishan

Muren due to the continued loss of such two subsidiaries.

On September 15, 2020, Lucky Sky Petrochemical terminated the VIE agreements

with Shenzhen Lorain and Taishan Muren.

January 4, 2021, through Jiayi Technologies, formerly known as Lucky Sky Petrochemical, the Company entered into a series of VIE

agreements with Jingshan Sanhe Luckysky as well as its shareholders, which gives the Company the ultimate control of Jingshan Sanhe

Luckysky and its shareholders, making it operate in accordance with the will of the Company.

The Company is

considered the primary beneficiary of Jingshan Sanhe Luckysky and it consolidates its accounts as VIEs.

March 9, 2021, through Jiayi Technologies, the Company entered into a series of VIE agreements with Jilin Chuangyuan as well as

its shareholders, which gives the Company the ultimate control of Jilin Chuangyuan and its shareholders, making it operate in

accordance with the will of the Company.

The Company is considered the primary beneficiary of Jilin Chuangyuan and it consolidates

its accounts as VIEs.

Overview of Our Business

PLAG, headquartered in Flushing, NY, is not an operating company but a

Nevada holding company with operations primarily conducted by our directly owned subsidiaries and through our variable interest entities,

After a series of acquisitions and dispositions in 2020 and 2021, our primary business, which is carried out by Fast Approach,

Jingshan Sanhe Luckysky, Jilin Chuangyuan, Xianning Bozhuang, Anhui Ansheng and Shandong Yunchu, is:

to provide food and beverage products such as Cyan

brick tea, black tea and green tea as well as beef products in China;

to research, develop, manufacture and sell products

of formaldehyde, urea formaldehyde adhesive, methylal, ethanol fuel, fuel additives and clean fuel in China;

to develops and manufactures skid-mounted refueling

equipment, LNG cryogenic equipment and oil storage tank, and sells such products in China;

to develop and operate a demand side platform which

empowers buyers of advertising to manage and optimize their digital advertising across different real-time bidding networks in North

Organizational Structure

PLAG was incorporated on February 4, 1986 and

was formerly known as “American Lorain Corporation.” Effective November 12, 2009, PLAG reincorporated in Nevada from Delaware.

The following diagram illustrates our corporate

structure as of the date of this annual report on Form 10-K, including our subsidiaries and our VIEs.

On May 9, 2019, the Company and Shanghai Xunyang Internet Technology

Co., Ltd., a subsidiary of the Company, entered into a Share Exchange Agreement with Xianning Bozhuang, and each of the shareholders of

Xianning Bozhuang, pursuant to which, among other things and subject to the terms and conditions contained therein, the Subsidiary agreed

to effect an acquisition of Xianning Bozhuang by acquiring from the Sellers all of the outstanding equity interests of Xianning Bozhuang.

On May 14, 2019, the Company closed the acquisition transaction and entered into a series of VIE agreements with Xianning Bozhuang and

its shareholders.

For company internal restructure purpose, on December 20, 2019, Xianning Bozhuang terminated the VIE agreements with

Shanghai Xunyang Internet Technology Co., Ltd.

and entered into similar series of VIE agreements with Jiayi Technologies on the same day.

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.

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.

Approach owns 100% equity of Shanghai Shuning.

On January 4, 2021, through Jiayi Technologies, formerly known as Lucky

Sky Petrochemical, the Company entered into a series of VIE agreements with Jingshan Sanhe Luckysky as well as its shareholders, which

gives the Company the ultimate control of Jingshan Sanhe Luckysky and its shareholders, making it operate in accordance with the will

of the Company.

The Company is considered the primary beneficiary of Jingshan Sanhe Luckysky and it consolidates its accounts as VIEs.

On September 10, 2021, as part of the internal restructure efforts to remove VIE arrangement, Hubei Bulaisi acquired 85% equity ownership

of Jingshan Sanhe Lucksky and Jiayi Technologies terminated the VIE agreements with Jingshan Sanhe Luckysky on the same date.

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.

VIE Arrangement

On March 9, 2021, through Jiayi Technologies, the Company entered

into a series of VIE agreements with Jilin Chuangyuan as well as its shareholders, which gives the Company 75% control of Jilin Chuangyuan

and its shareholders, making it operate in accordance with the will of the Company.

The Company is considered the primary beneficiary

of Jilin Chuangyuan and it consolidates its accounts as VIEs.

On November 30, 2021, through Jiayi Technologies, the Company entered into

a series of VIE agreements with Jilin Chuangyuan as well as its shareholders, which gives the Company the remaining 25% of the outstanding

equity interests of Jilin Chuangyuan.

As a result of the completion of the transaction, the Company owns 100% of Jilin Chuangyuan through

Jiayi Technologies, making Jilin Chuangyuan operate in accordance with the will of the Company.

The Company is considered the primary

beneficiary of Jilin Chuangyuan and it consolidates its accounts as VIEs.

On July 15, 2021, through Jiayi Technologies, the Company entered

into a series of VIE agreements with Anhui Ansheng as well as its shareholders, which gives the Company 66% control of Anhui Ansheng

and its shareholders, making it operate in accordance with the will of the Company.

The Company is considered the primary beneficiary

of Jilin Chuangyuan and it consolidates its accounts as VIEs.

On February 11, 2022, through Jiayi Technologies, the Company entered into

a series of VIE agreements with Xiaodong Cai, a shareholder of Anhui Ansheng, which gives the Company additional 20.58% of the outstanding

equity interests of Anhui Ansheng.

As a result of the completion of the transaction, the Company owns 86.58% of Anhui Ansheng through

Jiayi Technologies, making Anhui Ansheng operate in accordance with the will of the Company.

The Company is considered the primary beneficiary

of Anhui Ansheng and it consolidates its accounts as VIEs.

Each of the VIE Agreements is described in detail below:

and Service Agreement .

Pursuant to the Consultation and Service Agreement, WFOE has the exclusive right to provide consultation

and services to the operating entities in China in the area of 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 amount of service fees and payment term can be amended by the WFOE and operating companies’

and the implementation.

The term 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.

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 technical 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.

rate of service fees may be adjusted based on the services rendered by WFOE in that month and the operational needs of the operating

The Business Cooperation Agreement shall maintain effective unless it was terminated or was compelled to terminate under

applicable PRC laws and regulations.

WFOE may terminate this Business Cooperation Agreement at any time by giving 30 day’s

prior written notice.

Pledge Agreements .

Pursuant to the Equity Pledge Agreements among WFOE, operating entities and each of operating entities’

shareholder, shareholders of the operating entities pledge all of their equity interests in the operating entities to WFOE to

guarantee their performance of relevant obligations and indebtedness under the Technical Consultation and Service Agreement and

other control agreements.

In addition, shareholders of the operating entities are in the process of registering the equity pledge

with the competent local authority.

Option Agreements .

Pursuant 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 purchase, 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

entities shareholder has been legally transferred to WFOE or its designee(s).

Rights Proxy Agreements .

Pursuant 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 with respect to

all matters to be discussed and voted in the shareholders’

The term of each Voting Rights Proxy Agreement is 20

Consultation and Service Agreement .

Pursuant to the Consultation

and Service Agreement, WFOE has the exclusive right to provide consultation and services to the operating entities in China in the area

of 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 amount of service fees and payment term can be amended

by the WFOE and operating companies’ consultation and the implementation.

The term of the Consultation and Service Agreement is

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 technical 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 terminate 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 .

Pursuant to the Equity Pledge Agreements

among WFOE, operating entities and each of operating entities’ shareholder, shareholders of the operating entities pledge all of

their equity interests in the operating entities to WFOE to guarantee their performance of relevant obligations and indebtedness under

the Technical Consultation and Service Agreement and other control 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 .

Pursuant 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 purchase, 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 entities shareholder has been legally transferred to WFOE or its designee(s).

Voting Rights Proxy Agreements .

Pursuant 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 with respect to all matters to be discussed and voted in the shareholders’ meeting.

of each Voting Rights Proxy Agreement is 20 years.

WOFE has the right to extend each Voting Proxy Agreement by giving written notification.

As of December 31, 2020, the following entities

were de-consolidated from the structure as a result of the termination agreements:

Beijing Lorain, Luotian Lorain, Shandong Greenpia,

Shenzhen Lorain and Taishan Muren.

Shanghai Xunyang was sold to one unrelated party in the company reorganization process.

grow, produce and distribute Cyan brick tea, black tea and green tea in China.

In addition, we also research, develop, manufacture

and sell products of formaldehyde, urea formaldehyde adhesive, methylal, ethanol fuel, fuel additives and clean fuel.

ethanol fuel and fuel additives products business is carried on by our newly acquired VIE company, Jingshan Sanhe Luckysky.

formaldehyde, urea formaldehyde adhesive, methylal, and clean fuel products business is carried out by our newly acquired VIE

company, Jilin Chuangyuan.

We provide a demand-side platform which allows

buyers of digital advertising inventory to manage multiple advertisement exchange and data exchange through one interface.

digital service is provided by our newly acquired company, Fast Approach.

Manufacturing Facilities

currently manufacture our products in Meihekou City, Jilin Province, Jingshan City and Xianning City, Hubei Province, China.

following table indicates the year that operations commenced at each of the facilities and the size of the facilities.

(square meters)

Sanhe Luckysky **

Chuangyuan***

Became a VIE in

a VIE in January 2021

a VIE in March 2021.

currently manufacture our different products using production lines operated through our subsidiaries.

production process for our cyan brick tea products involves, primary processing of fresh leaves, piling and fermenting, storing

and aging, picking, pressing, and baking.

The production process for our black tea products involves selecting and sorting the

fresh leaves, withering, rolling, fermenting, baking and drying, grading according to color, prompting fragrance, packing and

The production process for our green tea products involves selecting and sorting the fresh leaves, airing, fixating,

cooling, rolling, stir drying, selecting and grading, prompting fragrance, packing and warehousing.

production process for our formaldehyde products is illustrated as follows.

The raw material methanol, after being injected into

the high position tank, enters the methanol evaporator through the filter, mixes with the air from the roots blower to form the

binary mixture, and then adds steam to form the ternary mixture, which is heated by the superheater to 120 ℃ and enters

the oxidizer, carries out oxidation and dehydrogenation reaction through the silver catalyst to form the formaldehyde gas, and

then absorbs the formaldehyde solution through the first absorption tower and the second absorption tower.

The excess waste gas

is burned out by the exhaust gas boiler.

production process for our methyl starting with the raw materials methanol and formaldehyde are pumped into the reaction distillation

tower according to the proportion.

At the bottom of the tower, formaldehyde and methanol are indirectly heated by steam.

liquid vapor from the tower upwards through the catalyst reaction to produce methyl acetal, and then through the distillation

tower separation, cooling, the final product methyl acetal.

production process for our urea-formaldehyde glue is demonstrated as follows.

Formaldehyde is pumped from the formaldehyde workshop

into the tank of formaldehyde storage, and then pumped into the metering tank through the feed pump of formaldehyde.

PH value is adjusted by adding alkali, it is sent into the reaction kettle.

At the same time, urea is also added into the kettle

according to the corresponding proportion, heating the reaction kettle.

After heating up the kettle, melamine is added, so that

the material can undergo addition reaction in the kettle.

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.

production process for our clean fuel oil is illustrated as follows.

The self-control design of the facilities for storage of

raw materials and addition of additives shall, in accordance with the requirements of the process, conduct centralized indication

and adjustment of the temperature, flow rate and liquid level of the raw oil tanks, raw oil metering tanks, product oil allocation

tanks and finished oil tanks during the fuel blending process;

realize remote monitoring of the whole fuel production process,

and conduct on-the-spot indication of pressure and partial flow rate.

production process for our construction rubber powder (re-dispersible latex powder) is demonstrated as follows.

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.

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:

We grow, produce and distribute Cyan brick tea, black tea and green

tea in China through our wholly owned subsidiary Xianning Bozhuang.

We import and distribute beef products in China through our wholly

owned subsidiary Shandong Yunchu.

We research, develop, manufacture and sell products of formaldehyde,

urea formaldehyde adhesive, methylal, ethanol fuel, fuel additives and clean fuel through our subsidiary Jingshan Sanhe Luckysky and

we research, develop, manufacture and sell formaldehyde, urea formaldehyde adhesive, methylal, and clean fuel products through our VIE,

Jilin Chuangyuan.

We research, develop and manufacture skid-mounted

refueling equipment, LNG cryogenic equipment and oil storage tank, and sells such products in China through our VIE, Anhui Ansheng.

We provide a demand-side platform which allows buyers of digital advertising

inventory to manage multiple ad exchange and data exchange through one interface.

Our digital service is provided by Fast Approach.

Our Manufacturing Facilities

We currently manufacture our products and provide services in Meihekou

City ofJilin Province, Jingshan City and Xianning City of Hubei Province, Qingdao City of Shandong Province, Xuancheng City of Anhui Province,

and Shanghai in China, and Toronto in Canada.

The following table indicates the year that operations commenced at

each of the facilities and the size of the facilities.

Facility Size

Xianning Bozhuang *

Jingshan Sanhe Luckysky **

There are two production

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***

Anhui Ansheng****

a VIE in May 2019.

** Became a subsidiary September 2021.

*** Became a VIE in March 2021.

**** Became a VIE in July, 2021

Production Lines

We currently manufacture our products using production lines.

The production process for our cyan brick tea products involves, primary

processing of fresh leaves, piling and fermenting, storing and aging, picking, pressing, and baking.

The production process for our black

tea products involves selecting and sorting the fresh leaves, withering, rolling, fermenting, baking and drying, grading according to

color, prompting fragrance, packing and warehousing.

The production process for our green tea products involves selecting and sorting

the fresh leaves, airing, fixating, cooling, rolling, stir drying, selecting and grading, prompting fragrance, packing and warehousing.

The production process for our formaldehyde products is illustrated

The raw material methanol, after being injected into the high position tank, enters the methanol evaporator through the filter,

mixes with the air from the roots blower to form the binary mixture, and then adds steam to form the ternary mixture, which is heated

by the superheater to 120 ℃ and enters the oxidizer, carries out oxidation and dehydrogenation reaction through the silver catalyst

to form the formaldehyde gas, and then absorbs the formaldehyde solution through the first absorption tower and the second absorption

The excess waste gas is burned out by the exhaust gas boiler.

The production process for our methyl starting with the raw materials

methanol and formaldehyde are pumped into the reaction distillation tower according to the proportion.

At the bottom of the tower, formaldehyde

and methanol are indirectly heated by steam.

The reaction liquid vapor from the tower upwards through the catalyst reaction to produce

methyl acetal, and then through the distillation tower separation, cooling, the final product methyl acetal.

The production process for our urea-formaldehyde

glue is demonstrated as follows.

Formaldehyde is pumped from the formaldehyde workshop into the tank of formaldehyde storage, and then

pumped into the metering tank through the feed pump of formaldehyde.

After the PH value is adjusted by adding alkali, it is sent into

the reaction kettle.

At the same time, urea is also added into the kettle according to the corresponding proportion, heating the reaction

After heating up the kettle, melamine is added, so that the material can undergo addition reaction in the kettle.

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.

The production process for our clean fuel oil

is illustrated as follows.

The self-control design of the facilities for storage of raw materials and addition of additives shall, in

accordance with the requirements of the process, conduct centralized indication and adjustment of the temperature, flow rate and liquid

level of the raw oil tanks, raw oil metering tanks, product oil allocation tanks and finished oil tanks during the fuel blending process;

realize remote monitoring of the whole fuel production process, and conduct on-the-spot indication of pressure and partial flow rate.

The production process for our construction rubber

powder (re-dispersible latex powder) is demonstrated as follows.

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.

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:

Production Lines

Xianning Bozhuang

There are six production

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 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

Cyan brick tea, black tea and green tea

Production line with 5,020 tons of production capacity

Jingshan Sanhe Luckysky

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

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

operate our production lines year-round.

Supply Sources

business depends on obtaining a reliable supply of various products, including tea, refined methanol, methanol, formaldehyde and

polymer emulsion.

Because of the diversity of available sources of these raw materials, we believe that our raw materials are

currently in adequate supply.

our tea operation, we obtain our raw materials primarily from domestic procurement.

We purchase approximately 400 tons of tea

from suppliers in 2020.

For our business lines of ethanol fuel and fuel additive, we purchased approximately 710 tons of additive

material from suppliers in 2020.

For our business lines of formaldehyde, rubber and methylal products, we purchased approximately

18,547 tons of methanol and 146 tons of urea from suppliers in 2020.

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.

Our suppliers generally include wholesale agricultural product companies, food production companies,

tea bag processing companies and chemical products wholesale companies.

tea and chemical products are sold exclusively in Chinese domestic markets.

sell our tea products to third-party distributors, such as trading companies with established distribution channels.

of a typical sales contract between us and our distributors provide that we are responsible for transportation costs and the distributors

are responsible for storage costs.

Furthermore, the distributors have the right to return products that fail to satisfy specified

quality standards, at our cost.

The majority of such contracts require the distributors to pay us in cash in full upon delivery,

and the remaining contracts provide for short-term credit, usually two to three weeks.

to our formaldehyde products, vehicles gasoline and diesel products, we are a leading

regional chemical products provider in north eastern China area, and we are the sole

provider of formaldehyde in Jilin Province, China.

We sell such products to end user

directly and through local distributors.

it comes to the sales of synthetic fuel products, we do business through direct sales, constructing refuel facilities and conducting

technical cooperation with other companies.

our DSP business line, we obtain clients through advertising agents from China and Canada.

Sales and Marketing Efforts

have not spent a significant amount of capital on advertising in the past, and our advertising budget continues to be limited.

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

Anhui Ansheng

Cryogenic Liquid Storage Tank, Microbulk Solutions for IG –Pama, Medical oxygen integrated air supply station, Microbulk Solutions for LNG -Pama, Integrated LNG Supply Staion-AYS, Vaporizer for industrial gases and LNGL-CNG filling station, Container LNG filling station, Gas supply station design and installation

Provided more than 1,000 sets of IG and LNG equipment’s and installation services for customers

We operate our production lines year-round.

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.

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.

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 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 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.

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 and overseas

We sell our agricultural products in first-tier cities in China, including

Beijing, Shanghai, Tianjin and Guangzhou.

Our sales team sells our products directly to supermarket chains, mass merchandisers, large

wholesalers, restaurants and others in these markets.

In second-tier and third-tier cities, we currently sell our products to third-party

distributors, such as food companies or trading companies with established distribution channels in such regions, rather than through

our own sales team.

The terms of a typical sales contract between us and our distributors provide that we are responsible for transportation

costs and the distributors are responsible for storage costs.

Furthermore, the distributors have the right to return products that fail

to satisfy specified quality standards, at our cost.

The majority of such contracts require the distributors to pay us in cash in full

upon delivery, and the remaining contracts provide for short-term credit, usually two to three weeks.

We also operate an online store

on Tmall, an open business-to-consumer (B2C) platform in China, to sell tea products to consumers directly.

As to our formaldehyde products, vehicles gasoline and diesel products,

we are a leading regional chemical products provider in north eastern China area, and we are the sole provider of formaldehyde in Jilin

Province, China.

When it comes to manufacturing and sales of synthetic

fuel products, we do business through direct sales, constructing refuel facilities and conducting technical cooperation with other companies.

Anhui Ansheng’s Insulation type explosion-proof

skid-mounted refueling equipment and SF double-layer buried type storage tank are the leading brands in the industry.

The company is

China National Petroleum Corporation’s Top 5 supplier for SF double layer buried storage tanks.

The production scale and market

share of the Explosion-proof skid-mounted refueling equipment are both ranking No.1 in China and such product is a success in overseas

markets as well.

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.

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 2021, our marketing and branding efforts mainly focus on internet advertising

and Market Position

overall food market is diverse, both globally and in China.

We do not have a significant market share in China.

tea is produced in Guangxi, Sichuan, Yunnan, Hunan, Hubei, Shanxi and Anhui provinces in China.

Our black tea products are processed

in our factory in Hubei province and distributed nationwide.

There are few large players on the market but we face fierce competition

from numerous small black tea manufactures and distributors.

However, as our brand has over hundreds of year’s history,

we have accumulated loyal consumers and gained favorable market reputation over years.

factors in our industry include product innovation, product quality, price, brand recognition and loyalty, product variety and

ingredients, product packaging and package design, effectiveness of marketing and promotional activity, and our ability to identify

and satisfy consumer tastes and preferences.

its inception, the company has developed rapidly relying on advanced enterprise management and safe, effective, exclusive patented

products and strong marketing strength.

The production scale of formaldehyde is ranking top three among provinces in northeast

The production scale of urea-formaldehyde glue attains the first place in China.

Our enterprise comprehensive strength

is considered first tier among all companies in northeast China.

We sell clean fuel and fuel additive in local reginal market.

with other reginal players and national players.

company vigorously implements scientific and technological innovation and obtains 12 practical patent certificates from the State

Intellectual Property Office of the PRC.

These patents are registered under Jingshan Sanhe Luckysky, which includes a diesel exhaust

cleaner and its preparation method, a kind of automobile exhaust cleaner and preparation method, a kind of filtering device for

exhaust port of cleaning liquid production plant, a kind of automobile cleaner dispensing device, a kind of liquid dispensing

equipment, a kind of mixing and stirring tank, a kind of cleaning brush for cleaning agent storage tank, a kind of reactor for

producing auto cleaner, a kind of cleaning brush for cleaning agent mixing kettle, a kind of mixing tank, a cleaning tool for

cleaning the reactor for detergent production and a kind of mixing and defoaming tank.

The company will give full play to the

advantages of independent intellectual property rights, continue to innovate, maintain the leading technology and enhance the

core competitiveness of the company.

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.

of December 31, 2020, we had a total of 148 employees.

Approximately 148 of our full-time employees are directly employed by our

subsidiaries and VIEs.

Compared to 2019, the total employees decreased by 36% due to disposal of Taishan Muren, Shanzhen Lorain

and acquisition of Fast Approach.

following table sets forth the allocation of employees by job function.

and Development

and long-term customers.

Competition and Market Position

Black tea is produced in Guangxi, Sichuan, Yunnan, Hunan, Hubei, Shanxi

and Anhui provinces in China.

Our black tea products are processed in our factory in Hubei province and distributed nationwide.

are few large players on the market but we face fierce competition from numerous small black tea manufactures and distributors.

as our brand has over hundreds of year’s history, we have accumulated loyal consumers and gained favorable market reputation over

Competitive factors in our industry include product innovation, product

quality, price, brand recognition and loyalty, product variety and ingredients, product packaging and package design, effectiveness of

marketing and promotional activity, and our ability to identify and satisfy consumer tastes and preferences.

Since its inception, the company has developed rapidly relying on

advanced enterprise management and safe, effective, exclusive patented products and strong marketing strength.

The production scale of

formaldehyde is ranking top three among provinces in northeast China.

The production scale of urea-formaldehyde glue attains the first

place in China.

Our enterprise comprehensive strength is considered first tier among all companies in northeast China.

Jingshan Sanhe Luckysky is one of the top ten private enterprises

in the region of Jingshan with 12 patents, 17 sets of professional laboratory equipment and 2 advanced and complete production lines.

Anhui Ansheng was established in May 2012, with a registered capital

of RMB 30 million and an area of approximately 100,000 square meters.

It is equipped with advanced manufacturing and testing equipments,

and has first-class R&D, manufacturing and management team in the industry.

Anhui Ansheng has three business divisions:

type explosion-proof skid-mounted refueling equipment business division, LNG cryogenic equipment business division and SF double deck

oil storage tank business division.

Anhui Ansheng has the national pressure vessel manufacturing certificate, pressure pipeline installation

license, ASME U certificate and T certificate, national industrial production license, ISO9001 quality management system certificate,

ISO14001 environmental management system certificate, QHSAS18001 occupational health and safety management system certificate, as well

as UL certificate, etc.

It’s Insulation type explosion-proof skid-mounted refueling equipment and SF double-layer buried type storage

tank are the leading brands in the industry.

Anhui Ansheng is China National Petroleum Corporation’s Top 5 supplier for SF double

layer buried storage tanks.

The production scale and market share of the Explosion-proof skid-mounted refueling equipment are both ranking

No.1 in China and such product is a success in overseas markets as well.

Jilin Chuangyuan is a leading chemical enterprise integrating R &

D, production and sales.

It was attacted and invited by Meihekou city government and completed the reconstruction and extention.

main products and annual production capacity are 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 respectively.

It is a large-scale enterprise in the production of formaldehyde and urea formaldehyde

glue in Chinese northeast provinces and is the only enterprise in Jilin province to produce and sell formaldehyde.

The main products

are sold to wood-based panel, chemical, pharmaceutical and construction enterprises in Jilin and Liaoning provinces.

Shandong Yunchu mainly purchased frozen beef from six countries:

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 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 various beef products with high quality and low price

to meet the needs of domestic customers.

Intellectual Property

The company vigorously implements scientific and technological innovation.

Jingshan Sanhe Luckysky obtains 12 practical patent certificates from the State Intellectual Property Office of the PRC, which includes

a diesel exhaust cleaner and its preparation method, a kind of automobile exhaust cleaner and preparation method, a kind of filtering

device for exhaust port of cleaning liquid production plant, a kind of automobile cleaner dispensing device, a kind of liquid dispensing

equipment, a kind of mixing and stirring tank, a kind of cleaning brush for cleaning agent storage tank, a kind of reactor for producing

auto cleaner, a kind of cleaning brush for cleaning agent mixing kettle, a kind of mixing tank, a cleaning tool for cleaning the reactor

for detergent production and a kind of mixing and defoaming tank.

The company will give full play to the advantages of independent intellectual

property rights, continue to innovate, maintain the leading technology and enhance the core competitiveness of the company.

Anhui Ansheng obtains 1 invention patent and 23 utility patent from

the State Intellectual Property Office of the PRC, which includes a LNG tank container with self-balancing lifting mechanism, a LNG tank

type container type with intermediate moving positioning mechanism, a LNG tank container with new vehicle mounted support frame, a LNG

tank type container type with integrated fixed frame, Self-drying gas station canopy, fuel dispenser, a constant temperature and pressure

unloading device for gasification station, integrated mobile LNG gasification station, an integrated skid type LNG filling station, fuel

dispenser with automatic coordination position, a LNG tank type container type with self-balancing lifting mechanism, an anti-breaking

mechanism at the inlet and a outlet of pump pool in LNG integrated gas filling device.

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.

Our Employees

As of December 31, 2021, we had a total of 185 employees.

Approximately

185 of our full-time employees are directly employed by our subsidiaries and VIEs.

The following table sets forth the allocation of employees, both direct

and leased, by job function.

Research and Development

Quality Control

Administration

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.

compensate our production line employees by unit produced (piece work) and compensate other employees with a base salary and bonus

based on performance.

We also provide training for our staffs from time to time to enhance their technical and product knowledge,

including knowledge of industry quality standards.

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.

Research and Development Activities

have research and development staffs at each of our facilities.

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 compensate our production line employees by unit produced (piece

work) and compensate other employees with a base salary and bonus based on performance.

We also provide training for our staffs from

time to time to enhance their technical and product knowledge, including knowledge of industry quality standards.

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.

for different business lines.

Sanhe Luckysky contains a professional laboratory which includes 17 sets of professional experimental equipment operated by 6

high-end scientific research experts to ensure the high quality of raw materials and products.

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.

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.

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

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.

amount we spent on research and development activities during the years ended December 31, 2020 and 2019 was not a material portion

of our total expenses for those years.

a company that continuously strives to create new value.

We have been doing business in three areas:

tea product cultivation,

packaging, and sales;

manufacturing and sales of synthetic fuel products, formaldehyde products, vehicles gasoline and diesel

products in Chinese market and providing on-line advertising services in Canada and China.

tea product cultivation, packaging, and sales business is subject to regulations of China’s Agricultural Ministry and Ministry

This regulatory scheme governs the manufacture (including composition and ingredients), labeling, packaging and safety

It also regulates manufacturing practices, including quality assurance programs, for foods through its current manufacturing

practice regulations, and specifies the standards of identity for certain foods.

We have obtained approvals from Chinese authorities

for products that requires the approval under regulations, including quality safety approval from government.

manufacturing and sales of chemical products business is subject to multiple regulations under PRC law.

We have complete certificates,

including the work safety license, production license and emission license.

We have passed the environmental assessment acceptance

and currently works on the promotion to the second level of work safety standardization from the third level.

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.

online advertising business line is operated in Canada and we meet the requirement of related regulations in Canada.

required for smaller reporting companies.

Jingshan Sanhe Luckysky contains a professional laboratory which includes

17 sets of professional experimental equipment operated by 6 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

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.

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

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.

The amount we spent on research and development activities during

the years ended December 31, 2021 and 2020 was not a material portion of our total expenses for those years.

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.

Our tea product cultivation, packaging, and sales business is subject

to regulations of China’s Agricultural Ministry and Ministry of Health.

This regulatory scheme governs the manufacture (including

composition and ingredients), labeling, packaging and safety of food.

It also regulates manufacturing practices, including quality assurance

programs, for foods through its current manufacturing practice regulations, and specifies the standards of identity for certain foods.

We have obtained approvals from Chinese authorities for products that requires the approval under regulations, including quality safety

approval from government.

Our manufacturing and sales of chemical products business is subject

to multiple regulations under PRC law.

We have complete certificates, including the work safety license, production license and emission

We have passed the environmental assessment acceptance and currently works on the promotion to the second level of work safety

standardization from the third level.

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 manufacturing of insulation type explosion-proof skid-mounted

refueling equipment and SF double-layer buried type storage tank products business, carried out by Anhui Ansheng, is subject to multiple

regulations under PRC law.

We have obtained required certificates, including the national industrial product production license, Manufacture

License of Special Equipment (pressure vessels), installation, alteration, repair & maintenance license of special equipment (pressure

tunnel), the American Society of Mechanical Engineers certificate of authorization, environmental management system certification and

quality management system certification.

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.

As to our multimedia design and advertising business, we are licensed

to operate data related business in China through our subsidiary, Shanghai Shuning.

Not required for smaller reporting companies.

UNRESOLVED STAFF COMMENTS

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What changed 10-K

Item 1. Business