Planet Green Holdings Corp. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2022. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2022, our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting described below. Internal Controls over Financial Reporting Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management concluded that, as of December 31, 2022, our internal controls over financial reporting were not effective. The material weakness and significant deficiency identified by our management as of December 31, 2022, relates to the ability of the Company to record transactions and provide disclosures in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). We did not have sufficient and skilled accounting personnel with an appropriate level of experience in the application of U.S. GAAP commensurate with our financial reporting requirements. For example, our staff members do not hold licenses such as Certified Public Accountant or Certified Management Accountant in the U.S., have not attended U.S. institutions for training as accountants, and have not attended extended educational programs that would provide sufficient relevant education relating to U.S. GAAP. Our staff will require substantial training to meet the demands of a U.S. public company and our staff’s understanding of the requirements of U.S. GAAP-based reporting are inadequate. Remediation Initiative We plan to provide U.S. GAAP training sessions to our accounting team. The training sessions will be organized to help our corporate accounting team gain experience in U.S. GAAP reporting and to enhance their awareness of new and emerging pronouncements with potential impact on our financial reporting. We plan to continue to recruit experienced and professional accounting and financial personnel and participate in educational seminars, tutorials, and conferences and employ more qualified accounting staff in the future. 23 Changes in Internal Controls over Financial Reporting Other than as described above, during the fiscal year ended December 31, 2022, there were no material changes in our internal control over financial reporting identified in connection with the evaluation performed during the fiscal year covered by this annual report that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations over Internal Controls. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes under U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements under U.S. GAAP, and that our receipts and expenditures are being made only under authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could affect the financial statements. Management, including our Chief Executive Officer and Chief Financial Officer, does not expect our internal controls to prevent or detect all misstatements. No matter how well designed and operated, a control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of such controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of misstatements, if any, have been detected or prevented. Also, projections of any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. ITEM 9B. OTHER INFORMATION. None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not Applicable. 24 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors and Officers The following table sets forth the name, age and position of each of our current directors and officers. Name Age Position Bin Zhou 33 Chairman and Chief Executive Officer Lili Hu 45 Chief Financial Officer Luojie Pu 35 Director King Fai Leung 50 Director Yang Cao 30 Director Mr. Bin Zhou has served as a director of the Company since May 2019 and served as our Chief Executive Officer and Chairman since October 2020. He has served as chairman of the board of directors of Xianning Bozhuang since March 2019. Mr. Zhou was the general manager and legal representative of Hubei Qianding Equipment Manufacturing Co., Ltd., a mechanical equipment manufacturing company, from March 2016 to March 2019. He also served as supervisor of Hubei Henghao Real Estate Development Co., Ltd., a real estate development company, from April 2014 to June 2018. Mr. Zhou received his Bachelor of Law degree from National Judges College in Beijing, China. Ms. Lili Hu has served as the Chief Financial Officer of the Company since June 2019. She has over ten years of accounting experiences. Ms. Hu has served as the financial director of Xianning Bozhuang Tea Products Co., Ltd., a wholly-owned subsidiary of the Company, since July 2018. From June 2016 to June 2018, Ms. Hu worked as an audit project manager with Hubei Puhua Lixin LLP, an audit firm in Hubei, China. From May 2014 to May 2016, Ms. Hu was a financial manager of Houfu Medical Device Co., Ltd., a medical device company in China. From January 2009 to December 2013, Ms. Hu served as the financial director of Hebei Rentian Gaopeng Mechanical Co., Ltd., a manufacturing company in China. From January 2006 to June 2008, Ms. Hu was the Chief Financial Officer of Hubei Hongfa Telecommunications Co., Ltd., a telecommunications company in China. Ms. Hu graduated from Hubei University of Science and Technology with a major in accounting. Ms. Hu is a Certified Public Accountant in China. Ms. Luojie Pu has served as a director of the Company since August 2022. Ms. Pu has served as the vice general manager of Jinan Hehui financial software service Co., Ltd. since April 2018. From October 2013 to March 2018, Ms. Pu served as an associate marketing director for Jinan Hengxin Weiye Telecommunication Equipment Co., Ltd. Ms. Pu received her bachelor’s degree in finance from Shandong University in July 2013. We believe Ms. Pu is well qualified to serve on the Board because of her extensive finance and management experience. 25 Mr. King Fai Leung has served as a director of the Company since July 2019. He has over 20 years’ experience in finance and accounting. He has been the executive director of Maxima Energy Limited, an energy company in Hong Kong, since December 2018. Mr. Leung has also served as an independent director since November 2017 and was re-designated in March 2019 as an executive director and Chief Financial Officer of Chineseinvestors.com, Inc., a financial information website for Chinese-speaking investors (OTCQB: CIIX). He has also served as an independent director, chairman of the audit committee and a member of the remuneration and nomination committee of Daisho Microline Holdings Ltd., a Hong Kong-based investment holding company principally engaged in the manufacture and sales of printed circuit boards (HKG: 0567), since June 2015. In addition, Mr. Leung served as directors in various public companies, including Kirin Group Holdings Limited, an investment holding company principally engaged in the financial related business (HKG: 8109), Biostar Pharmaceuticals, Inc., a pharmaceutical and medical nutrient products company (OTC Pink: BSPM), and Hao Wen Holdings Limited, an investment holding company principally engaged in the manufacture and trading of biomass fuel in China (HKG: 8019). Mr. Leung earned his Bachelor of Commerce in Accounting and Finance from Deakin University in Victoria, Australia. He is a Certified Public Account in both Hong Kong and Australia. Ms. Yang Cao has served as a director of the Company since March 2020. She has been practicing commercial law as an attorney with Hubei Zhonghe Law Office. Prior to that, she served as a legal counsel to Xianning High-Tech Industrial Zone, a municipal government authority providing infrastructure and resources to high-tech companies, from November 2016 to November 2019. From October 2015 to November 2016, Ms. Cao worked as a compliance officer at Qingdao Inter-Credit Group Wuhan Branch, a business consulting company. Ms. Cao received her LL.B. degree from Hankou College and an LL.M. degree from Central China Normal University There are no arrangements or understandings between any of our directors, officers and any other person pursuant to which any director was selected to serve as a director or officers of our company. Directors are elected until their successors are duly elected and qualified. Our executive officers are appointed by our Board and serve at their discretion. There are no family relationships among our directors or officers. Board of Directors Our Board met on twelve occasions during fiscal year 2022. Each of the members of our Board attended more than 75% of the total number of meetings held by our Board and the committees on which each director served during fiscal year 2022. Committees of the Board Audit Committee The Audit Committee assists our Board in monitoring: - our accounting, auditing, and financial reporting processes; - the integrity of our financial statements; - internal controls and procedures designed to promote our compliance with accounting standards and applicable laws and regulations; and - the appointment and evaluation of the qualifications and independence of our independent auditors. King Fai Leung, Yang Cao and Luojie Pu, all of whom are independent directors under SEC rules and the rules of NYSE American, are currently serving as members of the Audit Committee. Mr. Leung is the chairman of the Audit Committee and is our audit committee financial expert. The Audit Committee has adopted a written charter, a copy of which is available on our website at www.planetgreenholdings.com, and a printed copy of which is available to any stockholder requesting a copy by writing to: Planet Green Holdings Corp., c/o Board of Director Office, 130-30 31 st Ave, Suite 512, Flushing, NY, 11354. During the fiscal year ended December 31, 2022, our Audit Committee held four meetings. 26 Compensation Committee The functions of the Compensation Committee are as follows: ● to assist our Board in discharging its responsibilities with respect to compensation of our executive officers and directors; ● to evaluate the performance of our executive officers; ● to assist our Board in developing succession plans for executive officers; and ● to administer our stock and incentive compensation plans and recommend changes in such plans to our Board as needed. The current members of the Compensation Committee are Luojie Pu, King Fai Leung and Yang Cao. Ms. Pu is the chairman of the Compensation Committee. All current members of the Compensation Committee are independent directors, and all past members were independent directors at all times during their service on such Committee. None of the past or present members of our Compensation Committee are present or past employees or officers of the Company or any of our subsidiaries. No member of the Compensation Committee has had any relationship with us requiring disclosure under Item 404 of Regulation S-K. None of our executive officers serves on the Board of Directors or compensation committee of a company that has an executive officer that serves on our Board of Directors or Compensation Committee. The Compensation Committee may not delegate its responsibilities to another committee, individual director or member of management. The Compensation Committee meets on an annual basis and holds special meetings as needed. The Compensation Committee meetings may be called by the Committee chairman, the Chairman of the Board of Directors or a majority of Committee members. The Chief Executive Officer and Chief Financial Officer also provide recommendations to the Compensation Committee relating to compensation of other executive officers. The Compensation Committee held one meeting in fiscal year 2022. Nominating and Corporate Governance The Nominating and Corporate Governance assists the Board of Directors in identifying individuals qualified to become our directors and in determining the composition of the Board of Directors and its committees. The Nominating and Corporate Governance is responsible for, among other things: ● to make recommendations to the Board of Directors with respect to the size and composition of the Board of Directors; ● to make recommendations to the Board of Directors on the minimum qualifications and standards for director nominees and the selection criteria for the Board members; ● to review the qualifications of potential candidates for the Board of Directors; ● to make recommendations to the Board of Directors on nominees to be elected at the annual meeting of stockholders; and ● to seek and identify a qualified director nominee, in the event that a director vacancy occurs, to be recommended to the Board of Directors for either appointment by the Board of Directors to serve the remainder of the term of a director position that is vacant or election at the annual meeting of the stockholders. The current members of the Nominating and Corporate Governance are Yang Cao, Luojie Pu and King Fai Leung. Ms. Cao is the chairman of the Nominating and Corporate Governance Committee. During the fiscal year 2022, our Nominating and Corporate Governance Committee held one meeting. 27 Stockholder Nominations for Director Stockholders may propose candidates for board membership by writing to: Planet Green Holdings Corp., c/o Board of Director Office, 130-30 31 st Ave, Suite 512, Flushing, NY, 11354. Any such proposal shall contain the name, holdings of our securities and contact information of the person making the nomination; the candidate’s name, address and other contact information; any direct or indirect holdings of our securities by the nominee; any information required to be disclosed about directors under applicable securities laws and/or stock exchange requirements; information regarding related party transactions with our company and/or the stockholder submitting the nomination; any actual or potential conflicts of interest; the nominee’s biographical data, current public and private company affiliations, employment history and qualifications and status as “independent” under applicable securities laws and stock exchange requirements. Nominees proposed by stockholders will receive the same consideration as other nominees. Compensation Committee Interlocks and Insider Participation None of our officers currently serves, or in the past year has served, as a member of the Board of Directors or compensation committee of any entity that has one or more officers serving on our Board of Directors. Code of Ethics Our Board adopted a Code of Ethics that applies to all of our directors, executive officers, including our principal executive officer, principal financial officer and principal accounting officer, and employees. The Code of Ethics addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, confidentiality, trading on inside information, and reporting of violations of the code. The Code of Ethics is available on our website at http://www.planetgreenholdings.com, and a copy of the Code of Ethics is available to any stockholder requesting a copy by writing to: Planet Green Holdings Corp., c/o Board of Director Office, 130-30 31 st Ave, Suite 512, Flushing, NY, 11354. We intend to disclose on our website, in accordance with all applicable laws and regulations, amendments to, or waivers from, our Code of Ethics. Legal Proceedings To the Company’s knowledge, there are no material proceedings to which any of our directors and officers or affiliates of the Company is a party adverse to the Company or has a material interest adverse to the Company. ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth information concerning all forms of compensation earned by our named executive officers during the fiscal years ended December 31, 2021 and 2022 for services provided to us and our subsidiaries and VIEs. None of our current executive officers earned compensation that exceeded $100,000 during the fiscal years ended December 31, 2021 or 2022. Name and Stock Option All Other Principal Position Year Salary Bonus Awards Awards Compensation Total (a) (b) (c) (d) (e) (f) (g) (h) Bin Zhou, 2022 $ 96,000 $ - $ - $ - $ - $ 96,000 Chairman, Chief Executive Officer and Director 2021 $ 96,000 $ - $ - $ - $ - $ 96,000 - - - - Lili Hu, 2022 $ 84,000 $ - $ - $ - $ - $ 84,000 Chief Financial Officer Director 2021 $ 84,000 $ - $ - $ - $ - $ 84,000 - - - - Luojie Pu, 2022 $ 8,000 $ - $ - $ - $ - $ 8,000 Director 2021 $ - $ - $ - $ - $ - $ - King Fai Leung, 2022 $ 21,600 $ - $ - $ - $ - $ 21,600 Director 2021 $ 21,600 $ - $ - $ - $ - $ 21,600 Yang Cao, 2022 $ 24,000 $ - $ - $ - $ - $ 24,000 Director 2021 $ 24,000 $ - $ - $ - $ - $ 24,000 28 In October 2020, the Board appointed Bin Zhou as a member of the Board and the Chief Executive Officer. Pursuant to the employment agreement with Mr. Zhou dated October 25, 2022, we are obligated to pay Mr. Zhou a compensation of $96,000 per year. In June 2020, the Board appointed Lili Hu to serve as the Chief Financial Officer. Pursuant to the employment agreement dated June 24, 2022 with Ms. Hu, we are obligated to pay Ms. Hu a compensation of $84,000 per year. In August 2022, the Board appointed Luojie Pu to serve as the Director. Pursuant to the employment agreement with Ms. Pu, we are obligated to pay Ms. Pu a compensation of $24,000 per year. In July 2019, the Board appointed King Fai Leung to serve as the Director. Pursuant to the employment agreement with Mr. Leung, we are obligated to pay Mr. Leung a compensation of $21,600 per year. In March 2020 the Board appointed Yang Cao to serve as the Director. Pursuant to the employment agreement with Ms. Cao, we are obligated to pay Ms. Cao a compensation of $24,000 per year. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The following table sets forth information regarding beneficial ownership of our common stock as of March 31, 2023 (i) by each person who is known by us to beneficially own more than 5% of our common stock; (ii) by each of our named executive officers and directors and (iii) by all of our officers and directors as a group. Beneficial ownership is determined in accordance with the rules of the SEC that deem shares to be beneficially owned by any person who has voting or investment power with respect to such shares. Except as otherwise indicated, the persons listed below have advised us that they have direct sole voting and investment power with respect to the shares listed as owned by them. Unless otherwise specified, the address of each of the persons set forth below is c/o Planet Green Holdings Corp., 130-30 31 st Ave, Suite 512, Flushing, NY 11354. In the table below, percentage ownership is based on 72,081,930 shares of our common stock outstanding as of March 10, 2023. Name and title of beneficial owner Amount and nature of beneficial ownership Percent of class 5% or Greater Stockholders Hubei Yunhong Trading Co., Ltd. 5,000,000 6.93 % Hideharu Kaneko 4,000,000 5.54 % Xiangtian (Shenzhen) Aerodynamic Electricity Ltd. 12,000,000 16.64 % Executive Officers, Directors and Director Nominees Bin Zhou, Chairman, Chief Executive Officer and Director 14,942,000 20.72 % Lili Hu, Chief Financial Officer - - Luojie Pu, Director - - King Fai Leung, Director - - Yang Cao, Director - - All executive officers, directors and director nominees as a group (seven individuals) 14,942,000 20.72 % 29 Changes in Control There are currently no arrangements which would result in a change in control of us. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE . Related Party Transactions None. Policy for Approval of Related Party Transactions Our Audit Committee Charter provides that all related party transactions required to be disclosed under SEC rules are to be reviewed by the Audit Committee. Director Independence NYSE American listing standards require that a majority of our Board of Directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our Board of Directors has determined that Luojie Pu, King Fai Leung, Yang Cao are “independent directors” as defined in the NYSE American listing standards and applicable SEC rules. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. WWC, P.C. is the Company’s independent registered public accounting firm for the fiscal years ended December 31, 2021 and the accounting fees such period were $665,000 Such fees related to audit services provided by WWC, P.C., No audit-related or tax services were provided by WWC, P.C. during such periods. YCM CPA Inc. is the Company’s independent registered public accounting firm for the fiscal years ended December 31, 2022 and the accounting fees such period were $100,000. Such fees related to audit services provided by YCM CPA Inc., No audit-related or tax services were provided by YCM CPA Inc. during such periods.. 30 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) (1 and 2) Financial Statement and Schedules The financial statements contained in the “Audited Financial Statements” beginning on page F-1 of this annual report on Form 10-K. (b) Exhibits Exhibit No. Description 3.1 Articles of Incorporation of the registrant, as filed with the Nevada Secretary of State on June 15, 2009. Incorporated by reference to Exhibit 3.1 to the registrant’s registration statement on Form S-3 filed on January 29, 2010. 3.2 Certificate of Amendment of the registrant, as filed with the Nevada Secretary of State on September 28, 2018. Incorporated by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K filed on October 2, 2018. 3.3 Bylaws of the registrant. Incorporated by reference to Exhibit 3.2 to the registrant’s registration statement on Form S-3 filed on January 29, 2010. 4.1* Description of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. 10.1 Securities Purchase Agreement, dated as of January 13, 2022, by and among Planet Green Holdings Corp. and investors named therein. Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on January 14, 2022. 10.2 Share Purchase Agreement, dated February 11, 2022, by and among Planet Green Holdings Corp., Jiayi Technologies (Xianning) Co., Ltd. and Xiaodong Cai. Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on February 14, 2022. 10.3 Amended Consultation and Service Agreement dated as of February 11, 2022. Incorporated by reference to Exhibit 10.2 to registrant’s current report on Form 8-K on February 14, 2022. 10.4 Amended Business Cooperation Agreement dated as of February 11, 2022. Incorporated by reference to Exhibit 10.3 to registrant’s current report on Form 8-K on February 14, 2022. 10.5 Amended Equity Pledge Agreement dated as of February 11, 2022. Incorporated by reference to Exhibit 10.4 to registrant’s current report on Form 8-K on February 14, 2022. 10.6 Amended Equity Option Agreement dated as of February 11, 2022. Incorporated by reference to Exhibit 10.5 to registrant’s current report on Form 8-K on February 14, 2022. 10.7 Amended Voting Right Proxy and Financial Supporting Agreement dated as of February 11, 2022. Incorporated by reference to Exhibit 10.6 to registrant’s current report on Form 8-K on February 14, 2022. 10.8 Share Exchange Agreement dated as of April 8, 2022, by and among Planet Green Holdings Corp., Allinyson Ltd., and its shareholder named therein. Incorporated by reference to Exhibit 10.1 to registrant’s current report on Form 8-K on April 11, 2022. 10.9 Lock-up Agreement dated April 8, 2022. Incorporated by Incorporated by reference to Exhibit 10.2 to registrant’s current report on Form 8-K on April 11, 2022. 10.10 Non-competition and non-solicitation Agreement dated April 8, 2022. Incorporated by Incorporated by reference to Exhibit 10.3 to registrant’s current report on Form 8-K on April 11, 2022. 10.11 Securities Purchase Agreement dated May 19, 2022. Incorporated by Incorporated by reference to Exhibit 10.1 to registrant’s current report on Form 8-K on May 20, 2022. 10.12 Share Exchange Agreement date July 15, 2022. Incorporated by Incorporated by reference to Exhibit 10.1 to registrant’s current report on Form 8-K on July 18, 2022. 10.13 Share Purchase Agreement dated August 8, 2022. Incorporated by Incorporated by reference to Exhibit 10.1 to registrant’s current report on Form 8-K on August 9, 2022. 10.14 Amended Consultation and Service Agreement dated August 8, 2022. Incorporated by Incorporated by reference to Exhibit 10.2 to registrant’s current report on Form 8-K on August 9, 2022. 10.15 Amended Business Cooperation Agreement dated August 8, 2022. Incorporated by Incorporated by reference to Exhibit 10.3 to registrant’s current report on Form 8-K on August 9, 2022. 10.17 Amended Equity Pledge Agreement dated August 8, 2022. Incorporated by Incorporated by reference to Exhibit 10.4 to registrant’s current report on Form 8-K on August 9, 2022. 31 Exhibit No. Description 10.18 Amended Equity Option Agreement dated August 8, 2022. Incorporated by Incorporated by reference to Exhibit 10.5 to registrant’s current report on Form 8-K on August 9, 2022. 10.19 Amended Voting Right Proxy and Financial Supporting Agreement. Incorporated by Incorporated by reference to Exhibit 10.6 to registrant’s current report on Form 8-K on August 9, 2022. 10.20 Share Purchase Agreement dated September 14, 2022. Incorporated by Incorporated by reference to Exhibit 10.1 to registrant’s current report on Form 8-K on September 19, 2022. 10.21 Termination Agreement dated December 16, 2022. Incorporated by Incorporated by reference to Exhibit 10.1 to registrant’s current report on Form 8-K on December 16, 2022. 14.1 Business Ethics Policy and Code of Conduct, adopted on April 30, 2007. Incorporated by reference to Exhibit 14 to the registrant’s current report on Form 8-K filed on May 9, 2007. 21.1* List of subsidiaries of the registrant. 31.1* Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS Inline XBRL Instance Document. 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Filed herewith ** Furnished herewith ITEM 16. FORM 10-K SUMMARY Not applicable. 32 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PLANET GREEN HOLDINGS CORP. Date: March 31, 2023 By: /s/ Bin Zhou Bin Zhou, Chief Executive Officer and Chairman (Principal Executive Officer) By: /s/ Lili Hu Lili Hu, Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Bin Zhou Chief Executive Officer and Chairman March 31, 2023 Bin Zhou (Principal Executive Officer) /s/ Lili Hu Chief Financial Officer and Director March 31, 2023 Lili Hu (Principal Financial Officer and Principal Accounting Officer) /s/ Luojie Pu Director March 31, 2023 Luojie Pu /s/ King Fai Leung Director March 31, 2023 King Fai Leung /s/ Yang Cao Director March 31, 2023 Yang Cao 33 PLANET GREEN HOLDINGS CORP. CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 202 1 (Stated in US Dollars) CONTENTS PAGES Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-6 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2022 and 2021 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 F-9 Notes to Consolidated Financial Statements F-10 to F-32 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and the stockholders of Planet Green Holdings Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Planet Green Holdings Corp.and subsidiaries (collectively, the “Company”) as of December 31, 2022, and the related consolidated statement of operations and comprehensive income, changes in shareholder’s equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company records an accumulated deficit as of December 31, 2022, and the Company currently has a working capital deficit, continued net losses and negative cash flows from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 1. These consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. F- 2 Critical Audit Matters The critical audit matter communicated below is matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Impairment of goodwill - evaluation of the carrying value of goodwill Description of the matter Refer to Note 2 and Note 16 to the consolidated financial statements, the Company performs a goodwill impairment test on an annual basis or whenever events or changes in circumstances indicate that the carrying value of a reporting unit might exceed its fair value. The discount rate applied to projected cash flows is an important element used by the Company in determining the fair value of the reporting unit and the amount of goodwill impairment losses. In the year of 2022, the Company performed an annual goodwill impairment test in response to the decline in current market conditions because of the persistent operating losses. The goodwill was determined to be impaired, and impairment losses of $10.39 million was recorded. How we addressed the matter in our audit We identified the evaluation of the discount rate applied to projected cash flows used in the assessment of the carrying value of goodwill for the reporting entity, for which such assumptions are used by the Company in the determination of goodwill impairment losses, as a critical audit matter. Specifically, the evaluation of these assumptions required the application of subjective auditor judgment because changes to these assumptions may have a substantial impact on the determination of fair value of the reporting unit. We gathered data and evidence to perform sensitivity analyses to determine the significance of the assumptions used to determine the fair value of the reporting unit, which required a higher degree of auditor judgment. We tested management’s assumptions by evaluating the impact of adjusting the revenue growth assumptions over intervals deemed reasonable and recalculating the prior year’s goodwill impairment calculations using the Company’s actual 2022 revenues. Addressing the matter involved evaluating the Company’s assessment of the value of the reporting unit under the discounted cash flow method. We gathered data and evidence, performed independent analysis, and exercised professional judgment during our evaluation process. /s/ YCM CPA, Inc . We have served as the Company’s auditor since 2022. PCAOB ID 6781 Irvine, California March 31, 2023 F- 3 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To: The Board of Directors and Stockholders of Planet Green Holdings Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Planet Green Holdings Corp. and its subsidiaries (the Company) as of December 31, 2021, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows for the year ended December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company had incurred substantial losses during the year, has substantial accumulated deficit and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plan in regards to these matters are described in Note 1. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. F- 4 Critical Audit Matters The critical audit matter communicated below is matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Evaluation of the carrying value of goodwill in the Canadian and Jingshan Sanhe reporting units As discussed in Note 2 to the consolidated financial statements, the Company performs a goodwill impairment test on an annual basis or whenever events or changes in circumstances indicate that the carrying value of a reporting unit might exceed its fair value. The discount rate applied to projected cash flows is important elements used by the Company in determining the fair value of the reporting unit and the amount of goodwill impairment losses. In the last quarter of 2021, the Company performed an annual goodwill impairment test in response to the decline in current market conditions as a result of the COVID-19 pandemic. The goodwill was determined to be impaired, and impairment losses of $3.26 million was recorded. We identified the evaluation of the discount rate applied to projected cash flows used in the assessment of the carrying value of goodwill for the reporting unit, for which such assumptions are used by the Company in the determination of goodwill impairment losses, as a critical audit matter. Specifically, the evaluation of these assumptions required the application of subjective auditor judgment because changes to these assumptions may have a substantial impact on the determination of fair value of the reporting unit. We gathered data and evidence to performed sensitivity analyses to determine the significance of the assumptions used to determine the fair value of the reporting unit, which required a higher degree of auditor judgment. Addressing the matter involved evaluating the Company’s assessment of the value of the reporting unit under the discounted cash flow method. We gathered data and evidence, performed independent analysis, and exercised professional judgment during our evaluation process. /s/ WWC, P.C. WWC, P.C. Certified Public Accountants We have served as the Company’s auditor since 2007 San Mateo, California March 30, 2022 F- 5 Planet Green Holdings Corp. Consolidated Balance Sheets As of December 31, 2022 and 2021 (Stated in US Dollars) December 31, 2022 2021 Assets Current assets Cash and cash equivalents $ 93,487 $ 750,658 Restricted cash - 380,750 Accounts receivable, net 2,996,638 3,819,073 Inventories 4,153,680 7,816,432 Advances to suppliers 5,417,449 5,681,083 Other receivables 413,315 1,185,136 Other receivables-related parties 180,578 7,670,434 Prepaid expenses 579,826 - Total current assets 13,834,973 27,303,566 Non-current assets Plant and equipment, net 22,569,125 20,485,449 Intangible assets, net 3,070,172 4,199,651 Construction in progress, net 33,260 2,475,874 Prepayment investments - 705,805 Long-term investments 16,488,157 3,136,910 Investment in real estates - 7,770,943 Deferred tax assets - 1,172,050 Goodwill 4,724,699 18,180,532 Right-of-use assets - 584,802 Total non-current assets 46,885,413 58,712,016 Total assets $ 60,720,386 $ 86,015,582 Liabilities and Stockholders’Equity Current liabilities Loans-current 3,589,582 6,822,054 Accounts payable 3,528,057 6,237,810 Advance from customers 2,624,070 6,190,091 Taxes payable 1,083,493 787,593 Other payables and accrued liabilities 4,412,833 8,635,189 Other payables-related parties 4,282,841 5,196,227 Lease liabilities-current portion - 436,191 Deferred income 52,088 73,732 Total current liabilities 19,572,964 34,378,887 Non-current liabilities other long-term liabilities 273,757 - Loans-noncurrent 287,167 380,345 Total non-current liabilities 560,924 380,345 Total liabilities $ 20,133,888 $ 34,759,232 Stockholders’ equity Preferred stock: $ 0.001 par value, 5,000,000 shares authorized; none issued and outstanding as of December 31, 2022 and 2021 - - Common stock: $0.001 par value, 200,000,000 shares authorized; 72,081,930 and 35,581,930 shares Issued and outstanding as of December 31, 2022 and 2021 72,082 35,582 Additional paid-in capital 155,702,975 133,232,224 Accumulated deficit ( 119,880,801 ) ( 94,072,383 ) Accumulated other comprehensive income 4,692,242 7,711,057 Non-controlling interests - 4,349,870 Total stockholders’ equity $ 40,586,498 $ 51,256,350 Total liabilities and stockholders’ equity $ 60,720,386 $ 86,015,582 See Accompanying Notes to the Financial Statements F- 6 Planet Green Holdings Corp. Consolidated Statements of Operations and Comprehensive (Loss) Income For the Years Ended December 31, 2022 and 2021 (Stated in US Dollars) For the Years Ended December 31, 2022 2021 Net revenues $ 44,756,826 $ 37,767,964 Cost of revenues 40,404,996 33,921,709 Gross profit 4,351,830 3,846,255 Operating expenses: Selling and marketing expenses 2,167,036 2,053,452 General and administrative expenses 7,055,512 7,220,769 Research & Developing expenses 402,729 808,383 Total operating expenses 9,625,277 10,082,604 Operating (loss) income ( 5,273,447 ) ( 6,236,349 ) Other (expenses) income Interest income 9,390 1,455 Interest expenses ( 633,787 ) ( 646,572 ) Other income 1,207,603 300,885 Other expenses ( 108,364 ) ( 90,646 ) Share of losses from equity method investments ( 83,508 ) - Impairment of goodwill ( 10,385,862 ) ( 3,263,424 ) Total other (expenses) income ( 9,994,528 ) ( 3,698,302 ) (Loss) income before income taxes ( 15,267,975 ) ( 9,934,651 ) Income tax expenses ( 1,475,169 ) ( 56,450 ) Loss from continuing operations ( 16,743,144 ) ( 9,991,101 ) Discontinued operations: (Loss) income from discontinued operations ( 9,191,791 ) - Net (loss) income ( 25,934,935 ) ( 9,991,101 ) Less:Net (loss) income attributable to non-controlling interest from continued operations ( 153,018 ) ( 250,616 ) Less:Net (loss) income attributable to non-controlling interest from discontinued operations 26,501 - Net (loss) income attributable to common shareholders $ ( 25,808,418 ) $ ( 9,740,485 ) Net (loss) income ( 25,934,935 ) ( 9,991,101 ) Foreign currency translation adjustment ( 3,018,815 ) 761,962 Total comprehensive (loss) income ( 28,953,750 ) ( 9,229,139 ) Less:Comprehensive (loss) income attribute to non-controlling interest - ( 227,548 ) Comprehensive (loss) income attribute to common share holders $ ( 28,953,750 ) $ ( 9,001,591 ) (Loss) earnings per common share - basic and diluted Continuing operations $ ( 0.28 ) $ ( 0.40 ) Discontinued operations $ ( 0.15 ) $ - Common shareholders $ ( 0.43 ) $ ( 0.39 ) Basic and diluted weighted average shares outstanding 59,502,478 24,778,588 See Accompanying Notes to the Financial Statements F- 7 Planet Green Holdings Corp. Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2022 and 2021 (Stated in US Dollars) Accumulated Additional Other Non- Number of Common Paid-in Accumulated Comprehensive Controlling Shares Stock Capital Deficit Income Interests Total Balance, January 1, 2021 11,809,930 $ 11,810 $ 95,659,360 $ ( 84,331,897 ) $ 6,972,163 $ - $ 18,311,436 Net (loss) income - - - ( 9,740,486 ) - ( 250,616 ) ( 9,991,102 ) Issuance of shares for acquisition 16,200,000 16,200 22,681,227 - - - 22,697,427 Issuance of common stock for cash 6,700,000 6,700 13,732,749 - - - 13,739,449 Stock-based compensation and issue of employee benefit plan stock 872,000 872 1,158,888 - - - 1,159,760 Acquiring subsidiaries - - - - - 4,577,418 4,577,418 Foreign currency translation adjustment - - - - 738,894 23,068 761,962 Balance, December 31, 2021 35,581,930 $ 35,582 $ 133,232,224 $ ( 94,072,383 ) $ 7,711,057 $ 4,349,870 $ 51,256,350 Balance, January 1, 2022 35,581,930 $ 35,582 $ 133,232,224 $ ( 94,072,383 ) $ 7,711,057 $ 4,349,870 $ 51,256,350 Net (loss) income - - - ( 25,808,418 ) - - ( 25,808,418 ) Issuance of common stock for cash 17,000,000 17,000 11,083,000 - - - 11,100,000 Issuance of shares for acquisition 7,500,000 7,500 7,422,000 - - - 7,429,500 Issuance of shares for long-term investment 12,000,000 12,000 9,588,000 - - - 9,600,000 Acquisition of additional noncontrolling interest - ( 2,721,507 ) - - ( 468,686 ) ( 3,190,193 ) Deconsolidation of discontinued operations ( 2,900,742 ) - - ( 3,881,184 ) ( 6,781,926 ) Foreign currency translation adjustment - - - - ( 3,018,815 ) - ( 3,018,815 ) Balance, December 31, 2022 72,081,930 $ 72,082 155,702,975 $ ( 119,880,801 ) $ 4,692,242 $ - $ 40,586,498 See Accompanying Notes to the Financial Statements F- 8 Planet Green Holdings Corp. Consolidated Statements of Cash Flows For the Years Ended December 31, 2022 and 2021 (Stated in US Dollars) 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ ( 25,808,418 ) $ ( 9,991,102 ) Adjustments to reconcile net loss to cash (used in) provided by operating activities: - Depreciation 1,354,218 2,212,080 Amortization 129,144 241,172 share-based compensation expense - 1,159,760 Impairment of inventories 206,263 - Impairment of goodwill 10,385,862 3,225,079 Share of losses from equity method investments 83,508 - (Recovery of) allowance for doubtful accounts 58,294 - Loss (gain) on disposal of subsidiaries 9,572,558 - Other non-cash expenses 26,501 - Changes in operating assets and liabilities, net of effects of acquisitions and disposals: - Note and account receivables，net ( 665,659 ) ( 384,977 ) Inventories - ( 1,331,385 ) Prepayments and deposit 849,187 4,676,936 Other receivables 139,638 349,817 Other receivables-related party - ( 4,814,037 ) Accounts payables ( 364,035 ) 1,364,041 Advance from customer ( 99,388 ) ( 1,540,669 ) Other payables and accruals ( 2,971,689 ) 2,384,255 Other payables-related parties ( 1,908,407 ) 1,750,240 Taxes payable - 198,722 Deferred income - ( 15,246 ) Lease liability - ( 4,082 ) Net cash provided by (used in) operating activities ( 9,012,423 ) ( 519,396 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of plant and equipment - ( 1,393,139 ) Purchase of intangible assets - ( 124,337 ) Purchase of long-term investment ( 4,100,000 ) ( 3,100,052 ) Purchase of real estates - ( 7,679,634 ) Net increase in cash from acquisition subsidiaries 246,322 482,760 Net cash provided by (used) in investing activities ( 3,853,678 ) ( 11,814,402 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments of short-term loan ( 3,232,472 ) ( 953,355 ) Proceeds from long-term loans 2,973,267 ( 1,036,094 ) Proceeds from issuance of common stock 11,100,000 10,921,157 Net cash provided by (used in) financing activities 10,840,795 8,931,708 Net decrease in cash and cash equivalents ( 2,025,306 ) ( 3,402,090 ) EFFECT OF EXCHANGE RATE ON CASH 987,385 1,117,747 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,131,408 3,415,751 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 93,487 $ 1,131,408 SUPPLEMENTARY OF CASH FLOW INFORMATION Interest received $ 9,390 $ 1,455 Interest paid $ 633,787 $ 646,572 NON-CASH TRANSACTIONS Operating lease right-of-use assets $ - $ 584,802 Issuance of shares for acquisition $ 7,429,500 $ 22,697,427 issuance of common stock for employee compensation $ - $ 1,159,760 Issuance of shares for long-term investment $ 9,600,000 $ - See Accompanying Notes to the Financial Statements F- 9 PLANET GREEN HOLDINGS CORP. NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Stated in US Dollars) 1. Organization and Principal Activities Planet Green Holdings Corp. (the “Company” or “PLAG”) is a holding company incorporated in Nevada. The Company are engaged in various businesses through our subsidiaries and controlled entities in China. Going Concern The accompanying audited 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 $ 25,808,418 and $ 9,740,486 attributable to common shareholders for the year ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the Company had an accumulated deficit of $ 119,880,801 and $ 94,072,383 respectively; a working capital deficit of $ 5,737,991 and $ 7,075,320 , its net cash used in operating activities was $ 9,012,423 and $ 519,396 , for the year ended December 31, 2022 and 2021 respectively. These factors raise substantial doubt on the Company’s ability to continue as a going concern. The accompanying audited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plan for the Company’s continued existence is dependent upon management’s ability to execute the business plan, develop the plan to generate profit; additionally, Management may need to continue to rely on private placements or certain related parties to provide funding for investment, for working capital and general corporate purposes. If management is unable to execute its plan, the Company may become insolvent. 2. Summary of Significant Accounting Policies Method of Accounting Management has prepared the accompanying financial statements and these notes according to generally accepted accounting principles in the United States (“GAAP”). The Company maintains its general ledger and journals with the accrual method accounting. Principles of Consolidation The accompanying consolidated financial statements reflect the activities of Planet Green Holdings Corp. and each of the following entities: Place of Attributable equity Registered Name of Company incorporation interest % capital Promising Prospect BVI Limited (formerly known as Planet Green Holdings Corporation) The British Virgin Islands 100 $ 10,000 Promising Prospect HK Limited (formerly known as Lucky Sky Planet Green Holdings Co., Limited (H.K.)) Hong Kong 100 1 Jiayi Technologies (Xianning) Co., Ltd. PRC 100 2,000,000 Fast Approach Inc. Canada 100 79 Shanghai Shuning Advertising Co., Ltd. (a subsidiary of FAST) PRC 100 - Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. PRC 100 4,710,254 Xianning Bozhuang Tea Products Co., Ltd. PRC 100 6,277,922 Jilin Chuangyuan Chemical Co., Ltd PRC VIE 9,280,493 Bless Chemical Co., Ltd (a subsidiary of Shine Chemical) Hong Kong 100 10,000 Hubei Bryce Technology Co., Ltd. (a subsidiary of Bless Chemical) PRC 100 30,000,000 Shandong Yunchu Supply Chain Co., Ltd PRC 100 5,000,000 Allinyson Ltd The United States 100 100,000 Shine Chemical Co., Ltd The British Virgin Islands 100 8,000 Guangzhou Haishi Technology Co., Ltd PRC 100 156,250 Baokuan Technology (Hongkong) Limited Hong Kong 100 1,250 Management has eliminated all significant inter-company balances and transactions in preparing the accompanying consolidated financial statements. Ownership interests of subsidiaries that the Company does not wholly own are accounted for as non-controlling interests. On May 18, 2018, the Company incorporated Planet Green Holdings Corporation, a limited company incorporated in the British Virgin Islands. On September 28, 2018, Planet Green BVI acquired JianShi Technology Holding Limited, a limited company incorporated in Hong Kong on February 21, 2012, and Shanghai Xunyang Internet Tech Co., Ltd., a wholly-owned foreign entity incorporated in Shanghai, PRC, on August 29, 2012 (“Shanghai Xunyang”). F- 10 On August 12, 2019, through Promising Prospect HK Limited, formerly known as JianShi Technology Holding Limited, Company established Lucky Sky Petrochemical Technology (Xianning) Co., Ltd., a wholly foreign-owned enterprise incorporated in Xianning City, Hubei Province, China. On December 20, 2019, The Promising Prospect HK Limited sold 100 % of equity interest in Shanghai Xunyang. On May 29, 2020, the Promising Prospect BVI Limited incorporated Lucky Sky Planet Green Holdings Co., Limited, a limited company incorporated in Hong Kong. On June 5, 2020, the Promising Prospect BVI Limited acquired all of the outstanding equity interests of Fast Approach Inc. It was incorporated under Canada’s laws and the operation of a demand-side platform targeting the Chinese education market in North America. On June 16, 2020, Lucky Sky Holdings Corporations (H.K.) transferred its 100 % equity interest in Lucky Sky Petrochemical to Lucky Sky Planet Green Holdings Co., Limited (H.K.). On September 15, 2020, Lucky Sky Petrochemical terminated the VIE agreements with Shenzhen Lorain and Taishan Muren On August 10, 2020, Promising Prospect BVI Limited transferred its 100 % equity interest in Promising Prospect HK Limited to Rui Tang. On December 9, 2020, Lucky Sky Petrochemical Technology (Xianning) Co., Ltd. changed its name to Jiayi Technologies (Xianning) Co., Ltd. On January 6, 2021, Planet Green Holdings Corporation(Nevada) issued an aggregate of 2,200,000 shares of common stock of the Company to the equity holders of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd in exchange for the transfer of 85 % of the equity interest of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd to the Jiayi Technologies (Xianning) Co., Ltd. On March 9, 2021, Planet Green Holdings Corporation(Nevada) issued an aggregate of 3,300,000 shares of common stock of the Company to the equity holders of Jilin Chuangyuan Chemical Co., Ltd in exchange for the transfer of 75 % of the equity interest of Jilin Chuangyuan Chemical Co., Ltd to the Jiayi Technologies (Xianning) Co., Ltd. On July 15, 2021, Planet Green Holdings Corporation(Nevada) issued an aggregate of 4,800,000 shares of common stock of the Company to the equity holders of Anhui Ansheng Petrochemical Equipment Co., Ltd for the transfer to 66 % of the equity interest if Anhui Ansheng Petrochemical Equipment Co., Ltd to the Jiayi Technologies (Xianning) Co., Ltd. On August 1, 2021, Jiayi Technologies (Xianning) Co., Ltd has terminated the VIE agreements with Xianning Bozhuang Tea Products Co., Ltd and acquired 100 % equity of Xianning Bozhuang Tea Products Co., Ltd. As a result, Xianning Bozhuang Tea Products Co., Ltd has been wholly-owned subsidiaries of the Jiayi Technologies (Xianning) Co., Ltd. On August 3, 2021, the Planet Green Holding Corp has acquired 8,000,000 ordinary shares of the Shine Chemical Co., Ltd. As a result, Shine Chemical Co., Ltd, Bless Chemical Co., Ltd and Hubei Bryce Technology Co., Ltd have been wholly-owned subsidiaries of the Planet Green Holding Corp. On September 1st, 2021, Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd has changed its major shareholder from Mr.Feng Chao to Hubei Bryce Technology Co., Ltd and Hubei Bryce Technology Co., Ltd has hold 85 % shares of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd after the alteration of shareholders. On December 9, 2021, Planet Green Holdings Corporation(Nevada) issued an aggregate of 5,900,000 shares of common stock to the equity holders of Shandong Yunchu Supply Chain Co., Ltd for the transfer to 100 % of the equity interest of Shandong Yunchu Supply Chain Co., Ltd to the Jiayi Technologies (Xianning) Co., Ltd. On April 8, 2022, Planet Green Holdings Corporation (Nevada) issued an aggregate of 7,500,000 shares of common stock to the equity holders of Allinyson Ltd. for the acquisition of 100 % of the equity interest of Allinyson Ltd. On September 14, 2022, Planet Green Holdings Corp. and Hubei Bulaisi Technology Co., Ltd. a subsidiary of the Company, entered into a Share Purchase Agreement with Xue Wang, a shareholder of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd., pursuant to which, among other things and subject to the terms and conditions contained therein, the Purchaser agreed to effect share purchase from the Seller of 15% of the outstanding equity interests of Jingshan, and the Company shall pay to the Seller an aggregate of U.S. $3,000,000 in exchange for 15% of the issued and outstanding shares. Before the closing of this Share Purchase transaction, the Company owns 85% equity interest of Jingshan through the Purchaser. On September 14, 2022, the Company closed the Share Purchase transaction. As of September 30, 2022, Hubei Bryce Technology Co., Ltd. has hold 100% shares of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. after the alteration of shareholders. F- 11 Consolidation of Variable Interest Entity On 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. On 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. It became the primary beneficiary of Xianning Bozhuang. The Company consolidated Xianning Bozhuang’s accounts as its VIE. On December 20, 2019, the Company sold 100 % of equity interest in Shanghai Xunyang and terminated its VIE agreements with Xianning Bozhuang, Shenzhen Lorain, and Taishan Muren. On 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. The Company is considered the primary beneficiary of these operating companies, and it consolidates their accounts as VIEs. On September 6, 2020, it terminated its VIE agreements with Shenzhen Lorain and Taishan Muren. On March 9, 2021, through Jiayi Technologies (Xianning) Co., Ltd, formerly known as Lucky Sky Petrochemical Technology (Xianning) Co., Ltd, the Company entered into exclusive VIE agreements (“VIE Agreements”) with Jilin Chuangyuan Chemical Co., Ltd, as well as their shareholders, which 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, and it consolidates their accounts as VIEs. On July 15, through Jiayi Technologies (Xianning) Co., Ltd, formerly known as Lucky Sky Petrochemical Technology (Xianning) Co., Ltd, the Company entered into exclusive VIE agreements (“VIE Agreements”) with Anhui Ansheng Petrochemical Equipment Co., Ltd, 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. The Company is considered the primary beneficiary of these operating companies, and it consolidates their accounts as VIEs. On August 1, 2021, Jiayi Technologies (Xianning) Co., Ltd has terminated the VIE agreements with Xianning Bozhuang Tea Products Co., Ltd On December 16, 2022, Jiayi Technologies (Xianning) Co., Ltd terminated the VIE agreements with Xiaodong Cai and Anhui Ansheng Petrochemical Equipment Co., Ltd. Each of the VIE Agreements is described in detail below Consultation and Service Agreement Under the Consultation and Service Agreement, WFOE has the exclusive right to provide consultation and services to the operating entities in China in business management, human resource, technology, and intellectual property rights. WFOE exclusively owns any intellectual property rights arising from the performance of this Consultation and Service Agreement. The number of service fees and payment terms can be amended by the WFOE and operating companies’ consultation and implementation. The duration of the Consultation and Service Agreement is 20 years. WFOE may terminate this agreement at any time by giving 30 day’s prior written notice. Under the Consultation and Service Agreement, WFOE has the exclusive right to provide consultation and services to the operating entities in China in business management, human resource, technology, and intellectual property rights. WFOE exclusively owns any intellectual property rights arising from the performance of this Consultation and Service Agreement. The number of service fees and payment terms can be amended by the WFOE and operating companies’ consultation and implementation. The duration of the Consultation and Service Agreement is 20 years. WFOE may terminate this agreement at any time by giving 30 day’s prior written notice. F- 12 Business Cooperation Agreement Pursuant to the Business Cooperation Agreement, WFOE has the exclusive right to provide complete technical support, business support, and related consulting services, including but not limited to specialized services, business consultations, equipment or property leasing, marketing consultancy, system integration, product research and development, and system maintenance. WFOE exclusively owns any intellectual property rights arising from the performance of this Business Cooperation Agreement. The rate of service fees may be adjusted based on the services rendered by WFOE in that month and the operational needs of the operating entities. The Business Cooperation Agreement shall maintain effective unless it was terminated or was compelled to release under applicable PRC laws and regulations. WFOE may terminate this Business Cooperation Agreement at any time by giving 30 day’s prior written notice. Equity Pledge Agreements According to the Equity Pledge Agreements among WFOE, operating entities, and each of operating entities’ shareholders, shareholders of the operating entities pledge all of their equity interests in the functional entities to WFOE to guarantee their performance of relevant obligations and indebtedness under the Technical Consultation and Service Agreement and other control agreements. Besides, shareholders of the operating entities are in the process of registering the equity pledge with the competent local authority. Equity Option Agreements According to the Equity Option Agreements, WFOE has the exclusive right to require each shareholder of the operating companies to fulfill and complete all approval and registration procedures required under PRC laws for WFOE to purchase or designate one or more persons to buy, each shareholder’s equity interests in the operating companies, once or at multiple times at any time in part or in whole at WFOE’s sole and absolute discretion. The purchase price shall be the lowest price allowed by PRC laws. The Equity Option Agreements shall remain effective until all the equity interest owned by each operating entity shareholder has been legally transferred to WFOE or its designee(s). Voting Rights Proxy Agreements According to the Voting Rights Proxy Agreements, each shareholder irrevocably appointed WFOE or WFOE’s designee to exercise all his or her rights as the shareholders of the operating entities under the Articles of Association of each operating entity, including but not limited to the power to exercise all shareholder’s voting rights concerning all matters to be discussed and voted in the shareholders’ meeting. The term of each Voting Rights Proxy Agreement is 20 years. WOFE has the right to extend each Voting Proxy Agreement by giving written notification. Based on the foregoing contractual arrangements, The Company consolidates the accounts of Xianning Bozhuang Tea Products Co., Ltd, Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd and Jilin Chuangyuan Chemical Co., Ltd in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting Standards Codification (“ASC”) 810-10, Consolidation. Enterprise-wide disclosure The Company’s chief operating decision-makers (i.e. chief executive officer and her direct reports) review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by business lines for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established by Accounting Standards Codification (“ASC”) 280, “Segment Reporting”, the Company considers itself to be operating within one reportable segment. F- 13 Use of Estimates The financial statements preparation requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available when the calculations are made; however, actual results could differ materially from those estimates. Significant estimates required to be made by management include but are not limited to add accounts that use significant estimates, such as the allowance for estimated uncollectible receivables, realizability of advance to suppliers, inventory valuations, etc. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of December 31, 2022, the Company had cash and cash equivalents (including restricted cash) of $ 93.49 k compared to $ 1131.41 k as of December 31, 2021. Accounts Receivables Accounts receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when the collection of the total amount is no longer probable. Bad debts are written off as incurred. Inventories Inventories consist of raw materials and finished goods, stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, inbound shipping costs, and allocated overhead. The Company applies the weighted average cost method to its inventory. Advances and Prepayments to Suppliers The Company makes an advance payment to suppliers and vendors for the procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers, the applicable amount is reclassified from advances and prepayments to suppliers to inventory. F- 14 Plant and Equipment Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. The Company typically applies a salvage value of 0 % to 10 %. The estimated useful lives of the plant and equipment are as follows: Buildings 20 - 40 years Landscaping, plant, and tree 30 years Machinery and equipment 1 - 10 years Motor vehicles 5 - 10 years Office equipment 5 - 20 years The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the Company’s results of operations. The costs of maintenance and repairs are recognized as incurred; significant renewals and betterments are capitalized. Intangible Assets Intangible assets are carried at cost less accumulated amortization. Amortization is provided over their useful lives, using the straight-line method. The estimated useful lives of the intangible assets are as follows: Land use rights 50 years Software licenses 2 years Trademarks 10 years Construction in Progress and Prepayments for Equipment Construction in progress and prepayments for equipment represent direct and indirect acquisition and construction costs for plants and fees of purchase and installation of related equipment. Amounts classified as construction in progress and prepayments for equipment are transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Depreciation is not provided for assets classified in this account. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. The Company conducts an annual assessment of its goodwill for impairment. If the carrying value of its goodwill exceeds its fair value, then impairment has been incurred; accordingly, a charge to the Company’s operations results will be recognized during the period. Impairment losses on goodwill are not reversed. Fair value is generally determined using a discounted expected future cash flow analysis. Accounting for the Impairment of Long-lived Assets The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may become obsolete from a difference in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate adequate profits. Impairment is present if the carrying amount of an asset is less than its expected future undiscounted cash flows. If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported lower the carrying amount or fair value fewer costs to selling. F- 15 Statutory Reserves Statutory reserves refer to the amount appropriated from the net income following laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10 % of its profit. Such an appropriation is necessary until the reserve reaches a maximum equal to 50 % of the enterprise’s PRC registered capital. Foreign Currency Translation The accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). The Company’s assets and liabilities are translated into United States dollars from RMB at year-end exchange rates. Its revenues and expenses are translated at the average exchange rate during the period. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. 12/31/2022 12/31/2021 12/31/2020 Period-end US$: CAD$ exchange rate 1.3554 1.274 1.2754 Period-end US$: RMB exchange rate 6.9646 6.3757 6.5326 Period-end US$: HK exchange rate 7.7967 7.7981 7.7834 Period average US$: CAD$ exchange rate 1.3012 1.2531 1.3409 Period average US$: RMB exchange rate 6.7261 6.4515 6.8996 Period average US$: HK exchange rate 7.8310 7.7729 7.7823 The RMB is not freely convertible into foreign currencies, and all foreign exchange transactions must be conducted through authorized financial institutions. Revenue Recognition The Company adopted ASC 606 “Revenue Recognition.” It recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expect to be entitled to in exchange for those goods or services. The Company derives its revenues from selling explosion-proof skid-mounted refueling device, SF double-layer buried oil storage tank, high-grade synthetic fuel products, industrial formaldehyde solution, urea-formaldehyde pre-condensate (UFC), methylal, urea-formaldehyde glue for environment-friendly artificial board chemicals, food products like frozen fruits, beef & mutton products and vegetables and tea products. The Company applies the following five steps to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: ● identify the contract with a customer; ● identify the performance obligations in the contract; ● determine the transaction price; ● allocate the transaction price to performance obligations in the contract; and; ● Recognize revenue as the performance obligation is satisfied. Advertising All advertising costs are expensed as incurred. Shipping and Handling All outbound shipping and handling costs are expensed as incurred. Research and Development All research and development costs are expensed as incurred. F- 16 Retirement Benefits Retirement benefits in the form of mandatory government-sponsored defined contribution plans are charged to either expense as incurred or allocated to inventory as part of overhead. Stock-Based Compensation The Company records stock compensation expense for employees at fair value on the grant date and recognizes the expense one time because there is no employee’s requisite service period requirement. Income Taxes The Company accounts for income tax using an asset and liability approach and recognizes deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets. If it is more likely than not, these items will either expire before the Company can realize their benefits or uncertain future realization. Comprehensive Income The Company uses Financial Accounting Standards Board (“FASB”) ASC Topic 220, “Reporting Comprehensive Income.” Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Earnings Per Share The Company computes earnings per share (“EPS”) following ASC Topic 260, “Earnings per share.” Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive impacts of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warranties are computed using the treasury stock method. Potentially anti-dilutive securities (i.e., those that increase income per share or decrease loss per share) are excluded from diluted EPS calculation. Fair Value Measurement The Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities, and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosing the Company’s fair value of financial instruments. ASC Topic 825, “Financial Instruments,” defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities qualify as financial instruments and are a reasonable estimate of their fair values because of the short period between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: ● Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets. ● Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and information that are observable for the asset or liability, either directly or indirectly, for substantially the financial instrument’s full term. ● Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. Lease Effective December 31, 2018, Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. adopted ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that do not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. F- 17 The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and it includes the associated operating lease payments in the undiscounted future pre-tax cash flows. As of December 31, 2022, there were approximately $ 0 right of use (“ROU”) assets and approximately $ 0 lease liabilities based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 4.75 % and 4.90 % based on the duration of lease terms. Equity investments In January 2016, the FASB issued ASU 2016-01 (“ASU 2016-01”), Recognition and Measurement of Financial Assets and Financial Liabilities, which, among other things, generally requires companies to measure investments in other entities, except those accounted for under the equity method, at fair value and to recognize any changes in fair value in net income. ASU 2016-01 also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, and the guidance should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The guidance related to equity investments without readily determinable fair values (including disclosure requirements) is applied prospectively to equity investments that exist as of the date of adoption. ASU 2016-01, which the Company adopted on January 1, 2018, did not have a material impact on the consolidated financial statements. Investments in entities over which the Company does not have significant influence are recorded as equity investments and are accounted for either at fair value with any changes recognized in net income, or for those without readily determinable fair values, at cost less impairment, adjusted for subsequent observable price changes. Under the equity method, the Company’s share of the post-acquisition profits or losses of equity investments is recognized in the Company’s consolidated statements of comprehensive income; and the Company’s share of post-acquisition movements in equity is recognized in equity in the Company’s consolidated balance sheets. Unrealized gains on transactions between the Company and an entity in which the Company has recorded an equity investment are eliminated to the extent of the Company’s interest in the entity. To the extent of the Company’s interest in the investment, unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Company’s share of losses in an entity in which the Company has recorded an equity investment equals or exceeds its interest in the entity, the Company does not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the equity investee. Commitments and Contingencies From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The majority of these claims and proceedings related to or arise from commercial disputes. The Company first determine whether a loss from a claim is probable, and if it is reasonable to estimate the potential loss. The Company accrues costs associated with these matters when they become probable, and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Also, the Company disclose a range of possible losses, if a loss from a claim is probable but the amount of loss cannot be reasonably estimated, which is in line with the applicable requirements of Accounting Standard Codification 450. The Company’s management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows. Recent Accounting Pronouncements In February 2018, the FASB issued ASU 2018-02, which allows a reclassification from accumulated other comprehensive income to retained earnings for adjustments to tax effects that were originally recorded in other comprehensive income due to changes in the U.S. federal corporate income tax rate resulting from the enactment of the U.S. tax reform legislation, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act. The Company does not expect this guidance will have a material impact on its consolidated financial statements. In March 2018, the FASB issued guidance relative to Income Taxes (Topic 740) that adds various Securities and Exchange Commission (“SEC”) paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Tax Cuts and Jobs Act (the “Tax Act”) in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Cuts and Jobs Act are incomplete by the due date of the financial statements and if possible, to provide a reasonable estimate. Additionally, the Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused the Company to remeasure all U.S. deferred income tax assets and liabilities for temporary differences and NOLs and recorded one time income tax payable to be paid in 8 years. However, this one-time transition tax has no effect on the Company’s income tax expenses as the Company has no undistributed foreign earnings prior to December 31, 2022 which the Company has foreign cumulative losses at December 31, 2022. F- 18 On June 20, 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting, which aligns the accounting for share-based payment awards issued to employees and nonemployees. Under ASU No. 2018-07, the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. The new standard is effective for us on January 1, 2019. Early adoption is permitted, including in interim periods, and should be applied to all new awards granted after the date of adoption. The Company does not expect this guidance will have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement ,” which makes several changes meant to add, modify or remove specific disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. The amendments in this Update modify the disclosure requirements on fair value measurements based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The modifications are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company does not believe the adoption of this ASU would have a material effect on the Company’s condensed financial statements. In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1st, 2020. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. 3. Variable Interest Entity (“VIE”) A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. If any, the variable interest holder with a controlling financial interest in a VIE is deemed the primary beneficiary and must consolidate the VIE. PLAG WOFE is deemed to have the controlling financial interest and be the primary beneficiary of Jilin Chuangyuan Chemical Co., Ltd because it has both of the following characteristics: 1) The power to direct activities at Jilin Chuangyuan Chemical Co., Ltd that most significantly impact such entity’s economic performance, and 2) The obligation to absorb losses and the right to receive benefits from Jilin Chuangyuan Chemical Co., Ltd that could potentially be significant to such entity. Under the Contractual Arrangements, Jilin Chuangyuan Chemical Co., Ltd pay service fees equal to all of its net income to PLAG WFOE. At the same time, PLAG WFOE is obligated to absorb all of the Jilin Chuangyuan Chemical Co., Ltd’s losses. The Contractual Arrangements are designed to operate Jilin Chuangyuan Chemical Co., Ltd for the benefit of PLAG WFOE and ultimately, the Company. Accordingly, the accounts of Jilin Chuangyuan Chemical Co., Ltd are consolidated in the accompanying consolidated financial statements. In addition, those financial positions and results of operations are included in the Company’s consolidated financial statements. F- 19 The carrying amount of VIE’s consolidated assets and liabilities are as follows ： 12/31/2022 12/31/2021 Cash and cash equivalents $ 39,815 $ 67,966 Accounts receivable, net 730,341 2,389,796 Restricted cash - 380,750 Note Receivable - 270,770 Other receivables 65,531 118,708 Inventories 947,466 4,244,869 Advances to suppliers 187,708 310,769 Intercompany receivable 1,579,416 1,725,302 Other receivables-related parties - 7,650,042 TOTAL CURRENT ASSETS 3,550,277 17,158,972 Plant and equipment, net 9,115,598 12,554,727 Intangible assets, net 1,932,386 2,795,048 Construction in progress, net 20,963 2,475,874 Deferred tax assets - 425,374 Total Non-Current Assets 11,068,947 18,251,023 TOTAL ASSETS $ 14,619,224 $ 35,409,995 Short-term bank loans $ 3,589,582 $ 6,822,054 Accounts payable 540,371 3,558,827 Advance from customers 14,395 3,476,585 Other payables and accrued liabilities 2,590,572 3,305,395 Intercompany payable 3,082,819 7,131,860 Other payables-related parties 1,535,974 3,958,409 Taxes payable 18,005 212,658 Deferred income 37,332 58,033 Long term payable-current portion 287,167 126,261 TOTAL CURRENT LIABILITIES 11,696,217 28,650,082 Long-term payables 244,245 222,687 TOTAL LIABILITIES $ 11,940,462 $ 28,872,769 Paid-in capital 9,280,493 12,326,270 Statutory reserve 29,006 29,006 Retained earnings ( 5,775,895 ) ( 5,357,908 ) Accumulated other comprehensive income ( 854,842 ) ( 460,142 ) Total Equity 2,678,762 6,537,226 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 14,619,224 $ 35,409,995 The summarized operating results of the VIE’s are as follows: 12/31/2022 12/31/2021 Operating revenues $ 10,207,464 $ 9,694,499 Gross profit 112,862 2,207,503 Income (loss) from operations ( 1,928,379 ) ( 1,072,779 ) Net income (loss) ( 2,331,594 ) ( 851,735 ) F- 20 4. Business Combination Acquisition of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd On January 4, 2021, Planet Green Holdings Corporation(Nevada) and its wholly-owned subsidiary Jiayi Technologies (Xianning) Co., Ltd, formerly known as Lucky Sky Petrochemical Technology (Xianning) Co., Ltd., entered into a series of VIE agreements with Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd and its equity holders to obtain control and become the primary beneficiary of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd. The Company consolidated Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd’s accounts as its VIE. According to the VIE agreements, Planet Green Holdings Corporation(Nevada) issued an aggregate of 2,200,000 shares of common stock of the Company to the equity holders of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd in exchange for the transfer of 85 % of the equity interest of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd to the Jiayi Technologies (Xianning) Co., Ltd. The Company’s acquisition of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd was accounted for as a business combination following ASC 805. The Company has allocated the purchase price of Jingshan Sanhe based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities taken at the acquisition date following the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, and intangible assets identified as the acquisition date and considering several other available factors. Acquisition-related costs incurred for the acquisitions are not material and expensed as incurred in general and administrative expenses. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd: Total consideration at fair value $ 4,730,000 Fair Value Cash $ 114,162 Accounts receivable, net - Inventories, net 584,119 Advances to suppliers 1,104,705 Other receivables 536,090 Right-of-use assets 1,044,933 Plant and equipment, net 3,867,906 Deferred tax assets 281,243 Goodwill 923,313 Total assets $ 8,456,471 Short-term loan - bank ( 440,522 ) Lease payable-current portion ( 406,376 ) Accounts payable ( 715,019 ) Advance from customers ( 627,128 ) Other payables and accrued liabilities ( 50,085 ) Lease payable-non current portion ( 818,446 ) Income taxes payable ( 217 ) Total liabilities ( 3,057,793 ) Noncontrolling interest ( 668,678 ) Net assets acquired $ 4,730,000 Approximately $ 0.92 million of goodwill arising from the acquisition consists mainly of synergies expected from combining the operations of the Company and Jingshan Sanhe. None of the goodwill is expected to be deductible for income tax purposes. F- 21 Acquisition of Jilin Chuangyuan Chemical Co., Ltd On March 9, 2021, the Company and its wholly-owned subsidiary Jiayi Technologies (Xianning) Co., Ltd, formerly known as Lucky Sky Petrochemical Technology (Xianning) Co., Ltd., entered into a series of VIE agreements with Jilin Chuangyuan Chemical Co., Ltd and its equity holders to obtain control and become the primary beneficiary of Jilin Chuangyuan Chemical Co., Ltd. The Company consolidated Jilin Chuangyuan Chemical Co., Ltd’s accounts as its VIE. Under the VIE agreements, the Company issued an aggregate of 3,300,000 shares of common stock of the Company to the equity holders of Jilin Chuangyuan Chemical Co., Ltd in exchange for the transfer of 75 % of the equity interest of Jilin Chuangyuan Chemical Co., Ltd to the Jiayi Technologies (Xianning) Co., Ltd. The significant terms of these VIE agreements are summarized in “Note 2 - Summary of Significant Accounting Policies” above. The Company’s acquisition of Jilin Chuangyuan Chemical Co., Ltd was accounted for as a business combination following ASC 805. The Company has allocated the purchase price of Jilin Chuangyuan based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities taken at the acquisition date following the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, and intangible assets identified as of the acquisition date and considering several other available factors. Acquisition-related costs incurred for the acquisitions are not material and expensed as incurred in general and administrative expenses. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Jilin Chuangyuan Chemical Co., Ltd: Total consideration at fair value $ 8,085,000 Fair Value Cash $ 95,237 Accounts receivable, net 868,874 Inventories, net 581,569 Advances to suppliers 388,349 Other receivables 123,969 Other receivables-RP 212,594 Plant and equipment, net 11,109,220 Intangible assets, net 2,149,910 Deferred tax assets 415,154 Goodwill 3,191,897 Total assets $ 19,136,773 Short-term loan - bank ( 3,826,934 ) Long term payable ( 1,162,355 ) Accounts payable ( 575,495 ) Advance from customers ( 291,655 ) Other payables and accrued liabilities ( 2,815,356 ) Other payables-RP ( 765,387 ) Income taxes payable ( 1,073 ) Total liabilities ( 9,438,255 ) Non controlling interest ( 1,613,518 ) Net assets acquired $ 8,085,000 Approximately $ 3.19 million of goodwill arising from the acquisition consists mainly of synergies expected from combining the operations of the Company and Jilin Chuangyuan Chemical Co., Ltd. None of the goodwill is expected to be deductible for income tax purposes. Acquisition of Shandong Yunchu Trading Co., Ltd. On December 9, 2021, the Company and its wholly-owned subsidiary Jiayi Technologies (Xianning) Co., Ltd, formerly known as Lucky Sky Petrochemical Technology (Xianning) Co., Ltd. , entered into a Share Exchange Agreement with Shandong Yunchu Supply Chain Co., Ltd, and each of shareholders of Shandong Yunchu Supply Chain Co., Ltd. The Company issued an aggregate of 5,900,000 shares of common stock to the equity holders of Shandong Yunchu Supply Chain Co., Ltd for the transfer to 100 % of the equity interest of Shandong Yunchu Supply Chain Co., Ltd to the Jiayi Technologies (Xianning) Co., Ltd. F- 22 The Company’s acquisition of Shandong Yunchu Supply Chain Co., Ltd was accounted for as a business combination following ASC 805. The Company has allocated the purchase price of Shandong Yunchu Supply Chain Co., Ltd based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities taken at the acquisition date following the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, and intangible assets identified as of the acquisition date and considered several other available factors. Acquisition-related costs incurred for the acquisitions are not material and expensed as incurred in general and administrative expenses. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Shandong Yunchu Supply Chain Co., Ltd : Total consideration at fair value $ 5,420,920 Fair Value Cash and cash equivalents, and Restricted Cash $ 77,427 Trade receivable and Note receivable 780,556 Inventories - Related party receivable 86,448 Other current assets 4,899,559 Plant and equipment, net - Intangible assets, net - Goodwill 4,724,698 Total assets $ 10,568,688 Short-term loan-bank - Related party payable - Accounts payable ( 992,424 ) Other current liabilities ( 4,155,344 ) Total liabilities ( 5,147,768 ) Non controlling interest - Net assets acquired $ 5,420,920 Approximately $ 4.72 million of goodwill arising from the acquisition consists mainly of synergies expected from combining the operations of the Company and Shandong Yunchu Supply Chain Co., Ltd . None of the goodwill is expected to be deductible for income tax purposes. Acquisition of Anhui Ansheng Petrochemical Equipment Co., Ltd On July 15, 2021, the Company and its wholly-owned subsidiary Jiayi Technologies (Xianning) Co., Ltd, formerly known as Lucky Sky Petrochemical Technology (Xianning) Co., Ltd., entered into a series of VIE agreements with Anhui Ansheng Petrochemical Equipment Co., Ltd and its equity holders to obtain control and become the primary beneficiary of Anhui Ansheng Petrochemical Equipment Co., Ltd. The Company consolidated Anhui Ansheng Petrochemical Equipment Co., Ltd ’s accounts as its VIE. Under the VIE agreements, the Company issued an aggregate of 4,800,000 shares of common stock of the Company to the equity holders of Anhui Ansheng Petrochemical Equipment Co., Ltd in exchange for the transfer of 66 % of the equity interest of Anhui Ansheng Petrochemical Equipment Co., Ltd to the Jiayi Technologies (Xianning) Co., Ltd. The significant terms of these VIE agreements are summarized in “Note 2 - Summary of Significant Accounting Policies” above. The Company’s acquisition of Anhui Ansheng Petrochemical Equipment Co., Ltd was accounted for as a business combination following ASC 805. The Company has allocated the purchase price of Anhui Ansheng Petrochemical Equipment Co., Ltd based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities taken at the acquisition date following the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, and intangible assets identified as of the acquisition date and considered several other available factors. Acquisition-related costs incurred for the acquisitions are not material and expensed as incurred in general and administrative expenses. F- 23 The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Anhui Ansheng Petrochemical Equipment Co., Ltd: Total consideration at fair value $ 7,926,000 Fair Value Cash and cash equivalents, and Restricted Cash $ 288,122 Trade receivable and Note receivable 944,704 I nventories 3,236,008 Related party receivable 2,500,117 Other current assets 1,393,817 Plant and equipment, net 4,036,649 Intangible assets, net 635,738 Goodwill 10,263,937 Total assets $ 23,299,092 Short-term loan-bank ( 3,735,614 ) Related party payable ( 2,639,938 ) Accounts payable ( 1,966,099 ) Other current liabilities ( 3,902,896 ) Total liabilities ( 12,244,547 ) Non controlling interest ( 3,758,545 ) Net assets acquired $ 7,296,000 Approximately $ 10.26 million of goodwill arising from the acquisition consists mainly of synergies expected from combining the operations of the Company and Anhui Ansheng Petrochemical Equipment Co., Ltd. None of the goodwill is expected to be deductible for income tax purposes. On December 12, 2022, the Company disposed of the all interest held of Anhui Ansheng Petrochemical Equipment Co., Ltd. Acquisition of Allinyson Ltd. On April 8, 2022, Planet Green Holdings Corp. (the “Company”) entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Allinyson Ltd., and each of shareholders of Allinyson Ltd. . The Company issued an aggregate of 7,500,000 shares of common stock to the equity holders of Allinyson Ltd. for the transfer to 100 % of the equity interest of Allinyson Ltd. to the Company. The Company’s acquisition of Allinyson Ltd. was accounted for as a business combination following ASC 805. The Company has allocated the purchase price of Allinyson Ltd. based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities taken at the acquisition date following the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, and intangible assets identified as of the acquisition date and considered several other available factors. Acquisition-related costs incurred for the acquisitions are not material and expensed as incurred in general and administrative expenses. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Allinyson Ltd. : Total consideration at fair value $ 7,429,500 Fair Value Cash and cash equivalents, and Restricted Cash $ 246,322 Trade receivable and Note receivable 372,538 Goodwill 7,193,965 Total assets $ 7,812,825 Related party payable ( 73,623 ) Accounts payable ( 273,000 ) Other current liabilities ( 36,702 ) Total liabilities ( 383,325 ) Net assets acquired $ 7,429,500 Approximately $ 7.19 million of goodwill arising from the acquisition consists mainly of synergies expected from combining the operations of the Company and Allinyson Ltd. . None of the goodwill is expected to be deductible for income tax purposes. F- 24 5. Restricted Cash As of December 31, 2022 and 2021, the balance of restricted cash was $ 0 and $ 380,750 , respectively. The details of restricted cash refer to the contingency section. 6. Account Receivable, Net The Company extends credit terms of 15 to 60 days to the majority of its domestic customers, which include third-party distributors, supermarkets, and wholesalers 12/31/2022 12/31/2021 Trade accounts receivable $ 3,362,939 $ 5,481,589 Less: Allowance for doubtful accounts ( 366,301 ) ( 1,662,516 ) $ 2,996,638 $ 3,819,073 Allowance for doubtful accounts Beginning balance: ( 1,662,516 ) ( 46,149 ) Additions to allowance ( 64,899 ) ( 1,616,367 ) Bad debt written-off 1,361,114 - Ending balance $ ( 366,301 ) $ ( 1,662,516 ) 7. Advances and Prepayments to Suppliers Prepayments include investment deposits to guarantee investment contracts and advance payment to suppliers and vendors to procure raw materials. Prepayments consist of the following: 12/31/2022 12/31/2021 Payment to suppliers and vendors $ 5,417,449 $ 5,681,083 Total $ 5,417,449 $ 5,681,083 8. Inventories Inventories consisted of the following as of December 31, 2022 and December 31, 2021 12/31/2022 12/31/2021 Raw materials $ 1,965,389 $ 2,988,855 Inventory of supplies - 12,587 Work in progress 1,455,229 3,007,039 Finished goods 932,261 1,807,951 Allowance for inventory reserve ( 199,199 ) - Total $ 4,153,680 $ 7,816,432 9. Plant and Equipment Plant and equipment consisted of the following as of December 31, 2022 and December 31, 2021: 12/31/2022 12/31/2021 At Cost: Buildings $ 19,924,811 $ 17,550,376 Machinery and equipment 11,322,085 11,681,716 Office equipment 765,413 542,695 Motor vehicles 1,465,225 1,740,191 33,477,534 31,514,978 Less: Impairment ( 759,201 ) ( 829,326 ) Less: Accumulated depreciation ( 10,149,207 ) ( 10,200,203 ) 22,569,125 20,485,449 Construction in progress 33,260 2,475,874 $ 22,602,385 $ 22,961,323 Depreciation expense for the year ended December 31, 2022 and 2021 was $ 1,307,839 and $ 2,212,080 , respectively. F- 25 10. Intangible Assets 12/31/2022 12/31/2021 At Cost: Land use rights 3,051,744 4,121,488 Software licenses 67,464 86,359 Trademark 916,963 993,248 $ 4,036,171 $ 5,201,095 Less: Accumulated amortization ( 966,000 ) ( 1,001,444 ) $ 3,070,171 $ 4,199,651 Amortization expense for the year ended December 31, 2022 and 2021 was $ 124,721 and $ 241,172 respectively. 11. Long term investment The Company entered into an investment agreement with Xianning Xiangtian Energy Holdings Group Co., Ltd to acquire 40 % of the equity interests in the company, with total consideration of $ 13.62 million, which was paid in 2022. The investment was accounted for under the equity method because the Company can exercise significant influence over the company as the investee but does not own a majority of the equity interests in or control the company. As of December 31, 2022, the carrying amount of this equity method investment reflected the Company’s proportionate share of the equity in the investee company. Besides, the Company made an initial investment of $ 2.87 million in return for a limited partner interest in Shandong Ningwei New Energy Technology Co., Ltd. The Company accounted for the investment using the cost method, as the investment did not have a readily determinable fair value in 2022. As of December 31, 2022 and December 31, 2021, the balance of long term investment was $ 16,488,157 and $ 3,136,910 . 12. Investment in real estates As of December 31, 2021, the Company spent $ 7,770,943 to purchase real estates, a commercial complex, for the start-up of the tea trade project, which project has been included in Xianning City government’s 13th Five-Year Development Plan. The Company plans to hold this real estate to earn rentals income.. As the use of those assets changed to self-use, those assets were reclassified from investment to plant and equipment. As of December 31, 2022 and December 31, 2021, the balance of investment in real estates was $ 0 and $ 7,770,943 . 13. Other Payable As of December 31, 2022 and December 31, 2021, the balance of other payable was $ 4,412,833 and $ 8,635,189 . Other payables – third parties are those non-trade payables arising from transactions between the Company and certain third parties. 14. Advance From Customer For our operation, the proceeds received from sales are initially recorded as advances from customers, which was usually related to unsatisfied performance obligations at the end of an applicable reporting period. As of December 31, 2022, and December 31, 2021, the outstanding balance of the Advance from customers was $ 2,624,070 and $, 6,190,091 respectively. Due to the generally short-term duration of the relevant contracts, most of the performance obligations are satisfied in the following reporting period. 15. Related Parties Transaction As of December 31, 2022 and December 31, 2021, the outstanding balance due from related parties was $ 180,578 and $ 7,670,434 , respectively. Significant related parties comprised much of the total outstanding balance as of December 31, 2022 are stated below: As of December 31, 2022 and December 31, 2021, the outstanding balance of $ 127,196 and $ Nil was due from Mr.Chen Xing, the management of the Shandong Yunchu; As of December 31, 2022 and December 31, 2021, the outstanding balance of $ 36,529 and $ Nil was due from Mr.Xiong Haiyan, the management of the Jingshan Sanhe;. As of December 31, 2022 and December 31, 2021,the outstanding balance of $ 16,853 and $ Nil was due from Mr.Lu Jun, the management of the Jingshan Sanhe. These above nontrade receivables arising from transactions between the Company and certain related parties, such as loans to these related parties. These loans are unsecured, non-interest bearing and due on demand. F- 26 As of December 31, 2022 and December 31, 2021, the outstanding balance due to related parties was $ 4,282,841 and $ 5,196,225 , respectively. Significant parties comprised much of the total outstanding balance as of December 31, 2022 are stated below: As of December 31, 2022 and December 31, 2021, the outstanding balance of $ 986,417 and $ 1,077,529 was due to Ms. Yan Yan, the spouse of the legal representative of Jilin Chuangyuan Chemical Co., Ltd; As of December 31, 2022 and December 31, 2021,the outstanding balance of $ Nil and $ 2,093,792 was due to Mr. Su Lei, the executive of Anhui Ansheng Petrochemical Equipment Co., Ltd; on December 12, 2022, Ansheng branch had been disposed of, then the balance between Ansheng branch and Mr. Su Lei had not been recognized in the accompanying consolidated financial statement. As of December 31, 2022 and December 31, 2021, the outstanding balance of $ 1,073,867 and $ 487,054 was due to Mr. Bin Zhou, Chief Executive Officer and Chairman of the Company; As of December 31, 2022 and December 31, 2021, the outstanding balance of $ Nil and $ 352,902 was due to Wuxi Yangchang Chemical Machinery Factory, which has significant influence on Ansheng branch; on December 12, 2022, Ansheng branch had been disposed of, before the disposal of transaction, the balance between Ansheng branch and Wuxi Yangchang Chemical Machinery Factory had been resolved. As of December 31, 2022 and December 31, 2021, the outstanding balance of $ 492 ,204and $ 871,257 was due to a couple of executives of the subsidiaries of the Company; As of December 31, 2022 and December 31, 2021, the outstanding balance of $ 287,167 and $ 313,691 was due to the senior managements of Jilin Chuangyuan Chemical Co., Ltd; The balance was advanced for working capital of the Company, non-interest bearing, and unsecured unless further disclosed. 16. Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Company’s acquisitions of interests in its subsidiaries and VIEs. If the carrying amount of the goodwill exceeds its implied fair market value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. The changes in the carrying amount of goodwill by entities are as follows : Ansheng Baokuan Fast JSSH JLCY SDYC Balance as of December 31, 2020 - - 2,340,111 - - - Goodwill acquired 1,026,337 - - 923,313 3,191,897 4,724,698 Goodwill impairment - - ( 2,340,111 ) ( 923,313 ) - - Balance as of December 31, 2021 $ 1,026,337 $ - $ - $ - $ 3,191,897 $ 4,724,698 Goodwill acquired $ - $ 7,193,965 $ - $ - $ - $ - Goodwill impairment ( 7,193,965 ) - - ( 3,191,897 ) - Disposal of subsidiaries ( 1,026,337 ) - - - - - Balance as of December 31, 2022 - - - - - 4,724,698 F- 27 17. Bank Loans The outstanding balances on short-term bank loans consisted of the following: Lender Maturities Weighted average interest rate 12/31/2022 12/31/2021 Rural Credit Cooperatives of Jilin Province, Jilin Branch Due in November 2023 7.83 % 3,589,582 3,921,138 Loan from Anhui Langxi Rural Commercial Bank Of China Due in December 2021 3.85 % - 2,900,916 Buildings and land use rights in the amount of $ 10,178,520 are used as collateral for Jiling Branch. The short-term bank loan which is denominated in Renminbi was primarily obtained for general working capital. Interest expense for the year ended December 31, 2022 and 2021 was $ 291,032 and $ 283,712 respectively. 18. Equity On May 9, 2019, the Company and its wholly owned subsidiary Shanghai Xunyang Internet Technology Co., Ltd. (“Subsidiary”) entered into a Share Exchange Agreement with Xianning Bozhuang Tea Products Co., Ltd. (“Target”) and each of the shareholders of Target (collectively, “Sellers”). Such transaction closed on May 14, 2019. Under the Share Exchange Agreement, the Subsidiary acquired all outstanding equity interests of Target, a company that produces tea products and sells such products in China. Pursuant to the Share Exchange Agreement, the Company 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 the Target to the Subsidiary. On June 17, 2019, the Company entered into a securities purchase agreement, under 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 June 19, 2019. On February 10, 2020, the Company entered into a securities purchase agreement with Mengru Xu and Zhichao Du, according to which Ms. Xu and Mr. Du agreed to invest an aggregate of $ 3.51 million in the Company in exchange for an aggregate of 1,350,000 shares of common stock, representing a purchase price of approximately $ 2.60 per share. On February 28, 2020, the Company closed the transaction. On June 5, 2020, the Company issued an aggregate of 1,800,000 shares of its common stock to acquire all the outstanding equity interest of Fast Approach Inc., a corporation incorporated under the laws of Canada and in the business of operating a demand side platform targeting the Chinese education market in North America. On December 30, 2020, the Company issued a total of 782,165 ordinary shares to six employees of the Company. Total fair value of these ordinary shares was approximately $ 1.75 million and the compensation expenses are to be recognized in the fiscal year 2020 because there is no employee’s requisite service period requirement. F- 28 On January 4, 2021, the Company issued an aggregate of 2,200,000 shares of its common stock to the original shareholders of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd in exchange for the transfer of 85 % of the equity interests of Jingshan Sanhe Luckysky New Energy Technologies Co., Ltd to the Company. On January 26, 2021, the Company entered into a Securities Purchase Agreement, pursuant to which three individuals residing in the People’s Republic of China agreed to purchase an aggregate of 2,700,000 shares of the Company’s common stock, par value $ 0.001 per share, for an aggregate purchase price of $ 6,750,000 , representing a purchase price of $ 2.50 per Share. On March 9, 2021, the Company issued an aggregate of 3,300,000 shares of common stock of the Company to the original shareholder of Jilin Chuangyuan Chemical Co., Ltd in exchange for the transfer of 75 % of the equity interest of Jilin Chuangyuan Chemical Co., Ltd to the Company. On April 26, 2021, the Company has entered into a Share Purchase Agreement with three investors, Pursuant to the agreement, the Company will receive gross proceeds of $ 7,600,000 in the aggregate, in exchange for the issuance of an aggregate of 4,000,000 shares of the Company’s common stock, representing a purchase price of approximately $ 1.90 per share. On July 15, 2021, the Company has issued an aggregate of 4,800,000 shares of common stock of the Company to the equity holders of Anhui Ansheng Petrochemical Equipment Co., Ltd in exchange for the transfer of 66 % of the equity interest of Anhui Ansheng Petrochemical Equipment Co., Ltd to the Company. On July 30, 2021, the Company issued a total of 872,000 ordinary shares to seven employees of the Company. Total fair value of these common shares was approximately $ 1.16 million. The compensation expenses are to be recognized in the fiscal year 2021 because there is no employee’s requisite service period requirement. On December 30, 2021, The Company issued an aggregate of 5,900,000 shares of common stock to the equity holders of A Shandong Yunchu Supply Chain Co., Ltd for the transfer to 100 % of the equity interest of Shandong Yunchu Supply Chain Co., Ltd to the Jiayi Technologies (Xianning) Co., Ltd. On January 13, 2022, the Company entered into a Securities Purchase Agreement, pursuant to which three individuals residing in the People’s Republic of China agreed to purchase an aggregate of 7,000,000 shares of the Company’s common stock, par value $ 0.001 per share, for an aggregate purchase price of $ 7,000,000 , representing a purchase price of $ 1.00 per Share. On April 8, 2022, Planet Green Holdings Corporation (Nevada) issued an aggregate of 7,500,000 shares of common stock to the equity holders of Allinyson Ltd. for the acquisition of 100 % of the equity interest of Allinyson Ltd. On May 19, 2022, the Company entered into a Securities Purchase Agreement, pursuant to which two investors agreed to purchase an aggregate of 10,000,000 shares of the Company’s common stock, par value $ 0.001 per share, for an aggregate purchase price of $ 4,100,000 , representing a purchase price of $ 0.41 per Share. On July 20, 2022, the Company acquired 30 % equity interest of the Xianning Xiangtian Energy Holdings Group Co., Ltd. and the Company issued 12,000,000 shares of common stock to the Sellers. As of December 31, 2022, there were 72,081,930 shares of common stock outstanding. 19. Income Taxes United States On December 22, 2017, the “Tax Cuts and Jobs Act” (the “Act”) was enacted. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34 % to 21 %. As the Company has a December 31 fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of 21 % for the Company’s fiscal year ending December 31, 2022 and 2021, respectively. Accordingly, the Company has remeasured the Company’s deferred tax assets on net operating loss carryforwards (“NOLs”) in the U.S at the lower enacted cooperated tax rate of 21 %. However, this remeasurement has no effect on the Company’s income tax expenses as the Company has provided a 100 % valuation allowance on its deferred tax assets previously. F- 29 Additionally, the Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused the Company to remeasure all U.S. deferred income tax assets and liabilities for temporary differences and NOLs and recorded one time income tax payable to be paid in 8 years. However, this one-time transition tax has no effect on the Company’s income tax expenses as the Company has no undistributed foreign earnings prior to December 31, 2022 which the Company has foreign cumulative losses at December 31, 2022. British Virgin Islands Planet Green Holdings Corporation BVI is incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong Lucky Sky Planet Green Holdings Co., Limited (H.K.) is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5 % in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, Lucky Sky Planet Green Holdings Co., Limited (H.K.) is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. PRC The Company PRC subsidiaries and VIEs and their controlled entities are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC, Chinese enterprises are subject to income tax at a rate of 25 % after appropriate tax adjustments. Significant components of the income tax expense consisted of the following for the years ended December 31, 2022 and 2021: 12/31/2022 12/31/2021 Loss attributed to PRC operations $ ( 2,778,634 ) $ ( 5,540,404 ) Loss attributed to U.S. operations ( 12,212,918 ) ( 1,753,427 ) Loss attributed to Canada operations ( 276,423 ) ( 2,640,821 ) Income attributed to BVI - Loss before tax $ ( 15,267,975 ) $ ( 9,934,652 ) PRC Statutory Tax at 25 % Rate ( 694,659 ) ( 1,385,101 ) Effect of tax exemption granted Valuation allowance 2,169,828 1,441,551 Income tax $ 1,475,169 $ 56,450 Per Share Effect of Tax Exemption Effect of tax exemption granted $ - $ - Weighted-Average Shares Outstanding Basic 59,502,478 24,778,588 Per share effect $ - $ - The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740. F- 30 Reconciliation of effective income tax rate from continuing operations is as follows for the years ended December 31, 2022 and 2021: 12/31/2022 12/31/2021 U.S. federal statutory income tax rate 21 % 21 % Higher (lower) rates in PRC, net 4 % 4 % Non-recognized deferred tax benefits in the PRC ( 25.10 )% ( 25.57 )% The Company’s effective tax rate ( 0.10 )% ( 0.57 )% 20. Earnings/(Loss) Per Share Components of basic and diluted earnings per share were as follows: For the years ended December 31, 2022 2021 Loss from operations attributable to common stockholders $(25,80 8,418) $ ( 9,740,486 ) Basic and diluted (loss) earnings per share denominator: Original Shares at the beginning: 35,581,930 11,809,930 Additions from Actual Events -issuance of common stock for cash 5,506,849 2,926,027 Additions from Actual Events – issuance of common stock for acquisition 12,989,041 9,672,329 Additions from Actual Events – issuance of common stock for stock compensation - 370,302 Additions from Actual Events –issuance of shares for long-term investment 5,424,658 - Basic Weighted Average Shares Outstanding 59,502,478 24,778,588 (Loss) income per share from continuing operations - Basic and diluted $ ( 0.28 ) $ ( 0.40 ) (Loss) income per share from discontinued operations-Basic and diluted $ ( 0.15 ) $ - (Loss) income per common shareholders - Basic and diluted $ ( 0.43 ) $ ( 0.39 ) Basic and diluted weighted average shares outstanding 59,502,478 24,778,588 21. Concentrations Customers Concentrations : The following table sets forth information about each customer that accounted for 10 % or more of the Company’s revenues for the years ended December 31, 2022 and 2021. For the years ended Customers 31-Dec-22 31-Dec-21 Amount $ % Amount $ % A - - 1,603,947 15 B - - 1,558,075 15 C - - 1,294,587 12 Suppliers Concentrations The following table sets forth information about each supplier that accounted for 10 % or more of the Company’s purchase for the years ended December 31, 2022 and 2021. For the years ended Suppliers 31-Dec-22 31-Dec-21 Amount $ % Amount $ % A 8,512,372 23 830,263 14 B 6,996,696 19 - - C 6,297,657 17 - - F- 31 22. Lease commitment Effective December 31, 2018, the Company adopted ASU 2016-02, “Leases” (Topic 842), and elected the package of practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. The Company adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. The Company had a land, facilities and factory lease agreement with a 5-year lease term starting in April 2018 until April 2023. Upon adoption of ASU 2016-02, the Company recognized lease liabilities of approximately $ 0 and $ 0.82 million respectively as of December 31,2022 and 2021, with corresponding Right-of-Use (ROU) assets of the same amount based on the present value of the future minimum rental payments of the new lease, using an effective interest rate of 4.75 %, which is determined using an incremental borrowing rate. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. For the twelve months ended December 31, 2022and 2021, rent expenses amounted to $ 424 ,241and $ 442,297 respectively. The weighted average remaining lease term of its existing leases is 0.33 years. For operating leases with a lease term of less than one year , the enterprise no longer recognizes lease liabilities and Right-of-Use (ROU) assets, and the lease expense is amortized according to the straight-line method. 23. Risks A. Credit risk The Company’s deposits are made with banks located in the PRC. They do not carry federal deposit insurance and may be subject to loss of the banks become insolvent. Since the Company’s inception, the age of account receivables has been less than one year, indicating that the Company is subject to the minimal risk borne from credit extended to customers. B. Interest risk The Company is subject to interest rate risk when short-term loans become due and require refinancing. C. Economic and political risks The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC. 24. Contingencies In November 2021, the claim occurred between Ansheng and Beijing Aerospace Star Technology Co., Ltd due to the dispute over the commercial contracts. On November 16, 2021, Beijing Aerospace Star Technology Co., Ltd applied for pre-litigation custody of property preservation with the local people’s Court of Langxi County, freezing Ansheng’s available cash of $ 229,120 before filing the action. The liabilities amounts have been accrued in consolidated financial statements for the year ended December 31, 2021. As of December 31, 2021, the loan from Anhui Langxi Rural Commercial Bank Of China was overdue and the Company proposed to extend maturities on this loan. The Plaintiff(Wuxi Suxin Natural Gas Utilization Co., Ltd.) sued for that the defendants (Anhui Xuanneng Natural Gas Energy Equipment Co., Ltd, Anhui Ansheng Petrochemical Equipment Co., Ltd and other related individuals) have damaged the interest of creditors and the defendant should restitute the plaintiff’s mortgage loan principal as well as the interest. The case has now been transferred to the Changfeng County Court of Anhui Province for processing. Meanwhile, due to the impact of this case, Ansheng Company’s available cash of $ 151,630 was temporarily frozen by the court. There was a few solid evidence proves that Anhui Ansheng Petrochemical Equipment Co., Ltd. and Anhui Xuanneng Natural Gas Energy Equipment Co., Ltd. are independent entities, management believes the possibility of unfavorable outcome occur is remote and there was not any negative or any contingency impact on the 2021 Financial statements. As of December 31, 2022, all above issues have been resolved, and no negative impact on the accompanying consolidated financial statement. 25. Subsequent Events The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the dates of the balance sheets, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The Company has analyzed its operations subsequent to December 31, 2022 to the date these audited consolidated financial statements were issued, and has determined that it does not have any material events to disclose. F-32