Planet Green Holdings Corp. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS We are headquartered in Flushing, New York. After a series of acquisitions and dispositions in 2024 and 2023, our primary business, which is carried out by Shandong Yunchu, Jingshan Sanhe, Xianning Bozhuang and Fast Approach Inc, is: ● To import and distributes animal proteins, mainly beef products; ● To sell high-grade synthetic fuel products; ● To sell black tea product cultivation, packaging, and sales; ● Online advertising services. Results of Operations The following discussion should be read in conjunction with the company’s audited consolidated financial statement for the years ended December 31, 2024, and 2023 and related notes to that. Years Ended Increase / Increase / December 31, Decrease Decrease (In Thousands of USD) 2024 2023 ($) (%) Net revenues 6,730 17,660 (10,930 ) (62 ) Cost of revenues 5,968 16,076 (10,108 ) (63 ) Gross profit 762 1,584 (822 ) (52 ) Operating expenses: Selling and marketing expenses 41 95 (54 ) (57 ) General and administrative expenses 7,328 7,997 (669 ) (8 ) Research & Developing expenses 57 55 2 4 Operating loss (6,664 ) (6,563 ) (101 ) 2 Interest expense (70 ) (10 ) (60 ) 600 Other income (expense) (724 ) (194 ) (530 ) 273 Share of losses from equity method investments - (569 ) 569 (100 ) Loss on disposal of equity investments - (10,849 ) 10,849 (100 ) Loss before tax (7,458 ) (18,185 ) 10,727 (59 ) Income tax expense - (35 ) 35 (100 ) Loss from continuing operations (7,458 ) (18,220 ) 10,762 (59 ) Net income (loss) from discontinuing operations 128 (2,624 ) 2,752 (105 ) Net loss (7,330 ) (20,844 ) 13,514 (65 ) Net Revenues . Our net revenues for the fiscal year ending on December 31, 2024 amounted to $6.73 million, reflecting a decline of approximately $10.93 million or 62% compared to the previous year’s figure of $17.66 million (ending on December 31, 2023). In the previous fiscal year, 50% of our total revenue was generated from the sale of a diverse range of food products to restaurants. However, this segment has been significantly impacted by the adverse effects of COVID-19, leading to a decline in sales from $14.32 million in 2023 to $2.04 million in 2024. Cost of Revenues . During the year ended December 31, 2024, we experienced a decrease in cost of revenue of $10.11 million or 63%, in comparison to the year ended December 31, 2023, from approximately $16.08 million to $5.97 million. This change was mainly due to a decrease in sales of revenue, as discussed above. 18 Gross Profit . Our gross profit declined by $0.82 million, representing a decrease of 52% to $0.76 million for the fiscal year ended December 31, 2024 compared to $1.58 million for the fiscal year ended December 31, 2023. This decline can be primarily attributed to the decrease in sales revenue, and partially offset by a slight decrease in the average combined cost per unit of our products. The gross profit margin increased from 9.0% in 2023 to 11.3% in 2024, representing an increase of 2.3%, primarily attributed to change in product mix. Operating Expenses Selling and Marketing Expenses. Our selling and marketing expenses decreased by $0.05 million, or 57%, to $0.04 million for the year ended December 31, 2024 from $0.09 million for the year ended December 31, 2023, mainly due to the decrease in transportation and storage cost, as well as decline in the sales staff salaries. General and Administrative Expenses. Our general and administrative expenses for the year ended December 31, 2024 decreased by $0.67 million, to $7.33 million compared to the previous year’s $8.00 million, mainly due to loss in the amount of $1.97 million recognized for obsolete tea products during the year ended December 31, 2023, and partially offset by increase in allowance for doubtful accounts and impairment of long-term investments during the year ended December 31, 2024. Net Loss Our net loss decreased by $13.51 million, or 65%, to a net loss of $7.33 million for the year ended December 31, 2024 from $20.84 million in net loss for the year ended December 31, 2023. This decrease was mainly due to the decrease in loss on the disposal of certain subsidiaries. Liquidity and Capital Resources In assessing our liquidity, we monitor and analyze our cash-on-hand and operating and capital expenditure commitments. Our liquidity needs meet our working capital requirements, operating expenses, and capital expenditure obligations. In the reporting period in the fiscal year 2024, our primary sources of financing have been cash generated from operations and proceeds from bank loans. As of December 31, 2024, we had cash and restricted cash of $195,153 compared to $237,214 as of December 31, 2023. The debt to assets ratio was 54.0% and 54.4% as of December 31, 2024 and December 31, 2023, respectively. We expect to continue to finance our operations and working capital needs in 2024 from cash generated from operations and, if needed, private financings. Suppose available liquidity is insufficient to meet our operating and loan obligations as they come due. In that case, our plans include pursuing alternative financing arrangements or reducing expenditures as necessary to meet our cash requirements. However, there is no assurance that we will raise additional capital or reduce discretionary spending to provide liquidity if needed. We cannot be sure of the availability or terms of any alternative financing arrangements. 19 Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the Company has incurred a net loss from continuing operations of $7,457,193 for the year ended December 31, 2024. As of December 31, 2024, the Company had an accumulated deficit of $148,053,653, a working capital deficit of $6,120,752, its net cash provided by operating activities from continuing operations for the year ended December 31, 2024 was $928,644. 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. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report. Cash Flows Data: For the Years Ended December 31 (In thousands of U.S. dollars) 2024 2023 Net cash flows provided by (used in) operating activities 929 (5,282 ) Net cash flows (used in) provided by investing activities (5 ) 2,471 Net cash flows (used in) provided by financing activities (972 ) 2,888 Operating Activities Net cash provided by operating activities was $0.93 million during the year ended December 31, 2024, compared to $5.28 million used in operating activities during the year ended December 31, 2023. This change was primarily due to the decrease in net loss excluding non-cash expenses, gains and losses of $1.41 million, changes in net operating assets and liabilities of $5.23 million, and partially offset by a decrease in net cash provided by operating activities from discontinued operations of $0.43 million. Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $5,421, compared to $2.47 million provided by investing activities for the same period in 2023. This change is primarily due to a reduction in proceeds from disposal of equity method investments of $2.77 million compared to the year ended December 31, 2023. 20 Financing Activities The net cash used in financing activities was $0.97 million during the year ended December 31, 2024, compared to net cash provided by financing activities of $2.89 million for the same period in 2023. This change can be attributed to a rise in loan to related parties, and partially offset by an increase in bank loans. Critical Accounting Policies The preparation of financial statements in conformity with the United States generally accepted accounting principles requires our management to make assumptions, estimates, and judgments that affect the amounts reported in the financial statements, including the notes to that, and related disclosures of commitments contingencies, if any. We consider our critical accounting policies to require the more significant judgments and estimates in preparing financial statements, including those outlined in Note 2 to the financial statements included herein. The Company has evaluated the timing and the impact of the guidance above on the financial statements. As of December 31, 2024, there were no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company’s consolidated financial statements. Off-Balance Sheet Arrangements We do not have any off-balance arrangements. 21 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA The full text of our audited consolidated financial statements as of December 31, 2024, begins on page F-1 of this annual report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.