Attached files
file | filename |
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EX-99.2 - EXHIBIT 99.2 - Planet Green Holdings Corp. | exhibit99-2.htm |
8-K/A - FORM 8-K/A - Planet Green Holdings Corp. | form8ka.htm |
Planet Green Holding Corp.
Proforma Combined Financial
Statements
September 30, 2018
Contents | Page |
Proforma Combined Balance Sheets | 2-3 |
Proforma Combined Statements of Operations and Comprehensive Loss | 4 |
Notes to Consolidated Financial Statements | 5-9 |
Planet Green Holding Corp.
Proforma Combined
Balance Sheet
As of September 30, 2018
PLAG | Taishan | Adjustments | Combined | |||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 90,488 | $ | 18,867 | $ | - | $ | 109,355 | ||||
Restricted cash | 436,902 | - | - | 436,902 | ||||||||
Short-term investments | 3,815,541 | - | 3,815,541 | |||||||||
Trade receivables, net | 1,151,593 | 371,342 | - | 1,522,935 | ||||||||
Inventories | 6,428,822 | 20,049 | - | 6,448,871 | ||||||||
Advances and prepayments to suppliers | 432,143 | 16,133 | - | 448,276 | ||||||||
Other receivables and other current assets | 2,769,838 | 1,471 | - | 2,771,309 | ||||||||
Related party receivable | 1,511,508 | 41,006 | - | 1,552,514 | ||||||||
Prepaid taxes | 406,651 | - | - | 406,651 | ||||||||
Total current assets | $ | 17,043,486 | $ | 468,868 | $ | - | $ | 17,512,354 | ||||
Non-current assets | ||||||||||||
Investments | 6,891,240 | - | - | 6,891,240 | ||||||||
Plant and equipment, net | 7,141,938 | 1,664,899 | - | 8,806,837 | ||||||||
Intangible assets, net | 894,000 | - | 894,000 | |||||||||
Construction in progress, net | 415,065 | 847,662 | 1,262,727 | |||||||||
Total Assets | $ | 32,385,729 | $ | 2,981,429 | $ | - | $ | 35,367,158 | ||||
Liabilities and Stockholders Equity | ||||||||||||
Current liabilities | ||||||||||||
Short-term loans | $ | 5,047,110 | $ | - | $ | 5,047,110 | ||||||
Accounts payable | 1,128,187 | 771,180 | - | 1,899,367 | ||||||||
Taxes payable | 75,315 | 12 | - | 75,327 | ||||||||
Other payable | 2,082,571 | 46,593 | - | 2,129,164 | ||||||||
Related party payable | - | 7,029 | - | 7,029 | ||||||||
Accrued liabilities | 578,714 | - | - | 578,714 | ||||||||
Customer deposits | 413,392 | 3,504 | - | 416,896 | ||||||||
Total current liabilities | $ | 9,325,289 | $ | 828,318 | - | $ | 10,153,607 | |||||
Total Liabilities | $ | 9,325,289 | $ | 828,318 | - | $ | 10,153,607 | |||||
Commitments and Contingencies |
See Accompanying Notes to the Financial Statements
2
Planet Green Holding Corp.
Proforma Combined
Balance Sheet
As of September 30, 2018
PLAG | Taishan | Adjustments | Combined | |||||||||
Stockholders Equity Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | $ | - | $ | - | $ | - | $ | - | ||||
Common Stock, $0.001 par value, 200,000,000 shares authorized; 3,143,141 and 1,530,980 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | $ | 3,143 | $ | - | $ | - | $ | 3,143 | ||||
Registered capital | - | 1,913,049 | (1,913,049 | ) | - | |||||||
Additional paid-in capital | 62,556,571 | - | 2,268,315 | 64,824,886 | ||||||||
Statutory reserves | 2,810,953 | - | - | 2,810,953 | ||||||||
Retained earnings/(accumulated deficit) | (52,905,390 | ) | 355,266 | (355,266 | ) | (52,905,390 | ) | |||||
Accumulated other comprehensive income | 8,003,113 | (115,204 | ) | 7,887,909 | ||||||||
Non-controlling interests | 2,592,050 | - | - | 2,592,050 | ||||||||
Total Stockholders Equity | $ | 23,060,440 | $ | 2,153,111 | $ | - | $ | 25,213,551 | ||||
Total Liabilities and Stockholders Equity | $ | 32,385,729 | $ | 2,981,429 | $ | - | $ | 35,367,158 |
See Accompanying Notes to the Financial Statements
3
Planet Green Holding Corp.
Proforma Combined
Statement of Operations and Comprehensive Loss
For the nine-month
period ended September 30, 2018
PLAG | Taishan | Adjustments | Combined | |||||||||
Net revenues | $ | 2,461,448 | $ | 1,225,775 | $ | - | $ | 3,687,223 | ||||
Cost of revenues | 1,617,308 | 502,449 | - | 2,119,757 | ||||||||
Gross profit | 844,140 | 723,326 | - | 1,567,466 | ||||||||
Operating expenses: | ||||||||||||
Selling and marketing expenses | 61,945 | 62 | 62,007 | |||||||||
General and administrative expenses | 1,483,803 | 199,005 | - | 1,682,808 | ||||||||
Total operating expenses | 1,545,748 | 199,067 | - | 1,744,815 | ||||||||
Operating loss | (701,608 | ) | 524,259 | - | (177,349 | ) | ||||||
Other income (expenses): | ||||||||||||
Interest income | 245 | 181 | - | 426 | ||||||||
Interest expense | (713,409 | ) | - | - | (713,409 | ) | ||||||
Other income | 9,089 | - | - | 9,089 | ||||||||
Other expenses | (8,634,106 | ) | (61 | ) | - | (8,634,167 | ) | |||||
Gain (loss) from investment | 56,714,094 | - | - | 56,714,094 | ||||||||
Total other income and (expenses) | 47,375,913 | 120 | - | 47,376,033 | ||||||||
Loss before taxes from operations | 46,674,305 | 524,379 | - | 47,198,684 | ||||||||
Provision for income taxes | (49,755 | ) | - | - | (49,755 | ) | ||||||
Net loss | $ | 46,724,060 | $ | 524,379 | $ | - | $ | 47,248,439 | ||||
Other comprehensive income: | ||||||||||||
Foreign currency translation income | (5,700,817 | ) | (118,596 | ) | - | (5,819,413 | ) | |||||
Comprehensive loss | $ | 41,023,243 | $ | 405,782 | $ | - | $ | 41,429,026 | ||||
Loss per share: | ||||||||||||
Basic and diluted loss per share | $ | 20.62 | ||||||||||
Basic and diluted weighted average shares outstanding | 2,291,075 |
See Accompanying Notes to the Financial Statements
4
Planet Green Holding Corp.
Notes to Proforma
Combined Financial Statements
1. |
Organization and Principal Activities |
Planet Green Holdings Corp., formerly known as American Lorain Corporation, (the Company or PLAG) is registered as a corporation in the state of Nevada. The Company conducts its primary business activities through its subsidiaries located in the Peoples Republic of China, including its new acquired operating subsidiary Taishan Muren Agriculture Co. Ltd. Those subsidiaries grow, develop, manufacture, and market fresh foods and spices, convenience foods, chestnut products, and frozen foods. | |
2. |
Summary of Significant Accounting Policies |
Basis of presentation | |
These proforma combined financial statements, accompanying notes, and related disclosures have been prepared on an as-if basis assuming that the reverse takeover transaction between the Company and Taishan Muren Agriculture Co. Ltd. (Taishan) has been in effect since the beginning of the period present in the results of operations by combining the historical financial statements of the entities and eliminating any intercompany balances. Goodwill would not be recognized in this transaction, and the carrying values of the Company and Taishan are their respective historical values. Actual results combined results may have differed from those presented herein. | |
These financial statements have been prepared using the accrual basis of accounting in accordance with the generally accepted accounting principles ("GAAP") in the United States; the Company maintains its general ledger and journals with the accrual method accounting. The Companys fiscal year end is December 31 and the financial statements are presented in US dollars. | |
Basis of proforma combined financial statements | |
These proforma combined financial statements include the accounts of the Company and the entities listed below. All intercompany accounts and transactions have been eliminated. |
Attributable | ||||
Place of | equity | Registered | ||
Name of Company | incorporation | interest % | capital | |
Planet Green Holdings Corporation | British Virgin Islands | 100 | $ 10,000 | |
JianShi Technology Holding Limited | Hong Kong | 100 | 1,277 | |
Shanghai Xunyang Internet Technology Co. Ltd. | PRC | 100 | 669,919 | |
Beijing Lorain Co., Ltd. | PRC | VIE | 1,540,666 | |
Luotian Lorain Co., Ltd. | PRC | VIE | 3,797,774 | |
Shandong Greenpia Foodstuff Co., Ltd. | PRC | VIE | 2,303,063 | |
Taishan Muren Agriculture Co. Ltd. | PRC | VIE | 1,913,049 | |
Lorain Foodstuff (Shenzhen) Co., Ltd. | PRC | VIE | 500,000 |
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 (Planet Green BVI), 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. The formation and acquisition of these companies was to implement the Companys restructuring plans.
5
Planet Green Holding Corp.
Notes to Proforma
Combined Financial Statements
On September 28, 2018, the Company was restructured by disposing its equity interest in International Lorain and its subsidiaries to the former Chairman, Mr. Si Chen, and re-acquiring certain equity interest in subsidiaries; namely, Shandong Greenpia, Beijing Lorain, and Luotian Lorain, indirectly through Planet Green BVI. Please refer to Form 8-K filed on October 2, 2018.
The Company entered into exclusive arrangements with Shandong Greenpia, Luotian Lorain, Taishan Muren, and Shenzhen Lorain and its shareholders that give the Company the ability to substantially influence its daily operations and financial affairs. The Company entered into exclusive arrangements with Beijing Lorain; however, the Company does not exercise significant influence over Beijing Lorain; therefore, it is accounted for as an equity method investment. The Company is the primary beneficiary of Shandong Greenpia, Luotian Lorain, Taishan Muren, and Shenzhen Lorain; therefore, it consolidates their accounts as VIE.
Consolidation of Variable Interest Entity
VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. Any VIE with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. Management makes ongoing reassessments of whether the Company is the primary beneficiary of Shenzhen Lorain.
On December 14, 2017, the Company formed Shenzhen Lorain as a limited company under the laws of the PRC. Through Shandong Greenpia, the Company entered into exclusive arrangements with Shenzhen Lorain and its shareholders that give the Company the ability to substantially influence Shenzhen Lorains daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of Shenzhen Lorain and it consolidates its accounts as VIE. The Companys arrangements with Shenzhen Lorain consist of the following agreements:
a. |
Consultation and Service Agreement, dated December 14, 2017. Under this agreement entered into between Shandong Greenpia Foodstuff Co., Ltd. and Lorain Foodstuff (Shenzhen) Co., Ltd. | |
b. |
Business Cooperation Agreement, dated December 14, 2017. Under this agreement entered into between Shandong Greenpia Foodstuff Co., Ltd. and Lorain Foodstuff (Shenzhen) Co., Ltd. | |
c. |
Equity Pledge Agreement, dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. | |
d. |
Equity Option Agreement, dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. | |
e. |
Voting Rights Proxy and Financial Supporting Agreement dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. |
On September 27, 2018, the above agreements were terminated due to the Companys restructuring and Shenzhen Lorain was no longer a variable interest entity under Shandong Greenpia.
6
Planet Green Holding Corp.
Notes to Proforma
Combined Financial Statements
On September 27, 2018, through Shanghai Xunyang Internet Technology Co. Ltd., the Company entered into exclusive arrangements with Beijing Lorain Co., Ltd., Luotian Lorain Co., Ltd., Shandong Greenpia Foodstuff Co., Ltd., Taishan Muren Agriculture Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. and its shareholders that give the Company the ability to substantially influence Shenzhen Lorains daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of these companies and it consolidates its accounts as a VIE. The Companys arrangements with Beijing Lorain Co., Ltd., Luotian Lorain Co., Ltd., Shandong Greenpia Foodstuff Co., Ltd., Taishan Muren Agriculture Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. consist of the following agreements:
a. |
Consultation and Service Agreement, dated September 27, 2018. Under this agreement entered into between Shanghai Xunyang Internet Technology Co. Ltd. and each respective entity; namely, Beijing Lorain Co., Ltd., Luotian Lorain Co., Ltd., Shandong Greenpia Foodstuff Co., Ltd., Taishan Muren Agriculture Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. | |
b. |
Business Cooperation Agreement, dated September 27, 2018. Under this agreement entered into between Shanghai Xunyang Internet Technology Co. Ltd. and each respective entity; namely, Beijing Lorain Co., Ltd., Luotian Lorain Co., Ltd., Shandong Greenpia Foodstuff Co., Ltd., Taishan Muren Agriculture Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. | |
c. |
Equity Pledge Agreement, dated September 27, 2018. Under this agreement entered into between International Lorain Holding, Inc., Shanghai Xunyang Internet Technology Co. Ltd., and Beijing Lorain Co., Ltd. | |
d. |
Equity Pledge Agreement, dated September 27, 2018. Under this agreement entered into between International Lorain Holding, Inc., Shanghai Xunyang Internet Technology Co. Ltd., and Luotian Lorain Co., Ltd. | |
e. |
Equity Pledge Agreement, dated September 27, 2018. Under this agreement entered into between International Lorain Holding, Inc., Shanghai Xunyang Internet Technology Co. Ltd., and Shandong Greenpia Foodstuff Co. | |
f. |
Equity Pledge Agreement, dated September 27, 2018. Under this agreement entered into between Shenzhen Jiamingrui Xinnong Co., Ltd., Shanghai Xunyang Internet Technology Co. Ltd., and Taishan Muren Agriculture Co. Ltd. | |
g. |
Equity Pledge Agreement, dated September 27, 2018. Under this agreement entered into between Mingyue Cai, Shanghai Xunyang Internet Technology Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. | |
h. |
Equity Option Agreement, dated September 27, 2018. Under this agreement entered into between International Lorain Holding, Inc., Shanghai Xunyang Internet Technology Co. Ltd., and Beijing Lorain Co., Ltd. | |
i. |
Equity Option Agreement, dated September 27, 2018. Under this agreement entered into between International Lorain Holding, Inc., Shanghai Xunyang Internet Technology Co. Ltd., and Luotian Lorain Co., Ltd. | |
j. |
Equity Option Agreement, dated September 27, 2018. Under this agreement entered into between International Lorain Holding, Inc., Shanghai Xunyang Internet Technology Co. Ltd., and Shandong Greenpia Foodstuff Co. | |
k. |
Equity Option Agreement, dated September 27, 2018. Under this agreement entered into between Shenzhen Jiamingrui Xinnong Co., Ltd., Shanghai Xunyang Internet Technology Co. Ltd., and Taishan Muren Agriculture Co. Ltd. | |
l. |
Equity Option Agreement, dated September 27, 2018. Under this agreement entered into between Mingyue Cai, Shanghai Xunyang Internet Technology Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. | |
m. |
Voting Rights Proxy and Financial Supporting Agreement dated September 27, 2018. Under this agreement entered into between International Lorain Holding, Inc., Shanghai Xunyang Internet Technology Co. Ltd., and Beijing Lorain Co., Ltd. | |
n. |
Voting Rights Proxy and Financial Supporting Agreement dated September 27, 2018. Under this agreement entered into between International Lorain Holding, Inc., Shanghai Xunyang Internet Technology Co. Ltd., and Luotian Lorain Co., Ltd. | |
o. |
Voting Rights Proxy and Financial Supporting Agreement dated September 27, 2018. Under this agreement entered into between International Lorain Holding, Inc., Shanghai Xunyang Internet Technology Co. Ltd., and Shandong Greenpia Foodstuff Co. | |
p. |
Voting Rights Proxy and Financial Supporting Agreement dated September 27, 2018. Under this agreement entered into between Shenzhen Jiamingrui Xinnong Co., Ltd., Shanghai Xunyang Internet Technology Co. Ltd., and Taishan Muren Agriculture Co. Ltd. |
7
Planet Green Holding Corp.
Notes to Proforma
Combined Financial Statements
q. |
Voting Rights Proxy and Financial Supporting Agreement dated September 27, 2018. Under this agreement entered into between Mingyue Cai, Shanghai Xunyang Internet Technology Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. |
As of September 30, 2018, the following entities were de-consolidated from the structure as a result of the sale agreement executed on September 28, 2018:
Place of | Attributable equity | Registered | ||
Name of Company | incorporation | interest % | capital | |
International Lorain Holding Inc. | Cayman Islands | 100.0 | $ 46,659,135 | |
Junan Hongrun Foodstuff Co., Ltd. | PRC | 100.0 | 44,861,741 | |
Shandong Lorain Co., Ltd. | PRC | 80.2 | 12,123,985 | |
Dongguan Lorain Co., Ltd. | PRC | 100.0 | 149,939 |
Use of estimates
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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 at the time the estimates are made; however, actual results could differ materially from those estimates.
Foreign currency translation and re-measurement
The Company translates its foreign operations to the U.S. dollar in accordance with ASC 830, Foreign Currency Matters.
The reporting currency for the Company and its subsidiaries is the US dollar. The Company and Planet Green Holdings Corporations functional currency is the U.S. dollar. JianShi Technology Holding Limited, Shanghai Xunyang Internet Technology Co. Ltd., Beijing Lorain Co., Ltd., Luotian Lorain Co., Ltd., Shandong Greenpia Foodstuff Co., Ltd., Taishan Muren Agriculture Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. use the Chinese Renminbi (RMB) as their functional currency.
The Company's subsidiaries, whose records are not maintained in that company's functional currency, re-measure their records into their functional currency as follows:
• | Monetary assets and liabilities at exchange rates in effect at the end of each period | |
• | Nonmonetary assets and liabilities at historical rates | |
• | Revenue and expense items at the average rate of exchange prevailing during the period |
Gains and losses from these re-measurements were not significant and have been included in the Company's results of operations.
The Company's subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows:
• | Assets and liabilities at the rate of exchange in effect at the balance sheet date | |
• | Equities at the historical rate | |
• | Revenue and expense items at the average rate of exchange prevailing during the period |
Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders equity.
8
Planet Green Holding Corp.
Notes to Proforma
Combined Financial Statements
9/30/2018 | |
Period-end RMB: US$ exchange rate | 6.8665 |
Period average RMB: US$ exchange rate | 6.5137 |
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation. | |
3. |
Proforma Adjustments |
Entry No. | Description | Dr. | Cr. | |||
1 | Additional paid in capital | 2,268,315 | ||||
Registered capital | 1,913,049 | |||||
Retained earnings | 355,266 |
Issuance of shares under share exchange agreement and recapitalization of the Company
9