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Planet Green Holdings exits chemical venture

Published 12/12/2024, 08:10 am
PLAG
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In a significant shift, Planet Green Holdings Corp. (NYSE American:PLAG) has terminated all agreements with Jilin Chuangyuan Chemical Co., Ltd., effectively dissolving a previous business arrangement. The termination, formalized through a Termination Agreement on Wednesday, severs the financial integration of Jilin Chuangyuan into Planet Green Holdings' accounts. According to InvestingPro data, the company currently operates with weak financial health metrics, including a concerning current ratio of 0.59, indicating potential liquidity challenges.

The original agreements, which included a Business Cooperation Agreement, Consultation and Service Agreement, Equity Option Agreement, Equity Pledge Agreement, and Proxy Agreement, were established on November 30, 2021. These contracts enabled Planet Green Holdings to control and consolidate Jilin Chuangyuan's financial statements for accounting purposes.

The Termination Agreement was executed by Jiayi Technologies (Xianning) Co., Ltd., a wholly-owned subsidiary of Planet Green Holdings, and the shareholders of Jilin Chuangyuan, Xiaodong Cai and Yongshen Chen. With the completion of this transaction, Planet Green Holdings has ceased to consolidate Jilin Chuangyuan's financials into its own, marking a clear departure from the chemical sector covered under the previous agreements.

The move comes as Planet Green Holdings, which operates in the food specialties sector under the SIC code 2030, refocuses its business strategy. The company, based in Flushing, New York, has not provided details regarding the reasons for the termination or any financial implications resulting from this decision. Recent InvestingPro data shows the company facing significant challenges, with a 24.3% revenue decline and negative EBITDA of $6.23 million in the last twelve months. InvestingPro subscribers have access to 11 additional key insights about PLAG's financial position and market performance.

This strategic realignment reflects a change in direction for Planet Green Holdings, which has a history of name changes and business shifts, including a previous identity as American Lorain Corp. The company has been incorporated in Nevada and maintains its fiscal year-end on December 31. With a gross profit margin of just 8.88% and an overall weak financial health score, the company faces significant challenges in its turnaround efforts.

In other recent news, Planet Green Holdings Corp. has disclosed a restatement of its Q2 financial results due to an accounting error related to the disposal of its subsidiary, Allinyson Ltd. The error led to an incorrect recognition of income from discontinued operations, which was instead recorded in additional paid-in capital. The restatement will result in a decrease in income from discontinued operation by $7,407,267, an increase in additional paid-in capital by $7,422,000, a decrease in accumulated deficit by the same amount, and a reduction in accumulated other comprehensive income by $14,733.

Management, in consultation with advisors, has determined that modifications are necessary in their previous assessment of the company's disclosure controls and procedures. These changes will be addressed in the amended Quarterly Report on Form 10-Q/A.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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