Before you decide to purchase our common stock,
you should understand the high degree of risk involved. You should consider carefully the following risks and other information in this
prospectus, including our consolidated financial statements and related notes. If any of the following risks actually occur, our business,
financial condition and operating results could be adversely affected. As a result, the trading price of our common stock could decline,
Risks Related to Our Business and Our Operation
recent coronavirus outbreak could materially and adversely affect our business.
the beginning of 2020, a novel strain of coronavirus (COVID-19) was reported to have surfaced and then caused a pandemic outbreak.
The global outbreak of COVID-19 and related adverse public health developments have had and may continue to have a material
adverse impact upon our normal operating activities, the demand for our end products and our financial performance. Our normal operating
activities were disrupted by the temporary closure of our offices, suspension of business travel, disruptions to our normal working schedules,
various restrictions on our employees’ activities and similar disruptive effects to our normal operations. In addition, the global
spread of COVID-19, and the implementation by governments around the world of measures intended to slow down the spread, have
caused a material reduction in worldwide business activity, resulting in a drop in demand for our products.
have taken measures in response to the outbreak, including the adoption of more stringent workplace sanitation measures. We will continue
to monitor the situation and consider additional measures to protect the health and safety of our employees and to respond to future
developments. At present, domestic COVID-19 is generally under control within China, and vaccines are being administered within
China and abroad. However, the extent to which this outbreak impacts our results will depend on global trends and future developments
of COVID-19, including information which may emerge concerning new variants and other factors which could affect the scope
and severity of the outbreak and the actions needed to contain the outbreak. The long-term impact of the COVID-19 pandemic
on our performance also depends in large part on factors that are not within our control, such as measures implemented by governmental
authorities to address the pandemic, the effect of the pandemic on global and regional economies and the response of world financial
markets. An extended outbreak could depress global economic activity, disrupting our operations, reducing demand for our products and
adversely impacting our financial performance.
results of operations and our ability to operate at a profit are largely dependent on our ability to manage the costs of corn, natural
gas and other production inputs, with the prices of our alcohols and essential ingredients, all of which are subject to volatility and
results of operations are highly impacted by commodity prices, including the cost of corn, natural gas and other production inputs that
we must purchase, and the prices of alcohols and essential ingredients that we sell. Prices and supplies are subject to and determined
by market and other forces over which we have no control, such as weather, domestic and global demand, supply shortages, export prices
and various governmental policies in the United States and throughout the world.
volatility of corn, natural gas and other production inputs, and alcohols and essential ingredients, may cause our results of operations
to fluctuate substantially. We may fail to generate expected levels of net sales and profits even under fixed-price and other contracts
for the sale of specialty alcohols used in consumer products. Our customers may not pay us timely or at all, even under longer-term,
fixed-price contracts for our specialty alcohols, and may seek to renegotiate prices under those contracts during periods of falling
prices or high price volatility.
the past several years, for example, the spread between corn and fuel-grade ethanol prices has fluctuated significantly. Fluctuations
are likely to continue to occur. A sustained narrow spread, whether as a result of sustained high or increased corn prices or sustained
low or decreased alcohol or essential ingredient prices, would adversely affect our results of operations and financial position. Revenues
from sales of alcohols, particularly fuel-grade ethanol, and essential ingredients could decline below the marginal cost of production,
which may force us to further suspend production, particularly fuel-grade ethanol production, at some or all of our facilities.
addition, some of our fuel-grade ethanol marketing activities will likely be unprofitable in a market of generally declining prices due
to the nature of our business. For example, to satisfy customer demands, we maintain certain quantities of fuel-grade ethanol inventory
for subsequent resale. Moreover, we procure much of our fuel-grade ethanol inventory outside of third-party marketing arrangements and
therefore must buy fuel-grade ethanol at a price established at the time of purchase and sell fuel-grade ethanol at an index price established
later at the time of sale that is generally reflective of movements in the market price of fuel-grade ethanol. As a result, our margins
for fuel-grade ethanol sold in these transactions generally decline and may turn negative as the market price of fuel-grade ethanol declines.
industries in which we operate are extremely competitive. Many of our significant competitors have greater production and financial resources
and could use their greater resources to gain market share at our expense.
industries in which we operate are extremely competitive. Many of our significant competitors have substantially greater production and
financial resources than we do. As a result, our competitors may be able to compete more aggressively and sustain that competition over
a longer period of time. Successful competition will require a continued high level of investment in facility maintenance. We may fail
to anticipate or respond adequately to new industry developments and other competitive pressures due to our limited resources relative
to many significant competitors. This failure could reduce our competitiveness and cause a decline in market share, sales and profitability.
Even if sufficient funds are available, we may not be able to make the modifications and improvements necessary to compete successfully.
also face competition from international suppliers, particularly of fuel-grade ethanol, many of whom have cost structures substantially
lower than ours. An increase in domestic or foreign competition could force us to reduce our prices and take other steps to compete effectively,
which could adversely affect our business, financial condition and results of operations.
inflation in China could affect our results of operation if we are unable to pass along raw material price increases to our customers.
in China has been consistently increasing in recent years. Because we purchase raw materials from suppliers in China, price inflation
directly causes an increase in the cost of our raw materials. Price inflation could affect our results of operation if we are unable
to pass along raw material price increases to customers. In addition, if inflationary trends continue in China, China could lose its
competitive advantage as a low-cost manufacturing venue, which could in turn lessen some of the competitive advantages of our being based
in China. Accordingly, inflation in China may weaken our competitiveness domestically or in international markets.
sales and reputation may be affected by product liability claims, litigation or, product recalls in relation to our products.
sale of products for human consumption involves an inherent risk of injury to consumers. We face risks associated with product liability
claims, litigation, or product recalls, if our products cause injury or become adulterated or misbranded. Our products are subject to
product tampering and contamination, such as mold, bacteria, insects, shell fragments and off-flavor contamination, during any of the
procurement, production, transportation and storage processes. If any of our products were to be tampered with, or become tainted in
any of these respects, and we were unable to detect this, our products could be subject to product liability claims or product recalls.
Our ability to sell products could be reduced if certain pesticides, herbicides or other chemicals used by growers have left harmful
residues on portions of our raw materials or if our raw materials have been contaminated by other agents.
have never had any major product recall in the past but we have experienced product liability claims that were made by our customers.
The amounts of such claims were immaterial. However, claims of product defect or product liability for material amounts, individually
or in the aggregate, may be made in the future.
have not procured a product liability or general liability insurance policy for our business, as the insurance industry in China is still
in an early stage of development. To the extent that we suffer a loss of a type which would normally be covered by product liability
or general liability insurance in the United States, we would incur significant expenses in defending any action against us and in paying
any claims that result from a settlement or judgment against us. Product liability claims and product recalls could have a material adverse
effect on the demand for our products and on our business goodwill and reputation. Adverse publicity could result in a loss of consumer
confidence in our products.
expansion strategy may not prove successful and could adversely affect our existing business.
growth strategy includes the expansion of our manufacturing operations, including new production lines and agricultural operations. We
plan to expand our sales in China and internationally. We will need to engage in various forms of promotional and marketing activities
in order to further develop the branding of our products and to increase our market share in new and existing markets. The implementation
of this strategy may involve large transactions and present financial, managerial and operational challenges. We could also experience
financial or other setbacks if any of our growth strategies incur problems of which we are not presently aware. If we fail to generate
sufficient sales in new markets or increase our sales in existing markets, we may not be able to recover the production, distribution,
promotional and marketing expenses, as well as administrative costs we have incurred in developing such markets.
results of operations could be affected by natural events in the locations in which our customers operate.
of our customers have operations in locations that are subject to natural disasters, such as severe weather and geological events, which
could disrupt the operations of those customers and suppliers as well as our operations. If our customers suffer from these events, their
operations may be negatively impacted. As a result, some or all of those customers may reduce their orders for our products, which could
adversely affect our revenue and results of operations.
acquisition of other businesses could pose risks to our profitability.
may try to grow through acquisitions in the future. Any proposed acquisition could result in accounting charges, potentially dilutive
issuances of equity securities, and increased debt and contingent liabilities, any of which could have a material adverse effect on our
existing business and the market price of our common stock. Acquisitions, in general, entail many risks, including risks relating to
the failed integration of the acquired operations, diversion of management’s attention, and the potential loss of key employees
of the acquired organizations. We may be unable to successfully integrate businesses or the personnel of any business that might be acquired
in the future, and our failure to do so could have a material adverse effect on our business and on the market price of our common stock.
products are subject to counterfeiting or imitation, which could impact our reputation.
date, we have experienced limited counterfeiting and imitation of our products. However, counterfeiting or imitation of our products
may occur in the future and we may not be able to detect it and deal with it effectively. Any occurrence of counterfeiting or imitation
could impact negatively upon our reputation, particularly if the counterfeit or imitation products cause sickness, or injury to consumers.
In addition, counterfeit or imitation products could result in our need to incur costs with respect to the detection or prosecution of
face increasing competition from domestic and foreign companies.
food industry in China is fragmented. Our ability to compete against other national and international enterprises is, to a significant
extent, dependent on our ability to distinguish our products from those of our competitors by providing large volumes of high-quality
products that appeal to consumers’ tastes and preferences at reasonable prices. Some of our competitors have been in business longer
than we have and are more established. Our competitors may provide products comparable or superior to those we provide or adapt more
quickly than we do to evolving industry trends or changing market requirements. Increased competition may result in price reductions,
higher raw materials prices, reduced margins and loss of market share, any of which could materially adversely affect our profit margins.
we fail to maintain and grow our client base and spend through our platform, our revenue and business may be negatively impacted.
sustain or increase our revenue, we must regularly add new clients and encourage existing clients to maintain or increase the amount
of advertising inventory purchased through our platform and adopt new features and functionalities that we make available. If competitors
introduce lower cost or differentiated offerings that compete with or are perceived to compete with ours, our ability to sell our services
to new or existing clients could be impaired. We have spent significant effort in cultivating our relationships with advertising agencies,
which has resulted in an increase in the budgets allocated to, and the amount of advertising purchased on, our platform. However, it
is possible that we may reach a point of saturation at which we cannot continue to grow our revenue from such agencies because of internal
limits that advertisers may place on the allocation of their advertising budgets to digital media to a particular provider or otherwise.
We do not typically have exclusive relationships with our clients and there is limited cost to moving their media spend to our competitors.
As a result, we have limited visibility to our future advertising revenue streams. We cannot assure you that our clients will continue
to use our platform or that we will be able to replace, in a timely or effective manner, departing clients with new clients that generate
comparable revenue. If a major client representing a significant portion of our business decides to materially reduce its use of our
platform or to cease using our platform altogether, it is possible that our revenue or revenue growth rate could be significantly reduced,
and our business negatively impacted.
we fail to innovate or make the right investment decisions in our offerings and platform, we may not attract and retain advertisers and
advertising agencies and our revenue and results of operations may decline.
industry is subject to rapid and frequent changes in technology, evolving client needs and the frequent introduction by our competitors
of new and enhanced offerings. We must constantly make investment decisions regarding offerings and technology to meet client demand
and evolving industry standards. We may make bad decisions regarding these investments. If new or existing competitors have more attractive
offerings, we may lose clients or clients may decrease their use of our platform. New client demands, superior competitive offerings
or new industry standards could require us to make unanticipated and costly changes to our platform or business model. In addition, as
we develop and introduce new products and services, including those incorporating or utilizing artificial intelligence and machine learning,
they may raise new, or heighten existing, technological, legal and other challenges, and may cause unintended consequences, may
not function properly or may be misused by our clients. If we fail to adapt to our rapidly changing industry or to evolving client
needs, or we provide new products and services that exacerbate technological, legal or other challenges, demand for our platform could
decrease and our business, financial condition and results of operations may be adversely affected.
market for programmatic buying for advertising campaigns is relatively new and evolving. If this market develops slower or differently
than we expect, our business, growth prospects and financial condition would be adversely affected.
substantial majority of our revenue has been derived from clients that programmatically purchase advertising inventory through our platform.
We expect that spending on programmatic ad buying will continue to be our primary source of revenue for the foreseeable future and that
our revenue growth will largely depend on increasing spend through our platform. The market for programmatic ad buying is an emerging
market, and our current and potential clients may not shift to programmatic ad buying from other buying methods as quickly as we expect,
which would reduce our growth potential. If the market for programmatic ad buying deteriorates or develops more slowly than we expect,
it could reduce demand for our platform, and our business, growth prospects and financial condition would be adversely affected.
addition, our revenue may not necessarily grow at the same rate as spend on our platform. As the market for programmatic buying for advertising
matures, growth in spend may outpace growth in our revenue due to a number of factors, including pricing competition, quantity discounts
and shifts in product, media, client and channel mix. A significant change in revenue as a percentage of spend could reflect an adverse
change in our business and growth prospects. In addition, any such fluctuations, even if they reflect our strategic decisions, could
cause our performance to fall below the expectations of securities analysts and investors, and adversely affect the price of our common
market in which we participate is intensely competitive, and we may not be able to compete successfully with our current or future competitors.
operate in a highly competitive and rapidly changing industry. We expect competition to persist and intensify in the future, which could
harm our ability to increase revenue and maintain profitability. New technologies and methods of buying advertising present a dynamic
competitive challenge, as market participants develop and offer new products and services aimed at capturing advertising spend or disrupting
the digital marketing landscape, such as analytics, automated media buying and exchanges.
may also face competition from new companies entering the market, including large established companies and companies that
we do not yet know about or do not yet exist. If existing or new companies develop, market or resell competitive high-value products or
services that result in additional competition for advertising spend or advertising inventory or if they acquire one of our
existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be
significantly compromised and our results of operations could be harmed.
current and potential competitors may have significantly more financial, technical, marketing, and other resources than we have, which
may allow them to devote greater resources to the development, promotion, sale and support of their products and services. They may also
have more extensive advertiser bases and broader publisher relationships than we have, and may be better positioned to execute on advertising
conducted over certain channels, such as social media, mobile, and video. Some of our competitors may have a longer operating history
and greater name recognition. As a result, these competitors may be better able to respond quickly to new technologies, develop deeper
advertiser relationships or offer services at lower prices. Any of these developments would make it more difficult for us to sell our
platform and could result in increased pricing pressure, increased sales and marketing expense, or the loss of market share.
our access to quality advertising inventory is diminished or fails to expand, our revenue could decline and our growth could be impeded.
must maintain a consistent supply of attractive ad inventory. Our success depends on our ability to secure quality inventory on reasonable
terms across a broad range of advertising networks and exchanges and social media platforms, including video, display, audio and mobile
inventory. The amount, quality and cost of inventory available to us can change at any time. A few inventory suppliers hold a significant
portion of the programmatic inventory either generally or concentrated in a particular channel, such as audio and social media. In addition,
we compete with companies with which we have business relationships. For example, Google is one of our largest advertising inventory
suppliers in addition to being one of our competitors. If Google or any other company with attractive advertising inventory limits our
access to its advertising inventory, our business could be adversely affected. If our relationships with certain of our suppliers were
to cease, or if the material terms of these relationships were to change unfavorably, our business would be negatively impacted. Our
suppliers are generally not bound by long-term contracts. As a result, there is no guarantee that we will have access to a consistent
supply of quality inventory on favorable terms. If we are unable to compete favorably for advertising inventory available on real-time
advertising exchanges, or if real-time advertising exchanges decide not to make their advertising inventory available to us, we may not
be able to place advertisements or find alternative sources of inventory with comparable traffic patterns and consumer demographics in
a timely manner. Furthermore, the inventory that we access through real-time advertising exchanges may be of low quality or misrepresented
to us, despite attempts by us and our suppliers to prevent fraud and conduct quality assurance checks.
suppliers control the bidding process, rules and procedures for the inventory they supply, and their processes may not always work in
our favor. For example, suppliers may place restrictions on the use of their inventory, including prohibiting the placement of advertisements
on behalf of specific advertisers. Through the bidding process, we may not win the right to deliver advertising to the inventory that
is selected through our platform and may not be able to replace inventory that is no longer made available to us.
new types of inventory become available, we will need to expend significant resources to ensure we have access to such new inventory.
For example, although television advertising is a large market, only a very small percentage of it is currently purchased through digital
advertising exchanges. We are investing heavily in our programmatic television offering, including by increasing our workforce and by
adding new features, functions and integrations to our platform.
success depends on consistently adding valued inventory in a cost-effective manner. If we are unable to maintain a consistent supply
of quality inventory for any reason, client retention and loyalty, and our financial condition and results of operations could be harmed.
downturns and market conditions beyond our control could adversely affect our business, financial condition and results of operations.
business depends on the overall demand for advertising and on the economic health of advertisers that benefit from our platform. Economic
downturns or unstable market conditions may cause advertisers to decrease or pause their advertising budgets, which could reduce spend
though our platform and adversely affect our business, financial condition and results of operations. As described above, public health
crises may disrupt the operations of our customers and partners for an unknown period of time, including as a result of travel restrictions
and/or business shutdowns, all of which could negatively impact our business and results of operations, including cash flows. As we explore
new countries to expand our business, economic downturns or unstable market conditions in any of those countries could result in our
investments not yielding the returns we anticipate.
fluctuations in advertising activity could have a negative impact on our revenue, cash flow and results of operations.
revenue, cash flow, results of operations and other key operating and performance metrics may vary from quarter to quarter due to the
seasonal nature of our clients’ spending on advertising campaigns. For example, clients tend to devote more of their advertising
budgets to the fourth calendar quarter to coincide with consumer holiday spending. Moreover, advertising inventory in the fourth quarter
may be more expensive due to increased demand for it. Our historical revenue growth has lessened the impact of seasonality, however,
seasonality could have a more significant impact on our revenue, cash flow and results of operations from period to period if our growth
rate declines, if seasonal spending becomes more pronounced, or if seasonality otherwise differs from our expectations.
to manage our growth effectively could cause our business to suffer and have an adverse effect on our financial condition and results
have experienced and continue to experience significant growth in a short period of time. To manage our growth effectively, we must continually
evaluate and evolve our organization. We must also manage our employees, operations, finances, technology and development and capital
investments efficiently. Our efficiency, productivity and the quality of our platform and client service may be adversely impacted if
we do not train our new personnel, particularly our sales and support personnel, quickly and effectively, or if we fail to appropriately
coordinate across our organization. Additionally, our rapid growth may place a strain on our resources, infrastructure and ability to
maintain the quality of our platform. Our revenue growth and levels of profitability in recent periods should not be considered as indicative
of future performance. In future periods, our revenue or profitability could decline or grow more slowly than we expect. Failure to manage
our growth effectively could cause our business to suffer and have an adverse effect on our financial condition and results of operations.
Risks Related to Our Corporate Structure
We rely on contractual arrangements with our VIEs and their
respective shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership.
We have relied and expects to continue to rely
on contractual arrangements with its VIEs, and their respective shareholders, and certain of their subsidiaries to operate our business
in China. These contractual arrangements may not be as effective as direct ownership in providing us with control over our VIEs. For
example, our VIEs and their respective shareholders could breach their contractual arrangements with us by, among other things, failing
to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. The revenues contributed
by our VIEs and their subsidiaries constituted substantially substantial part of the revenues in 2020 and 2021.
If we had direct ownership of our VIEs, we would
be able to exercise the rights as a shareholder to effect changes in the board of directors of the VIEs, which in turn could implement
changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual
arrangements, we rely on the performance by the VIEs and their respective shareholders of their respective obligations under the contracts
to exercise control. The shareholders of our VIEs may not act in the best interests of the company or may not perform their obligations
under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through
the contractual arrangements with its VIEs. If any dispute relating to these contracts remains unresolved, we will have to enforce its
rights under these contracts through arbitration, litigation or other legal proceedings and therefore will be subject to uncertainties
in the PRC legal system. Therefore, our contractual arrangements with the VIEs may not be as effective in controlling its business operations
as direct ownership.
Any failure by our VIEs or their respective shareholders
to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.
If our VIEs or their shareholders fail to perform
their respective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional resources
to enforce such arrangements. We may also have to rely on legal remedies under PRC law, including seeking specific performance or injunctive
relief, and claiming damages, which we cannot assure will be effective under PRC law. For example, if the shareholders of the VIEs refuse
to transfer its equity interest in its VIEs to our PRC subsidiaries or their designees after we exercises its purchase option pursuant
to these contractual arrangements, or if they otherwise act in bad faith or otherwise fail to fulfill their contractual obligations,
we may have to take legal actions to compel them to perform their contractual obligations. In addition, if any third parties claim any
interest in such shareholders’ equity interests in our VIEs, our ability to exercise shareholders’ rights or foreclose the
share pledge according to the contractual arrangements may be impaired. If these or other disputes between the shareholders of the VIEs
and third parties were to impair our control over its VIEs, then our ability to consolidate the financial results of its VIEs would be
affected, which would in turn result in a material adverse effect on our business, operations and financial condition.
The shareholders of our VIEs may
have actual or potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.
The shareholders of the VIEs may have actual
or potential conflicts of interest with us. These shareholders may breach, or cause our VIEs to breach, or refuse to renew, the existing
contractual arrangements we have with them and our VIEs, which would have a material and adverse effect on our ability to effectively
control its VIEs and receive economic benefits from them. For example, the shareholders may be able to cause our agreements with the
VIEs to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements
to us on a timely basis. We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the
best interests of us or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential
conflicts of interest between these shareholders and us. If we cannot resolve any conflict of interest or dispute between us and these
shareholders, we would have to rely on legal proceedings, which could result in disruption of Planet Green’s business and subject
Planet Green to substantial uncertainty as to the outcome of any such legal proceedings.
The PRC government exerts substantial influence over the manner in which
Planet Green, its subsidiaries, and its VIE must conduct its business activities. We are currently not required to obtain approval from
Chinese authorities to list on U.S. exchanges, however, if Planet Green, its subsidiaries or its VIE were required to obtain approval
in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing
on U.S. exchange, which would materially affect the interest of the investors.
The PRC government exerts
substantial influence over the manner in which Planet Green and its VIE must conduct its business activities. Planet Green is currently
not required to obtain approval from Chinese authorities to list on U.S. exchanges, however, if Planet Green or its VIE were required
to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to
continue listing on U.S. exchange, which would materially affect the interest of the investors. The PRC government has exercised and
continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership.
Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental
regulations, land use rights, property and other matters. The central data security, anti-monopoly policies or local PRC governments
may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts
on our part to ensure its compliance with such regulations or interpretations. Accordingly, government actions in the future, including
any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local
variations in the implementation of economic policies, could have a significant effect on economic conditions in the PRC or particular
regions thereof, and could require us to divest itself of any interest it then hold in Chinese properties.
For example, the Chinese
cybersecurity regulator announced on July 2, 2021 that it had begun an investigation of Didi Global Inc. (NYSE: DIDI) and two days later
ordered that the company’s app be removed from smartphone app stores.
Additionally, on July 6,
2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly
issued the Opinions on Strictly Cracking Down on Illegal Securities Activities, or the Opinions, which emphasized the need to strengthen
administration over illegal securities activities and supervision of overseas listings by China-based companies. The Opinions proposed
promoting regulatory systems to deal with risks facing China-based overseas-listed companies, and provided that the State Council will
revise provisions regarding the overseas issuance and listing of securities by companies limited by securities and will clarify the duties
of domestic regulatory authorities. However, the Opinions did not provide detailed rules and regulations. As a result, uncertainties
remain regarding the interpretation and implementation of the Opinions.
As such, Planet Green,
its subsidiaries and its VIE’s business segments may be subject to various government and regulatory interference in the provinces
in which they operate. Planet Green, its subsidiaries and its VIE could be subject to regulation by various political and regulatory
entities, including various local and municipal agencies and government sub-divisions. Planet Green, its subsidiaries and its VIE may
incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.
Furthermore, it is uncertain
when and whether we will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when
such permission is obtained, whether it will be denied or rescinded. Although we are currently not required to obtain permission from
any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange, our
operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or
Risks Related to Doing Business in
If the PRC government deems that
the contractual arrangements in relation to Jilin Chuanyuan, Xiangtian Energy and Anhui Ansheng, our consolidated variable interest entities,
do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation
of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those
We are a holding company
incorporated in the State of Nevada. As a holding company with no material operations of our own, we conduct all of our operations through
our subsidiaries and our VIEs in PRC. We receive the economic benefits of our VIE’s business operations through certain contractual
arrangements. Our ordinary share offered in this offering are shares of our offshore holding company instead of shares of our VIEs in
We rely on and expect
to continue to rely on our wholly owned PRC subsidiary’s contractual arrangements with the VIEs and their shareholders to operate
a portion of our business. These contractual arrangements may not be as effective in providing us with control over the VIEs as ownership
of controlling equity interests would be in providing us with control over, or enabling us to derive economic benefits from the operations
of the VIEs. Under the current contractual arrangements, as a legal matter, if any of the VIEs or any of their shareholders executing
the VIE Agreements fails to perform its, his or her respective obligations under these contractual arrangements, we may have to incur
substantial costs and resources to enforce such arrangements, and rely on legal remedies available under PRC laws, including seeking
specific performance or injunctive relief, and claiming damages, which we cannot assure you will be effective. For example, if shareholders
of a variable interest entity were to refuse to transfer their equity interests in such variable interest entity to us or our designated
persons when we exercise the purchase option pursuant to these contractual arrangements, we may have to take a legal action to compel
them to fulfill their contractual obligations.
If (i) the applicable
PRC authorities invalidate these contractual arrangements for violation of PRC laws, rules and regulations, (ii) any variable interest
entity or its shareholders terminate the contractual arrangements (iii) any variable interest entity or its shareholders fail to perform
its/his/her obligations under these contractual arrangements, or (iv) if these regulations change or are interpreted differently in the
future, our business operations in China would be materially and adversely affected, and the value of your securities would substantially
decrease or even become worthless. Further, if we fail to renew these contractual arrangements upon their expiration, we would not be
able to continue our business operations unless the then current PRC law allows us to directly operate businesses in China.
addition, if any variable interest entity or all or part of its assets become subject to liens or rights of third-party creditors, we
may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial
condition and results of operations. If any of the variable interest entities undergoes a voluntary or involuntary liquidation proceeding,
its shareholders or unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to
operate our business, which could materially and adversely affect our business and our ability to generate revenues.
of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC.
The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties
in the PRC legal system could limit our ability to enforce these contractual arrangements. In the event we are unable to enforce these
contractual arrangements, we may not be able to exert effective control over our operating entities and we may be precluded from operating
our business, which would have a material adverse effect on our financial condition and results of operations.
contractual arrangements may not be as effective as direct ownership in providing us with control over our VIEs. For example, our VIEs
and their shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations
in an acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of our VIEs, we would
be able to exercise our rights as a shareholder to effect changes in the board of directors of our VIEs, which in turn could implement
changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual
arrangements, we rely on the performance by our VIEs and their shareholders of their obligations under the contracts to exercise control
over our VIEs. The shareholders of our consolidated VIEs may not act in the best interests of our company or may not perform their obligations
under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through
the contractual arrangements with our VIEs.
our VIEs or their shareholders fail to perform their respective obligations under the contractual arrangements, we may have to incur
substantial costs and expend additional resources to enforce such arrangements. For example, if the shareholders of our VIEs refuse to
transfer their equity interest in our VIEs to us or our designee if we exercise the purchase option pursuant to these contractual arrangements,
or if they otherwise act in bad faith toward us, then we may have to take legal actions to compel them to perform their contractual obligations.
In addition, if any third parties claim any interest in such shareholders’ equity interests in our VIEs, our ability to exercise
shareholders’ rights or foreclose the share pledge according to the contractual arrangements may be impaired. If these or other
disputes between the shareholders of our VIEs and third parties were to impair our control over our VIEs, our ability to consolidate
the financial results of our VIEs would be affected, which would in turn result in a material adverse effect on our business, operations
and financial condition.
PRC government authorities
may deem that foreign ownership is directly or indirectly involved in our VIE’s shareholding structure. If our corporate structure
and contractual arrangements are deemed by the MIIT or the MOFCOM or other regulators having competent authority to be illegal, either
in whole or in part, we may lose control of our consolidated VIE and have to modify such structure to comply with regulatory requirements.
However, there can be no assurance that we can achieve this without material disruption to our VATS business. Furthermore, if we or our
VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits
or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures,
including, without limitation:
the business license and/or operating licenses of our WFOE or our VIE;|
or placing restrictions or onerous conditions on our operations through any transactions
among our WFOE, our VIE and its subsidiaries;|
fines, confiscating the income from our WFOE, our VIE or its subsidiaries, or imposing other
requirements with which we or our VIE may not be able to comply;|
restrictions on our right to collect revenues;|
down our servers or blocking our app/websites;|
us to restructure our ownership structure or operations, including terminating the contractual
arrangements with our VIE and deregistering the equity pledges of our VIE, which in turn
would affect our ability to consolidate, derive economic interests from, or exert effective
control over our VIE;|
or prohibiting our use of the proceeds of this offering to finance our business and operations
in China; or|
other regulatory or enforcement actions against us that could be harmful to our business.|
The imposition of any
of these penalties would result in a material and adverse effect on our ability to conduct our business. In addition, it is unclear what
impact the PRC government actions would have on us and on our ability to consolidate the financial results of our VIE in our consolidated
financial statements, if the PRC government authorities were to find our corporate structure and contractual arrangements to be in violation
of PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct the activities
of our VIE or our right to receive substantially all the economic benefits and residual returns from our VIE and we are not able to restructure
our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of our
VIE in our consolidated financial statements. Either of these results, or any other significant penalties that might be imposed on us
in this event, would have a material adverse effect on our financial condition and results of operations.
We may be adversely affected by the complexity,
uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses
or permits applicable to our business may have a material adverse effect on our business and results of operations.
The PRC government
extensively regulates the internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to,
companies in the internet industry. These internet-related laws and regulations are relatively new and evolving, and their interpretation
and enforcement involve significant uncertainties. As a result, in certain circumstances it may be difficult to determine what actions
or omissions may be deemed to be in violation of applicable laws and regulations.
The PRC government
regulates telecommunications-related businesses through strict business licensing requirements and other government regulations. These
laws and regulations also include limitations on foreign ownership of PRC companies that engage in telecommunications-related businesses.
Specifically, foreign investors are not allowed to own more than 50% of the equity interests in a value-added telecommunications service
provider (except for e-commerce, domestic multi-party communication, storage and forwarding classes and call centers) under the Special
Administrative Measures for Access of Foreign Investment (Negative List) (Edition 2020), which was promulgated on June 23, 2020 and implemented
on July 23, 2020, and such major foreign investor in a Foreign-Invested Telecommunications Enterprise must have experience in providing
value-added telecommunications services, or VATS, and maintain a good track record in accordance with the Administrative Provisions on
Foreign-Invested Telecommunications Enterprises (revised in 2016), and other applicable laws and regulations.
evolving PRC regulatory system for the internet industry may lead to the establishment of new regulatory agencies. For example, in May
2011, the State Council announced the establishment of a new department, the State Internet Information Office (with the involvement
of the State Council Information Office, the MITT, and the Ministry of Public Security). The primary role of this new agency is to facilitate
the policy-making and legislative development in this field, to direct and coordinate with the relevant departments in connection with
online content administration and to deal with cross-ministry regulatory matters in relation to the internet industry.
Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business, issued
by the MITT in July 2006, prohibits domestic telecommunication service providers from leasing, transferring or selling telecommunications
business operating licenses to any foreign investor in any form, or providing any resources, sites or facilities to any foreign investor
for their illegal operation of a telecommunications business in China. According to this circular, either the holder of a value-added
telecommunication services operation permit or its shareholders must directly own the domain names and trademarks used by such license
holders in their provision of value-added telecommunication services. The circular also requires each license holder to have the necessary
facilities, including servers, for its approved business operations and to maintain such facilities in the regions covered by its license.
If an ICP License holder fails to comply with the requirements and also fails to remedy such non-compliance within a specified period
of time, the MITT or its local counterparts have the discretion to take administrative measures against such license holder, including
revoking its ICP License.
are not subject to the requirements of permits or licenses under telecommunications regulations, and Planet Green, its subsidiaries and
VIEs are not required to hold ICP licenses. However, the interpretation and application of existing PRC laws, regulations and policies
and possible new laws, regulations or policies relating to the internet industry have created substantial uncertainties regarding the
legality of existing and future foreign investments in, and the businesses and activities of, internet businesses in China, including
our business. We cannot assure you that we have obtained all the permits or licenses required for conducting our business in China or
will be able to maintain our existing licenses or obtain new ones. If the PRC government considers that we were operating without the
proper approvals, licenses or permits or promulgates new laws and regulations that require additional approvals or licenses or imposes
additional restrictions on the operation of any part of our business, it has the power, among other things, to levy fines, confiscate
our income, revoke our business licenses, and require us to discontinue our relevant business or impose restrictions on the affected
portion of our business. Any of these actions by the PRC government may have a material adverse effect on our business and results of
We may become subject to the Criminal
Law, the Cybersecurity Law, the Civil Code, the Data Security Law and other applicable laws and regulations of PRC. We may be liable
for improper use or appropriation of personal information provided by our customers.
We may become subject
to the Criminal Law, the Cybersecurity Law, the Civil Code, the Data Security Law and other applicable laws and regulations in the PRC.
These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable
to us are often uncertain and may be conflicting, particularly with respect to foreign laws. In particular, with respect to the collection,
sharing, use, processing, disclosure, and protection of personal information and other user data, these laws and regulations often vary
in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.
We expect to obtain
information about various aspects of our operations as well as regarding our employees and third parties. We also maintain information
about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and
company data is critical to our business. Our customers and employees expect that we will adequately protect their personal information.
We are required by PRC Criminal Law, Cybersecurity Law and Civil Code of PRC to keep strictly confidential the personal information that
we collect, and to take adequate security measures to safeguard such information.
The PRC Criminal Law,
as amended by its Amendment 7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions,
companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained during the
course of performing duties or providing services or obtaining such information through theft or other illegal ways.
On November 7, 2016,
the Standing Committee of the PRC National People’s Congress issued the Cybersecurity Law of the PRC, or Cybersecurity Law, which
became effective on June 1, 2017 (the “CSL”). Pursuant to the Cybersecurity Law, network operators must not, without users’
consent, collect their personal information, and may only collect users’ personal information necessary to provide their services.
Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding
the protection of personal information as stipulated under the relevant laws and regulations.
The CSL is the first
PRC law that systematically lays out the regulatory requirements on cybersecurity and data protection, subjecting many previously under-regulated
or unregulated activities in cyberspace to government scrutiny. The legal consequences of violation of the CSL include penalties of warning,
confiscation of illegal income, suspension of related business, winding up for rectification, shutting down the websites, and revocation
of business license or relevant permits.
The Civil Code of the
PRC (issued by the PRC National People’s Congress on May 28, 2020 and effective from January 1, 2021) provides main legal basis
for privacy and personal information infringement claims under the Chinese civil laws. PRC regulators, including the Cyberspace Administration
of China, MIIT, and the Ministry of Public Security have been increasingly focused on regulation in the areas of data security and data
The PRC regulatory requirements
regarding cybersecurity are constantly evolving. For instance, various regulatory bodies in China, including the Cyberspace Administration
of China, the Ministry of Public Security and the SAMR, have enforced data privacy and protection laws and regulations with varying and
evolving standards and interpretations. In April 2020, the Chinese government promulgated Cybersecurity Review Measures, which came into
effect on June 1, 2020. According to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity
review when purchasing network products and services which do or may affect national security.
In April 2020, the Cyberspace
Administration of China (“CAC”) and certain other PRC regulatory authorities promulgated the Cybersecurity Review Measures,
which became effective in June 2020. Pursuant to the Cybersecurity Review Measures, operators of critical information infrastructure
must pass a cybersecurity review when purchasing network products and services which do or may affect national security. On July 10,
2021, the CAC issued a revised draft of the Measures for Cybersecurity Review for public comments (“Draft Measures”), which
required that, in addition to “operator of critical information infrastructure,” any “data processor” carrying
out data processing activities that affect or may affect national security should also be subject to cybersecurity review, and further
elaborated the factors to be considered when assessing the national security risks of the relevant activities, including, among others,
(i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used
or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal
information being affected, controlled, or maliciously used by foreign governments after listing abroad. The CAC has said that under
the proposed rules companies holding data on more than 1,000,000 users must now apply for cybersecurity approval when seeking listings
in other nations because of the risk that such data and personal information could be “affected, controlled, and maliciously exploited
by foreign governments,” The cybersecurity review will also investigate the potential national security risks from overseas IPOs.
We do not know what regulations will be adopted or how such regulations will affect us and our listing on NYSE American. In the event
that the CAC determines that we are subject to these regulations, we may be required to delist from NYSE American and we may be subject
to fines and penalties. On June 10, 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which will take effect
on September 1, 2021. The Data Security Law also sets forth the data security protection obligations for entities and individuals handling
personal data, including that no entity or individual may acquire such data by stealing or other illegal means, and the collection and
use of such data should not exceed the necessary limits The costs of compliance with, and other burdens imposed by, CSL and any other
cybersecurity and related laws may limit the use and adoption of our products and services and could have an adverse impact on our business.
Further, if the enacted version of the Measures for Cybersecurity Review mandates clearance of cybersecurity review and other specific
actions to be completed by companies like us, we face uncertainties as to whether such clearance can be timely obtained, or at all.
will not be subject to the cybersecurity review by the CAC for this offering, and the oversight by the CAC over data security does not
have impacts in our business, given that: (i) our products and services are offered not directly to individual users but through our
institutional customers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed
in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.
We are in compliance with the regulations issued by the CAC. However, there remains uncertainty as to how the Draft Measures will be
interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed
implementation and interpretation related to the Draft Measures. If any such new laws, regulations, rules, or implementation and interpretation
comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us.
cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that
we can fully or timely comply with such laws. In the event that we are subject to any mandatory cybersecurity review and other specific
actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at
all. Given such uncertainty, we may be further required to suspend our relevant business, shut down our website, or face other penalties,
which could materially and adversely affect our business, financial condition, and results of operations.
M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors,
which could make it more difficult for us to pursue growth through acquisitions in China.
Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory
agencies in August 2006 and amended in 2009, and some other regulations and rules concerning mergers and acquisitions established additional
procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex, including
requirements in some instances that the MOC be notified in advance of any change-of-control transaction in which a foreign investor takes
control of a PRC domestic enterprise. Moreover, the Anti-Monopoly Law requires that the MOC shall be notified in advance of any concentration
of undertaking if certain thresholds are triggered. In addition, the security review rules issued by the MOC that became effective in
September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns
and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national
security” concerns are subject to strict review by the MOC, and the rules prohibit any activities attempting to bypass a security
review, including by structuring the transaction through a proxy or contractual control arrangement. In the future, we may grow our business
by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to
complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the MOC or
its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business
or maintain our market share.
failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC
plan participants or us to fines and other legal or administrative sanctions.
February 2012, SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating
in Stock Incentive Plan of Overseas Publicly-Listed Company, replacing earlier rules promulgated in March 2007. Pursuant to these rules,
PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any share
incentive plan of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic
qualified agent, which could be the PRC subsidiary of such overseas listed company, and complete certain other procedures. In addition,
an overseas entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the
purchase or sale of shares and interests. We, our executive officers and other employees who are PRC citizens or who have resided in
the PRC for a continuous period of not less than one year and who have been granted options or other awards are subject to these regulations.
Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit our ability to contribute
additional capital into our PRC subsidiary and limit our PRC subsidiary’ ability to distribute dividends to us. We also face regulatory
uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees
under PRC law.
bodies of the United States may be limited in their ability to conduct investigations or inspections of our operations in China.
time to time, the Company may receive requests from certain U.S. agencies to investigate or inspect the Company’s operations or
to otherwise provide information. While the Company will be compliant with these requests from these regulators, there is no guarantee
that such requests will be honored by those entities who provide services to us or with whom we associate, especially as those entities
are located in China. Furthermore, an on-site inspection of our facilities by any of these regulators may be limited or entirely prohibited.
Such inspections, though permitted by the Company and its affiliates, are subject to the capricious nature of Chinese enforcers and may
therefore be impossible to facilitate.
The M&A Rules and certain other
PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more
difficult for us to pursue growth through acquisitions in China.
The Regulations on
Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in
2006 and amended in 2009, and some other regulations and rules concerning mergers and acquisitions established complex procedures and
requirements for acquisition of Chinese companies by foreign investors, including requirements in some instances that the Ministry of
Commerce of the PRC be notified in advance of any change-of-control transaction in which a foreign investor takes control of
a PRC domestic enterprise. Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress,
which became effective in 2008, requires that transactions which are deemed concentrations and involve parties with specified turnover
thresholds must be cleared by the Ministry of Commerce before they can be completed. In addition, the security review rules issued by
the Ministry of Commerce and became effective in September 2011 specify that mergers and acquisitions by foreign investors that
raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de
facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the Ministry
of Commerce, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through
a proxy or contractual control arrangement.
In the future, Planet
Green may pursue potential strategic acquisitions that are complementary to Planet Green’s business and operations. Complying with
the requirements of the above-mentioned regulations and other rules to complete such transactions could be time-consuming, and any required
approval processes, including obtaining approval or clearance from the Ministry of Commerce, may delay or inhibit Planet Green’s
ability to complete such transactions, which could affect Planet Green’s ability to expand its business or maintain Planet Green’s
market share. Furthermore, according to the M&A Rules, if a PRC entity or individual plans to merger or acquire its related PRC entity
through an overseas company legitimately incorporated or controlled by such entity or individual, such a merger and acquisition will
be subject to examination and approval by the Ministry of Commerce. The application and interpretations of M&A Rules are still uncertain,
and there is possibility that the PRC regulators may promulgate new rules or explanations requiring that Planet Green obtain approval
of the Ministry of Commerce for Planet Green’s completed or ongoing mergers and acquisitions. There is no assurance that Planet
Green can obtain such approval from the Ministry of Commerce for Planet Green’s mergers and acquisitions, and if Planet Green fails
to obtain those approvals, Planet Green may be required to suspend Planet Green’s acquisition and be subject to penalties. Any
uncertainties regarding such approval requirements could have a material adverse effect on Planet Green’s business, results of
operations and corporate structure.
changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our
business, financial condition and results of operations.
Substantially portion of our revenues are generally
sourced from China. Accordingly, our results of operations, financial condition and prospects are influenced by economic, political and
legal developments in China. Economic reforms begun in the late 1970s have resulted in significant economic growth. However, any economic
reform policies or measures in China may from time to time be modified or revised. China’s economy differs from the economies of
most developed countries in many respects, including with respect to the amount of government involvement, level of development, growth
rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the
utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of improved
corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In
addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies.
The Chinese government also exercises significant control over China’s economic growth through allocating resources, controlling
payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries
the PRC economy has experienced significant growth in the past 30 years, growth has been uneven across different regions and among
different economic sectors. The Chinese government has implemented measures to encourage economic growth and guide the allocation of
the resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our
financial condition and results of operations may be adversely affected by government control over capital investments or changes in
the PRC economy has grown significantly in the past decade, that growth may not continue, as evidenced by the slowing of the growth of
the PRC economy since 2012. Any adverse changes in economic conditions in China, in the policies of the PRC government or in the laws
and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely
affect our business and operating results, lead to reduction in demand for our services and adversely affect our competitive position.
severe or prolonged downturn in the PRC or global economy and political tensions between the United States and China could materially
and adversely affect our business and our financial condition.
The global macroeconomic environment is facing
challenges, including the end of quantitative easing by the U.S. Federal Reserve, the economic slowdown in the Eurozone since 2014 and
uncertainties over the impact of Brexit. The Chinese economy has shown slower growth compared to the previous decade since 2012 and the
trend may continue. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted
by the central banks and financial authorities of some of the world’s leading economies, including the United States and China.
There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in market volatility.
If we plan to expand its business internationally
and do business cross-border in the future, any unfavorable government policies on international trade, such as capital controls or tariffs,
may affect the demand for our products and services, impact our competitive position, or prevent us from being able to conduct business
in certain countries. If any new tariffs, legislation, or regulations are implemented, or if existing trade agreements are renegotiated,
such changes could adversely affect our business, financial condition, and results of operations. In particular, there have been heightened
tensions in international economic relations between the United States and China. The U.S. government has recently imposed, and
has recently proposed to impose additional, new, or higher tariffs on certain products imported from China to penalize China for what
the U.S. government characterizes as unfair trade practices. China has responded by imposing, and proposing to impose additional, new,
or higher tariffs on certain products imported from the United States. Following mutual retaliatory actions for months, on January 15,
2020, the United States and China entered into the Economic and Trade Agreement Between the United States of America and the
People’s Republic of China as a phase one trade deal, effective on February 14, 2020. Although the direct impact of the current
international trade tension, and any escalation of such tension, on the AR industry in China is uncertain, the negative impact on general,
economic, political and social conditions may adversely impact our business, financial condition and results of operations.
The U.S. law and regulations, including
the Holding Foreign Companies Accountable Act, call for additional and more stringent criteria to be applied to emerging market companies
upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments
could add uncertainties to our offering.
April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint
statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including
China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers
in China and higher risks of fraud in emerging markets.
May 18, 2020, NYSE American filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily
operating in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of director
for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the
qualifications of the company’s auditors.
May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned
or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not
subject to PCAOB inspection. If the PCAOB is unable to inspect the Company’s auditors for three consecutive years, the issuer’s
securities are prohibited to trade on a U.S. stock exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding
Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.
March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure
requirements of the Act. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual
report on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign
jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority
in that jurisdiction. The SEC will implement a process for identifying such a registrant and any such identified registrant will be required
to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction
and will also require disclosure in the registrant’s annual report regarding the audit arrangements of, and governmental influence
on, such a registrant.
On June 22, 2021,
the U.S. Senate passed a bill which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive
non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three years to
On December 2, 2021,
the SEC adopted amendments to finalize the rules implementing the submission and disclosure requirements of the HFCAA. The rules will
apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting
firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigation such registered public accounting
firm, such SEC identified registrants are referred to as Commission-Identified Issuers. The final amendments require that Commission-Identified
Issuers submit documentation to the SEC establishing, among other things, that, if true, it is not owned or controlled by a governmental
entity in the public accounting firm’s foreign jurisdiction and if the Commission-Identified Issuer is a “foreign issuer,”
as defined in Exchange Act Rule 3b-4, to provide certain additional disclosures in its annual report.
On December 16, 2021,
the PCAOB issued a HFCAA Determination Report, pursuant to 15 U.S.C. Section 7214(i)(2)(A) and PCAOB Rule 6100 (the “Report”).
Pursuant to the Report, the PCAOB notified the U.S. Securities and Exchange Commission that it issued two determinations that (1) the
PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC because
of a position taken by one or more authorities in mainland China (the “Mainland China Determination”) and (2) the PCAOB is
unable to inspect or investigate completely registered public accounting firms headquartered in Hong Kong, a Special Administrative Region
of the PRC, because of a position taken by one or more authorities in Hong Kong (the “Hong Kong Determination”). In its two
appendixes the Report identifies the auditors that are subject to the Mainland China Determination and the Hong Kong Determination.
lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the
auditors based in China. As a result, the investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB
to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firms’ audit
procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could
cause existing and potential investors in our share to lose confidence in our audit procedures and reported financial information and
the quality of our financial statements.
Our auditor, the independent
registered public accounting firm that issues the audit report included elsewhere in this prospectus, as an auditor of companies that
are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which
the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards. Our auditor
is headquartered in California, and is subject to inspection by the PCAOB on a regular basis with the last inspection in October 2019.
the recent developments would add uncertainties to our offering, and we cannot assure you whether NYSE American or regulatory authorities
would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures
and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it
relates to the audit of our financial statements. In addition, any additional actions, proceedings, or new rules resulting from the efforts
to increase U.S. regulatory access to audit information could create some uncertainty for investors, the market price of our ordinary
share could be adversely affected, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement
or being required to engage a new audit firm, which would require significant expense and management time.
There are risks that the Chinese government may intervene
or influence our operations at any time which could result in a material change in our operations and/or the value of our securities
The PRC legal system is a civil law system based
on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have
limited precedential value. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve,
the promulgation of new rules and explanations and interpretations of many laws, regulations and rules are not always uniform and enforcement
of these laws, regulations and rules involves uncertainties.
In 1979, the PRC government began to promulgate
a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past
three decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has
not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic
activities in China. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Specifically,
rules and regulations in China can change quickly with little advance notice. The Chinese government may exert more control and oversight
over offerings conducted overseas and/or foreign investment in China-based issuers, and there are risks that such action could significantly
limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to
significantly decline or be worthless.
Uncertainties in the promulgation, interpretation
and enforcement of PRC laws and regulations could limit the legal protections available to you and us. From time to time, we may have
to resort to administrative and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities
have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the
outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. Furthermore,
the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or
at all) that may have retroactive effect. As a result, we may not be aware of its violation of these policies and rules until sometime
after the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual
property) and procedural rights, could materially and adversely affect our business and impede our ability to continue its operations.
Planet Green, our subsidiaries, and the VIEs are subject
to extensive and evolving legal system in the PRC, non-compliance with which, or changes in which, may materially and adversely affect
Planet Green, our subsidiaries and the VIEs’ business and prospects, and may result in a material change in Planet Green, our subsidiaries
and the VIEs’ operations and/or the value of our securities or could significantly limit or completely hinder Planet Green, our
subsidiaries and the VIEs’ ability to offer or continue to offer securities to investors and cause the value of our securities
to significantly decline or be worthless.
PRC companies are subject to various PRC laws,
regulations and government policies and the relevant laws, regulations and policies continue to evolve. Recently, the PRC government
is enhancing supervision over companies seeking listings overseas and some specific business or activities such as the use of variable
interest entities and data security or anti-monopoly. The PRC government may adopt new measures that may affect Planet Green, our subsidiaries
and the VIEs’ operations, or may exert more oversight and control over offerings conducted outside of China and foreign investment
in China-based companies, and Planet Green, our subsidiaries and the VIEs may be subject to challenges brought by these new laws, regulations
and policies. However, since these laws, regulations and policies are relatively new and the PRC legal system continues to rapidly evolve,
the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve
uncertainties. Furthermore, as Planet Green, our subsidiaries and the VIEs may be subject to additional, yet undetermined, laws and regulations,
compliance may require us to obtain additional permits and licenses, complete or update registrations with relevant regulatory authorities,
adjust our business operations, as well as allocate additional resources to monitor developments in the relevant regulatory environment.
However, under the stringent regulatory environment, it may take much more time for the relevant regulatory authorities to approve new
applications for permits and licenses, and complete or update registrations and we cannot assure you that we will be able to comply with
these laws and regulations in a timely manner or at all. The failure to comply with these laws and regulations may delay, or possibly
prevent, us to conduct business, accept foreign investments, or be listed overseas.
The occurrence of any of these events may materially
and adversely affect our business and prospects and may result in a material change in our operations and/or the value of our securities
or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. In addition, if
any of changes causes us unable to direct the activities of the VIEs or lose the right to receive its economic benefits, we may not be
able to consolidate the VIEs into our consolidated financial statements in accordance with U.S. GAAP, which could cause the value of
PLAG’s securities to significantly decline or become worthless.
Any actions by the Chinese government, including any decision
to intervene or influence the operations of our PRC subsidiaries or the VIEs or to exert control over any offering of securities conducted
overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiaries
or the VIEs, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value
of such securities to significantly decline or be worthless.
of our subsidiaries and the VIEs to operate in China may be impaired by changes in its laws and regulations, including those relating
to value-added telecommunications service industry, taxation, foreign investment limitations, and other matters.
The central or local governments of China may
impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on
our part to ensure our PRC subsidiaries and the VIEs’ compliance with such regulations or interpretations. As such, our PRC subsidiaries
and the VIEs may be subject to various government actions and regulatory interference in the provinces in which they operate. They could
be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government
sub-divisions. They may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for
any failure to comply.
Furthermore, it is uncertain when and whether
we will be required to obtain permission from the PRC government to maintain our listing status on U.S. exchanges in the future, and
even when such permission is obtained, whether it will be later denied or rescinded. On December 24, 2021, the CSRC issued the Provisions
of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) and
the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (collectively,
the “Draft Overseas Listing Regulations”), which propose to require PRC companies and their overseas special purpose vehicles
that seek to offer and list in overseas markets to file with the CSRC and meet compliance rules for their listing. Although we believe
that, under existing applicable PRC laws, regulations and regulatory rules, our company, our WFOEs, the VIEs and their subsidiaries,
are not required to obtain permission from the CSRC, and none of them has received any notice of denial of permission to list on a U.S.
exchange from any Chinese authorities, we cannot assure you that the relevant PRC government agencies, including the CSRC, would reach
the same conclusion as we do. If the CSRC or any other PRC regulatory body subsequently determines that we need to file with the CSRC
or obtain the CSRC’s approval to maintain our listing status on U.S. exchanges or for the offering of securities by us under this
prospectus or if the CSRC or any other PRC government authorities promulgates any interpretation or implements rules that would require
us to file with or obtain approvals of the CSRC or other governmental bodies for any such listing status or offering, we may face adverse
actions that could have a material and adverse effect on our business, reputation, financial condition, results of operations, prospects,
as well as the trading price of the ADSs.
Accordingly, government actions in the future, including
any decision to intervene or influence the operations of our PRC subsidiaries or the VIEs at any time, or to exert control over an offering
of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations
of our PRC subsidiaries or the VIEs, may limit or completely hinder our ability to offer or continue to offer securities to investors,
and/or may cause the value of such securities to significantly decline or be worthless. We or the VIEs have not received any inquiry,
notice, warning, or sanctions regarding our corporate structure, contractual arrangements, the VIEs’ operations and the offering
that we may make under this prospectus from the CSRC, CAC or any other PRC government authorities.
The approval of and the filing with the CSRC or other PRC
government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict
whether or for how long we will be able to obtain such approval or complete such filing.
on Mergers and Acquisitions of Domestic Companies by Foreign Investors (the “M&A Rules”), adopted by six PRC regulatory
agencies in 2006 and amended in 2009, include, among other things, provisions that purport to require that an offshore special purpose
vehicle, formed for the purpose of an overseas listing of securities through acquisitions of PRC domestic enterprises or assets and controlled
by PRC enterprises or individuals, to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s
securities on an overseas stock exchange. On September 21, 2006, pursuant to the M&A
Rules and other PRC laws, the CSRC published on its official website relevant guidance regarding its approval of the listing and trading
of special purpose vehicles’ securities on overseas stock exchanges, including a list of application materials. However, substantial
uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles. If the CSRC approval
is required for any of our future offering of securities overseas or to maintain our offshore listing status on U.S. exchanges, it is
uncertain whether we can or how long it will take us to obtain the approval and, even if we obtain such CSRC approval, the approval could
be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such
approval if obtained, may subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which may materially and adversely
affect our business, financial condition, and results of operations.
6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in accordance
with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision
on overseas listings by China-based companies and proposed to take effective measures, such
as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed
companies. These opinions and any related implementation rules to be enacted may subject us to additional compliance requirement in the
future. As these opinions were recently issued, official guidance to act upon and the interpretation thereof remain unclear at this time.
We cannot assure that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation
rules on a timely basis, or at all. On December 24, 2021, the CSRC issued the Draft Overseas Listing Regulations, which propose to establish
a new filing-based regime to regulate overseas offerings and listings by domestic companies. Specifically, an overseas offering and listing
by a PRC company, whether directly or indirectly, an initial or follow-on offering, must be filed with the CSRC. The examination and
determination of an indirect offering and listing will be conducted on a substance-over-form basis, and an offering and listing shall
be deemed as a PRC company’s indirect overseas offering and listing if the issuer meets the following conditions: (1) any of the
operating income, gross profit, total assets, or net assets of the PRC enterprise in the most recent fiscal year was more than 50% of
the relevant line item in the issuer’s audited consolidated financial statement for that year; and (2) senior management personnel
responsible for business operations and management are mostly PRC citizens or have domicile in the PRC, and the principal place of business
is in the PRC or main business activities are carried out in the PRC. The issuer or its affiliated PRC entity, as the case may be, shall
file with the CSRC for its initial public offering, follow-on offering and other equivalent offering activities. Particularly, the issuer
shall submit the filing with respect to its initial public offering and listing within three business days after its initial filing of
the listing application, and submit the filing with respect to its follow-on offering within three business days after the completion
of the follow-on offering. Failure to comply with the filing requirements may result in fines to the relevant PRC companies, suspension
of their businesses, revocation of their business licenses and operation permits and fines on the controlling shareholder and other responsible
persons. The Draft Overseas Listing Regulations also set forth certain regulatory red lines for overseas offerings and listings by PRC
There are substantial uncertainties as to whether
these draft measures to regulate direct or indirect overseas offering and listing would be further amended or updated, their enactment
timetable and final content. In a Q&A released on CSRC’s official website on December 24, 2021, the respondent CSRC official
indicated that the proposed new filing requirement will start with new issuers and listed companies seeking follow-on financing and other
financing activities. As for the filings for other listed companies, the regulator will grant adequate transition period and apply separate
arrangements. The Q&A also pointed out that, if compliant with relevant PRC laws and regulations, companies with compliant VIE structure
may seek overseas listing after completion of the CSRC filings. Nevertheless, the Q&A did not specify what would qualify as a “compliant
VIE structure” and what relevant PRC laws and regulations are required to be complied with. Although we believe that, under existing
applicable PRC laws, regulations and regulatory rules, our company, our WFOEs, the VIEs and their subsidiaries, are not required to obtain
permission from the CSRC, and none of them has received any notice of denial of permission to list on a U.S. exchange from any Chinese
authorities, we cannot assure you that the relevant PRC government agencies, including the CSRC, would reach the same conclusion as we
do. Given the substantial uncertainties surrounding the latest CSRC filing requirements at this stage, we cannot assure you that, if
ever required, we would be able to complete the filings and fully comply with the relevant new rules on a timely basis, or at all.
On December 27, 2021, the NDRC and MOFCOM jointly
issued the Negative List (2021 Version), which became effective on January 1, 2022. Pursuant to the Negative List (2021 Version), if
a PRC company engaging in the prohibited business stipulated in the Negative List (2021 Version) seeks an overseas offering and listing,
it shall obtain the approval from the competent governmental authorities. The foreign investors of the issuer shall not be involved in
the company’s operation and management, and their shareholding percentages shall be subject, mutatis mutandis, to the relevant
regulations on the domestic securities investments by foreign investors. As the 2021 Negative List is relatively new, there remain substantial
uncertainties as to the interpretation and implementation of these new requirements, and it is unclear as to whether and to what extent
listed companies like us will be subject to these new requirements. If we are required to comply with these requirements and fail to
do so on a timely basis, if at all, our business operation, financial condition and business prospect may be adversely and materially
In addition, we cannot assure you that any new rules or
regulations promulgated in the future will not impose additional requirements on us. If it is determined in the future that approval
and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Measures for
Cybersecurity Review and the annual data security review under the Administrative Measures for Internet Data Security (Draft for Comments),
are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete
such filing procedures and any such approval or filing could be rescinded or rejected. Any failure to obtain or delay in obtaining such
approval or completing such filing procedures for our offshore offerings, or a rescission of any such approval or filing if obtained
by us, may subject us to sanctions by the CSRC or other PRC regulatory authorities, which could materially and adversely affect our business,
results of operations, financial condition and prospects, as well as the trading price of our listed securities. The CSRC or other PRC
regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement
and delivery of the shares offered. Consequently, if investors engage in market trading or other activities in anticipation of and prior
to settlement and delivery, they do so at the risk that settlement and delivery may not occur. In addition, if the CSRC or other regulatory
authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or
other regulatory procedures for our prior offshore offerings, we may be unable to obtain a waiver of such approval requirements, if and
when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding such approval requirement
could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities.
Failure to comply with governmental regulations and other
legal obligations concerning data protection and cybersecurity may materially and adversely affect our business.
We and the VIEs are subject to PRC laws and
regulations governing the collecting, storing, sharing, using, processing, disclosure and protection of data on the internet and mobile
platforms as well as cybersecurity. The PRC regulators, including the MIIT and the CAC, have been increasingly focused on regulation
in the areas of cybersecurity and data protection and governmental authorities have enacted a series of laws and regulations to enhance
the protection of privacy and data, which require certain authorization or consent from users prior to collection, use or disclosure
of their personal data and also protection of the security of the personal data of such users. The MIIT issued the Order for the Protection
of Telecommunications and Internet User Personal Information on July 16, 2013, requiring internet service providers to establish and
publish protocols relating to the collection or use of personal information, keep any collected information strictly confidential and
take technological and other measures to maintain the security of such information. Institutions and their employees are prohibited from
selling or otherwise illegally disclosing a person’s personal information obtained during the course of performing duties or providing
services. Pursuant to the PRC Cybersecurity Law, effective on June 1, 2017, network operators are required to fulfill certain obligations
to safeguard cyber security and enhance network information management.
Moreover, existing PRC privacy,
cybersecurity and data protection-related laws and regulations are evolving and subject to potentially differing interpretations, and
various legislative and regulatory bodies may expand current or enact new laws and regulations regarding privacy, cybersecurity and data
protection-related matters. These developments could adversely affect our and the VIEs’ business, operating results and financial
condition. Any failure or perceived failure by us or the VIEs to comply with new or existing PRC privacy, cybersecurity or data protection
laws, regulations, policies, industry standards or legal obligations, or any systems failure or security incident that results in the
unauthorized access to, or acquisition, release or transfer of, personally identifiable information or other data relating to customers
or individuals may result in governmental investigations, inquiries, enforcement actions and prosecutions, private claims and litigation,
fines and penalties, adverse publicity or potential loss of business. For example, on June 10, 2021, the Standing Committee of the National
People’s Congress (the “Standing Committee of the NPC”), promulgated the PRC Data Security Law, which took effect in
September 2021. The PRC Data Security Law provides for data security obligations on entities and individuals carrying out data activities.
The PRC Data Security Law also introduces a national security review procedure for those data activities which may affect national security
and imposes export restrictions on certain data information. Furthermore, along with the promulgation of the Opinions on Strictly Cracking
Down Illegal Securities Activities in accordance with the Law, overseas-listed China-based companies are experiencing a heightened scrutiny
over their compliance with laws and regulations regarding data security, cross-border data flow and management of confidential information
from PRC regulatory authorities.
On August 20, 2021, the Standing Committee of
the NPC issued the Personal Information Protection Law, which has been effective from November 1, 2021 and reiterates the circumstances
under which a personal information processor could process personal information and the requirements for such circumstances. The Personal
Information Protection Law clarifies the scope of application, the definition of personal information and sensitive personal information,
the legal basis of personal information processing and the basic requirements of notice and consent.
On October 29, 2021, the CAC publicly solicited
opinions on the Measures for the Security Assessment of Data Cross-border Transfer (Draft for Comments), which requires that any data
processor who provides to an overseas recipient important data collected and generated during operations within the territory of the
PRC or personal information that should be subject to security assessment shall conduct security assessment. As of the date of this prospectus,
the anticipated adoption or effective date of the Measures for the Security Assessment of Data Cross-border Transfer (Draft for Comments)
are subject to further changes with substantial uncertainty.
On November 14, 2021, the CAC publicly solicited
opinions on the Administrative Measures for Internet Data Security (Draft for Comments) (the “Draft Measures for Internet Data
Security”), which requires that data processors processing “important data” or listed overseas shall conduct an annual
data security assessment by itself or commission a data security service provider to do so and submit the assessment report for the preceding
year to the municipal cybersecurity department by the end of January each year. As of the date of this prospectus, the Draft Measures
for Internet Data Security has not been formally adopted. However, if the Draft Measures for Internet Data Security were to be enacted
in the current form, we, as an overseas listed company, will be required to conduct an annual data security review and comply with the
relevant reporting obligations. Furthermore, according to the Draft Measures for Internet Data Security, data processors shall, in accordance
with relevant state provisions, apply for cyber security review when carrying out the following activities: (1) the merger, reorganization
or separation of internet platform operators that have acquired a large number of data resources related to national security, economic
development or public interests, which affects or may affect national security, (2) data processors that handle the personal information
of more than one million people intends to be listed abroad, (3) the data processor intends to be listed in Hong Kong, which affects
or may affect national security, and (4) other data processing activities that affect or may affect national security. It remains uncertain
whether the requirement of cybersecurity review applies to follow-on offerings by an overseas-listed online platform operator that possesses
personal data of more than one million users. Considering the substantial uncertainties existing with respect to the enactment timetable,
final content, interpretation and implementation of the Draft Measures for Internet Data Security, in particular with respect to the
explanation or interpretation for “affects or may affect national security,” there remain uncertainties as to whether our
data processing activities may be deemed to affect national security, thus subjecting us to a cybersecurity review. As of the date of
this prospectus, we have not received any formal notice from any cybersecurity regulator that we shall be subject to a cybersecurity
28, 2021, the CAC and 12 other government authorities published the Measures for Cybersecurity Review, which took effect on February
15, 2022. The Measures for Cybersecurity Review provides that certain operators of critical information infrastructure purchasing internet
products and services or network platform operators carrying out data processing activities, which affect or may affect national security,
must apply with the Cybersecurity Review Office for a cybersecurity review. On July 30, 2021, the State Council promulgated the Regulations
on Protection of Critical Information Infrastructure, which became effective on September
1, 2021. Pursuant to the Regulations on Protection of Critical Information Infrastructure, critical information infrastructure shall
mean any important network facilities or information systems of an important industry or field, such as public communication and information
service, energy, communications, water conservation, finance, public services, e-government affairs and national defense science, and
any other important network facilities or information system which may endanger national security, people’s livelihoods and public
interest in the event of damage, function loss or data leakage. In addition, relevant administrative departments of each critical industry
and sector, shall be responsible to formulate eligibility criteria and determine the critical information infrastructure operator in
the respective industry or sector. The operators shall be informed about the final determination as to whether they are categorized as
critical information infrastructure operators. As of the date of this prospectus, the exact scope of “critical information infrastructure
operators” under the current regulatory regime remains unclear, and we have not been informed that we are identified as a critical
information infrastructure operator by any governmental authorities. Furthermore, since the Measures for Cybersecurity Review is relative
new and the determination of “affecting national security” are subject to further explanations and interpretations, there
remain uncertainties as to whether our data processing activities may be deemed to affect national security and whether we would be required
to apply for a cybersecurity review. We will continue to closely monitor the rule-making process and will assess and determine whether
we are required to apply for the cybersecurity review. If we are identified as an operator of “critical information infrastructure,”
we would be required to fulfill various obligations as required under PRC cybersecurity laws and other applicable laws for such operators
of “critical information infrastructure,” and we may be subject to cybersecurity review procedure before making certain purchases
of network products and services, which could lead to adverse impacts on our business and a diversion of time and attention of our management
and our other resources. Furthermore, there can be no assurance that we will obtain the clearance or approval for these applications
from the Cybersecurity Review Office and the relevant regulatory authorities in a timely manner, or at all. If we are found to be in
violation of cybersecurity requirements in China, the relevant governmental authorities may conduct investigations, levy fines, or require
us to change our business practices in a manner materially adverse to our business. Any of these actions may disrupt our operations and
adversely affect our business, results of operations and financial condition.
with these obligations could cause us to incur substantial costs. As the interpretation and application of China’s cybersecurity
laws, regulations and standards are still uncertain and evolving, we may be required to make further adjustments to our and the VIEs’
business practices to comply with the enacted form of the laws, which may increase our compliance cost and adversely affect our business
performance. We expect that there will continue to be new proposed laws, rules of self-regulatory bodies, regulations and industry standards
concerning privacy, data protection and information security in the PRC, and we cannot yet determine the impact such future laws, rules,
regulations and standards may have on our business.
we may not disclose any personal data or information, unless required by the competent PRC authorities through certain procedures required
by the laws, for the purpose of, among others, safeguarding the national security, investigating crimes, investigating infringement of
information network communications rights, or cooperating with the supervision and inspection of telecommunications regulatory authorities.
Failure to comply with these requirements could subject us to fines and penalties.
Uncertainties with respect to the PRC legal system could have a material
adverse on us and the VIEs.
The PRC legal system is a civil law system based
on written statutes. Unlike the common law system, prior court decisions in a civil law system
may be cited as reference but have limited precedential value. Since 1979, newly introduced PRC laws and regulations have significantly
enhanced the protections of interest relating to foreign investments in mainland China. However, since these laws and regulations are
relatively new and the PRC legal system continues to evolve rapidly, the interpretations of such laws and regulations may not always
be consistent, and enforcement of these laws and regulations involves significant uncertainties, any of which could limit the available
In addition, the PRC administrative and judicial
authorities have significant discretion in interpreting, implementing or enforcing statutory rules and contractual terms, and it may
be more difficult to predict the outcome of administrative and judicial proceedings and the level of legal protection we and the VIEs
may enjoy in the PRC than under some more developed legal systems. Furthermore, the PRC legal system is based in part on government policies
and internal rules (some of which are not published in a timely manner or at all) that may
have retroactive effect. These uncertainties may affect our decisions on the policies and actions to be taken to comply with PRC laws
and regulations, and may affect our and the VIEs’ ability to enforce our and their contractual or tort rights, respectively. In
addition, the regulatory uncertainties may be exploited through unmerited legal actions or threats in an attempt to extract payments
or benefits from us or the VIEs. Such uncertainties may therefore increase our and the VIEs’ operating expenses and costs, and
materially and adversely affect our and the VIEs’ business and results of operations.
You may experience difficulties in effecting service of legal process,
enforcing foreign judgments, or bringing actions in China against us or our management named in the prospectus based on foreign laws.
It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.
Planet Green is not an
operating company in the PRC but a Nevada holding company with its operations conducted through its subsidiaries in the PRC, Hong Kong
and Canada and through contractual arrangements with its variable interest entities, or VIEs. Currently a majority of our senior executive
officers and all directors either reside within China or Hong Kong, are physically there for a significant portion of each year, and
are PRC nationals. As a result, it may be difficult for you to effect service of process upon us or those persons inside mainland China.
In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us
or such persons predicated upon the civil liability provisions of U.S. securities laws or those of any U.S. state.
The recognition and enforcement
of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments
in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country
where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of
written arrangement with the U.S. that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according
to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers
if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security, or public interest. As
a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the U.S.
It may also be difficult
for you or overseas regulators to conduct investigations or collect evidence within China. For example, in China, there are significant
legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with
respect to foreign entities. Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts
of another country or region to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities
regulatory authorities in the U.S. may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to
Article 177 of the PRC Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator
is allowed to directly conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further
provides that Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities
to foreign agencies without prior consent from the securities regulatory authority of the PRC State Council and the competent departments
of the PRC State Council. While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability
for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase
difficulties faced by you in protecting your interests.
Risks Related to our Common Stock
Our common stock may be subject now
and in the future to the SEC’s “Penny Stock” rules.
We may be subject now and in the future to
the SEC’s “penny stock” rules if our shares of common stock sell below $5.00 per share. Penny stocks generally are
equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure
document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market.
The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson and monthly account statements showing the market value of each penny stock held in the customer’s account.
The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or
in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation.
In addition, the penny stock rules require
that prior to a transaction; the broker dealer must make a special written determination that the penny stock is a suitable investment
for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may
reduce purchases of any offerings and reduce the trading activity for shares of our common stock. As long as our shares of common stock
are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to sell their securities.
We do not intend to pay dividends for
the foreseeable future.
We currently intend to retain any future earnings
to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.
As a result, you may only receive a return on your investment in our shares of common stock if the market price of our shares of common
If securities or industry analysts do
not publish research or reports about our business, or if they publish a negative report regarding our shares of common stock, the price
of our shares of common stock and trading volume could decline.
The trading market for our shares of common
stock may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not
have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our shares of common stock
would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could
lose visibility in the financial markets, which could cause the price of our shares of common stock and the trading volume to decline.
The market price of our shares of common
stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above
the offering price.
If you purchase our shares of common stock,
you may not be able to resell those shares at or above the offering price. The market price of our shares of common stock may fluctuate
significantly in response to numerous factors, many of which are beyond our control, including:
| ● || actual
or anticipated fluctuations in our revenue and other operating results;
financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; |
of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow
our company or our failure to meet these estimates or the expectations of investors; |
by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint
ventures or capital commitments; |
and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; |
threatened or filed against us; and |
events or factors, including those resulting from war or incidents of terrorism, or responses to these events. |
In addition, the stock markets have experienced
extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies.
In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become
involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our
business and adversely affect our business.
may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series. We
may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit agreements
with a unit agent. Each unit agent will be a bank or trust company that we select. We will indicate the name and address of the unit
agent in the applicable prospectus supplement relating to a particular series of units.
following description, together with the additional information included in any applicable prospectus supplement, summarizes the general
features of the units that we may offer under this prospectus. You should read any prospectus supplement and any free writing prospectus
that we may authorize to be provided to you related to the series of units being offered, as well as the complete unit agreements that
contain the terms of the units. Specific unit agreements will contain additional important terms and provisions and we will file as an
exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference from another report that we
file with the SEC, the form of each unit agreement relating to units offered under this prospectus.
we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including, without
limitation, the following, as applicable:
of the series of units;|
and description of the separate constituent securities comprising the units;|
or prices at which the units will be issued;|
if any, on and after which the constituent securities comprising the units will be separately
of certain U.S. federal income tax considerations applicable to the units; and|
terms of the units and their constituent securities.|
Delivery and Form
we indicate differently in any applicable prospectus supplement or free writing prospectus, each debt security, warrant and unit initially
will be issued in book-entry form and represented by one or more global notes or global securities, or, collectively, global securities.
The global securities will be deposited with, or on behalf of, The Depository Trust Company, New York, New York, as depositary, or DTC,
and registered in the name of Cede & Co., the nominee of DTC. Unless and until it is exchanged for individual certificates evidencing
securities under the limited circumstances described below, a global security may not be transferred except as a whole by the depositary
to its nominee or by the nominee to the depositary, or by the depositary or its nominee to a successor depositary or to a nominee of
the successor depositary.
has advised us that is:
trust company organized under the New York Banking Law;|
organization” within the meaning of the New York Banking Law;|
of the Federal Reserve System;|
corporation” within the meaning of the New York Uniform Commercial Code; and|
agency” registered pursuant to the provisions of Section 17A of the Exchange Act.|
holds securities that its participants deposit with DTC. DTC also facilitates the settlement among its participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants’ accounts,
thereby eliminating the need for physical movement of securities certificates. “Direct participants” in DTC include securities
brokers and dealers, including underwriters, banks, trust companies, clearing corporations and other organizations. DTC is a wholly-
owned subsidiary of The Depository Trust & Clearing Corporation, or DTCC. DTCC is the holding company for DTC, National Securities
Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users
of its regulated subsidiaries. Access to the DTC system is also available to others, which we sometimes refer to as indirect participants,
that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. The rules applicable
to DTC and its participants are on file with the SEC.
of securities under the DTC system must be made by or through direct participants, which will receive a credit for the securities on
DTC’s records. The ownership interest of the actual purchaser of a security, which we sometimes refer to as a beneficial owner,
is in turn recorded on the direct and indirect participants’ records. Beneficial owners of securities will not receive written
confirmation from DTC of their purchases. However, beneficial owners are expected to receive written confirmations providing details
of their transactions, as well as periodic statements of their holdings, from the direct or indirect participants through which they
purchased securities. Transfers of ownership interests in global securities are to be accomplished by entries made on the books of participants
acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in the
global securities, except under the limited circumstances described below.
facilitate subsequent transfers, all global securities deposited by direct participants with DTC will be registered in the name of DTC’s
partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of securities
with DTC and their registration in the name of Cede & Co. or such other nominee will not change the beneficial ownership of the securities.
DTC has no knowledge of the actual beneficial owners of the securities. DTC’s records reflect only the identity of the direct participants
to whose accounts the securities are credited, which may or may not be the beneficial owners. The participants are responsible for keeping
account of their holdings on behalf of their customers.
long as the securities are in book-entry form, you will receive payments and may transfer securities only through the facilities of the
depositary and its direct and indirect participants. We will maintain an office or agency in the location specified in the prospectus
supplement for the applicable securities, where notices and demands in respect of the securities and the indenture may be delivered to
us and where certificated securities may be surrendered for payment, registration of transfer or exchange.
of notices and other communications by DTC to direct participants, by direct participants to indirect participants and by direct participants
and indirect participants to beneficial owners will be governed by arrangements among them, subject to any legal requirements in effect
from time to time.
notices will be sent to DTC. If less than all of the securities of a particular series are being redeemed, DTC’s practice is to
determine by lot the amount of the interest of each direct participant in the securities of such series to be redeemed.
DTC nor Cede & Co. (or such other DTC nominee) will consent or vote with respect to the securities. Under its usual procedures, DTC
will mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns the consenting or voting rights
of Cede & Co. to those direct participants to whose accounts the securities of such series are credited on the record date, identified
in a listing attached to the omnibus proxy.
long as securities are in book-entry form, we will make payments on those securities to the depositary or its nominee, as the registered
owner of such securities, by wire transfer of immediately available funds. If securities are issued in definitive certificated form under
the limited circumstances described below and if not otherwise provided in the description of the applicable securities herein or in
the applicable prospectus supplement, we will have the option of making payments by check mailed to the addresses of the persons entitled
to payment or by wire transfer to bank accounts in the United States designated in writing to the applicable trustee or other designated
party at least 15 days before the applicable payment date by the persons entitled to payment, unless a shorter period is satisfactory
to the applicable trustee or other designated party.
proceeds, distributions and dividend payments on the securities will be made to Cede & Co., or such other nominee as may be requested
by an authorized representative of DTC. DTC’s practice is to credit direct participants’ accounts upon DTC’s receipt
of funds and corresponding detail information from us on the payment date in accordance with their respective holdings shown on DTC records.
Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with
securities held for the account of customers in bearer form or registered in “street name.” Those payments will be the responsibility
of participants and not of DTC or us, subject to any statutory or regulatory requirements in effect from time to time. Payment of redemption
proceeds, distributions and dividend payments to Cede & Co., or such other nominee as may be requested by an authorized representative
of DTC, is our responsibility, disbursement of payments to direct participants is the responsibility of DTC, and disbursement of payments
to the beneficial owners is the responsibility of direct and indirect participants.
under the limited circumstances described below, purchasers of securities will not be entitled to have securities registered in their
names and will not receive physical delivery of securities. Accordingly, each beneficial owner must rely on the procedures of DTC and
its participants to exercise any rights under the securities and the indenture.
laws of some jurisdictions may require that some purchasers of securities take physical delivery of securities in definitive form. Those
laws may impair the ability to transfer or pledge beneficial interests in securities.
may discontinue providing its services as securities depositary with respect to the securities at any time by giving reasonable notice
to us. Under such circumstances, in the event that a successor depositary is not obtained, securities certificates are required to be
printed and delivered.
noted above, beneficial owners of a particular series of securities generally will not receive certificates representing their ownership
interests in those securities. However, if:
notifies us that it is unwilling or unable to continue as a depositary for the global security
or securities representing such series of securities or if DTC ceases to be a clearing agency
registered under the Exchange Act at a time when it is required to be registered and a successor
depositary is not appointed within 90 days of the notification to us or of our becoming aware
of DTC’s ceasing to be so registered, as the case may be;|
in our sole discretion, not to have such securities represented by one or more global securities;
of default has occurred and is continuing with respect to such series of securities,|
will prepare and deliver certificates for such securities in exchange for beneficial interests in the global securities. Any beneficial
interest in a global security that is exchangeable under the circumstances described in the preceding sentence will be exchangeable for
securities in definitive certificated form registered in the names that the depositary directs. It is expected that these directions
will be based upon directions received by the depositary from its participants with respect to ownership of beneficial interests in the
so provided in the applicable prospectus supplement, you may hold interests in a global security through Clearstream Banking S.A., or
Clearstream, or Euroclear Bank S.A./N.V., as operator of the Euroclear System, or Euroclear, either directly if you are a participant
in Clearstream or Euroclear or indirectly through organizations which are participants in Clearstream or Euroclear. Clearstream and Euroclear
will hold interests on behalf of their respective participants through customers’ securities accounts in the names of Clearstream
and Euroclear, respectively, on the books of their respective U.S. depositaries, which in turn will hold such interests in customers’
securities accounts in such depositaries’ names on DTC’s books.
and Euroclear are securities clearance systems in Europe. Clearstream and Euroclear hold securities for their respective participating
organizations and facilitate the clearance and settlement of securities transactions between those participants through electronic book-entry
changes in their accounts, thereby eliminating the need for physical movement of certificates.
deliveries, transfers, exchanges, notices and other matters relating to beneficial interests in global securities owned through Euroclear
or Clearstream must comply with the rules and procedures of those systems. Transactions between participants in Euroclear or Clearstream,
on one hand, and other participants in DTC, on the other hand, are also subject to DTC’s rules and procedures.
will be able to make and receive through Euroclear and Clearstream payments, deliveries, transfers and other transactions involving any
beneficial interests in global securities held through those systems only on days when those systems are open for business. Those systems
may not be open for business on days when banks, brokers and other institutions are open for business in the United States.
transfers between participants in DTC, on the one hand, and participants in Euroclear or Clearstream, on the other hand, will be effected
through DTC in accordance with the DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by their respective U.S. depositaries;
however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the
counterparty in such system in accordance with the rules and procedures and within the established deadlines (European time) of such
system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions
to its U.S. depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the global securities
through DTC, and making or receiving payment in accordance with normal procedures for same-day fund settlement. Participants in Euroclear
or Clearstream may not deliver instructions directly to their respective U.S. depositaries.
to time zone differences, the securities accounts of a participant in Euroclear or Clearstream purchasing an interest in a global security
from a direct participant in DTC will be credited, and any such crediting will be reported to the relevant participant in Euroclear or
Clearstream, during the securities settlement processing day (which must be a business day for Euroclear or Clearstream) immediately
following the settlement date of DTC. Cash received in Euroclear or Clearstream as a result of sales of interests in a global security
by or through a participant in Euroclear or Clearstream to a direct participant in DTC will be received with value on the settlement
date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or
Clearstream following DTC’s settlement date.
information in this section of this prospectus concerning DTC, Clearstream, Euroclear and their respective book-entry systems has been
obtained from sources that we believe to be reliable, but we do not take responsibility for this information. This information has been
provided solely as a matter of convenience. The rules and procedures of DTC, Clearstream and Euroclear are solely within the control
of those organizations and could change at any time. Neither we nor the trustee nor any agent of ours or of the trustee has any control
over those entities and none of us takes any responsibility for their activities. You are urged to contact DTC, Clearstream and Euroclear
or their respective participants directly to discuss those matters. In addition, although we expect that DTC, Clearstream and Euroclear
will perform the foregoing procedures, none of them is under any obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time. Neither we nor any agent of ours will have any responsibility for the performance or nonperformance
by DTC, Clearstream and Euroclear or their respective participants of these or any other rules or procedures governing their respective
Effects of Provisions of Our Articles of Incorporation, our Bylaws and Nevada Law.
provisions contained in the Articles, the Bylaws and Nevada law could delay, deter or discourage some transactions involving an actual
or potential change in control of Planet Green, including acquisition of us by means of a tender offer; acquisition of us by means of
a proxy contest or otherwise; or removal of our incumbent officers and directors. These provisions, summarized below, are expected to
discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking
to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of its
potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the
disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.
of Incorporation and Bylaws
Articles authorizes our board of directors to establish one or more series of preferred stock and to determine, with respect to any series
of preferred stock, the preferences, rights and other terms of such series. See “—Preferred Stock” for additional information.
Under this authority, our board of directors could create and issue a series of preferred stock with rights, preferences or restrictions
that have the effect of discriminating against an existing or prospective holder of our capital stock as a result of such holder beneficially
owning or commencing a tender or exchange offer for a substantial amount of common stock. One of the effects of authorized but unissued
and unreserved shares of preferred stock may be to render it more difficult for, or to discourage an attempt by, a potential acquiror
to obtain control of us by means of a merger, tender or exchange offer, proxy contest or otherwise, and thereby protect the continuity
of the company’s management. The issuance of shares of preferred stock may have the effect of delaying, deferring or preventing a change
in control of us without any action by our stockholders.
Articles and the Bylaws provide that the directors, other than those who may be elected by the holders of any series of preferred stock
under specified circumstances, shall be divided into three classes. Such classes shall be as nearly equal in number of directors as reasonably
possible. The election of the classes is staggered, such that only approximately one third of our board of directors is up for election
in any given year. Each director shall serve for a term ending on the third annual meeting of stockholders following the annual meeting
of stockholders at which such director was elected. Each director shall serve until such director’s successor shall have become duly
elected and qualified, or until such director’s prior death, resignation, retirement, disqualification or other removal.
Articles does not provide for cumulative voting in the election of directors. Accordingly, the holders of a majority of the shares of
our common stock entitled to vote in any election of directors can elect all of the directors standing for election.
Articles provides that any vacancy occurring on our board of directors will be filled by a majority of directors then in office, even
if less than a quorum. The Articles also provides that our directors can only be removed for cause upon the vote of more than two- thirds
of the votes entitled to be cast by holders of all the then-outstanding shares of capital stock, voting together as a single class.
of Stockholders; Number of Directors and No Action by Written Consent of Stockholders
Articles and the Bylaws provide that only the board of directors, the chairman of the board of directors or the president may call a
special meeting of our stockholders. The Bylaws provide that the authorized number of directors be changed only by resolution of the
board of directors. The Bylaws provide that the stockholders may act only duly called annual or special meeting and no action may be
effected by written consent.
of Shareholder Nominations and Proposals
amended and restated bylaws establish advance notice procedures with respect to shareholder proposals and the nomination of persons for
election as directors, other than nominations made by or at the direction of our board of directors.
to Articles and Bylaws
amendment of any of the above provisions (except for the provision making it possible for the board of directors to issue undesignated
preferred stock) and the exclusive form and indemnification provisions described below, would require approval by a stockholder vote
by the holders of at least a two thirds of the voting power of the then outstanding voting stock.
We may currently be, or in the
future become, subject to the provisions of the Nevada Revised Statutes regarding the acquisition of controlling interest (the “Controlling
Interest Law”). A corporation is subject to the Controlling Interest Law if it has more than 200 stockholders of record, at least
100 of whom are residents of Nevada, and if the corporation does business in Nevada, directly or through an affiliated corporation. The
Controlling Interest Law may have the effect of discouraging corporate takeovers. As of September 1, 2021, we had no stockholders of record
who are residents of Nevada.
The Controlling Interest Law focuses
on the acquisition of a “controlling interest,” which means the ownership of outstanding voting shares that would be sufficient,
but for the operation of law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation
in the election of directors: (1) one-fifth or more but less than one-third; (2) one-third or more but less than a majority; or (3) a
majority or more. The ability to exercise this voting power may be direct or indirect, as well as individual or in association with others.
The effect of the Controlling
Interest Law is that an acquiring person, and those acting in association with such person, will obtain only such voting rights in the
controlling interest as are conferred by a resolution of (1) a majority of the stockholders of the corporation and, if applicable (2)
a majority of each class or series of outstanding shares of which the acquisition would adversely affect or alter a preference or relative
or other right, approved at a special or annual stockholders’ meeting. The Controlling Interest Law contemplates that voting rights
will be considered only once by the other stockholders. Thus, there is no authority to take away voting rights from the control shares
of an acquiring person once those rights have been approved in accordance with the Controlling Interest Law. However, if the stockholders
do not grant voting rights to the shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The
acquiring person is free to sell the shares to others, and so long as the subsequent buyer or buyers of those shares themselves do not
acquire a controlling interest, those shares would not be governed by the Controlling Interest Law.
If control shares are accorded
full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, a stockholder of
record, other than the acquiring person, who did not vote in favor of approval of voting rights, is entitled to dissent to the acquisition
and demand fair value for such stockholder’s shares pursuant to applicable provisions of Chapter 92 of the Nevada Revised Statutes
governing rights and procedures for dissenting stockholders.
In addition to the Controlling
Interest Law, Nevada has a business combination law, which prohibits certain business combinations between Nevada publicly traded corporations
and any “interested stockholder” for two years after the interested stockholder first becomes an interested stockholder, unless
the board of directors of the corporation approved the combination before the person became an interested stockholder or the corporation’s
board of directors approves the transaction and at least 60% of the corporation’s disinterested stockholders approve the combination
at an annual or special meeting thereof. For purposes of Nevada law, an interested stockholder is any person who is: (a) the beneficial
owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the corporation, or (b) an affiliate
or associate of the corporation and at any time within the previous two years was the beneficial owner, directly or indirectly, of 10%
or more of the voting power of the then-outstanding shares of the corporation. The definition of “combination” contained in
the statute is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation’s
assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other
The effect of Nevada’s business
combination law is to potentially discourage parties interested in taking control of the Company from doing so if they cannot obtain the
approval of our Board or stockholders.
In addition, under Nevada law
directors may be removed only by the vote of stockholders representing not less than two-thirds of the voting power of the issued and
outstanding stock entitled to vote, which could also have an anti-takeover effect.
Articles includes provisions that limit the liability of our directors for monetary damages for breach of their fiduciary duty as directors,
except for liability that cannot be eliminated under the Nevada Business Corporation Act (NBCA). Accordingly, our directors will not
be personally liable for monetary damages for breach of their fiduciary duty as directors, except for liabilities:
|| for unlawful misconduct, as provided under Section 35.230 of the NBCA,
or the officer’s or director’s actions or failures to act constituted a breach of his or her fiduciary duties as a director
or officer and such actions or failures to act involved intentional misconduct, fraud or a knowing violation of law, as provided
under Section 78.138 of the NBCA; or |
transaction from which the director derived an improper personal benefit.|
amendment or repeal of these provisions will require the approval of the holders of shares representing at least two-thirds of the shares
entitled to vote in the election of directors, voting as one class. The Articles and Bylaws provide that we will indemnify our directors
and officers to the fullest extent permitted by Delaware law. The Articles and Bylaws also permit us to purchase insurance on behalf
of any officer, director, employee or other agent for any liability arising out of his or her actions as its officer, director, employee
or agent, regardless of whether Delaware law would permit indemnification. We have entered into separate indemnification agreements with
our directors and executive officers that require us, among other things, to indemnify them against certain liabilities that may arise
by reason of their status or service as directors and to advance their expenses incurred as a result of any proceeding against them as
to which they could be indemnified. We believe that the limitation of liability provision in the Articles and the indemnification agreements
facilitate our ability to continue to attract and retain qualified individuals to serve as directors and officers.
limitation of liability and indemnification provisions in the Articles and Bylaws may discourage stockholders from bringing a lawsuit
against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors
and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may be harmed to
the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.