10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2018

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No.001-34449

AMERICAN LORAIN CORPORATION
(Exact name of registrant as specified in its charter)

Nevada	87-0430320
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

BeihuanZhong Road
Junan County
Shandong, People’s Republic of China, 276600
(Address, including zip code, of principal executive offices)

(86) 539-7317959
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]        No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X]        No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]      Accelerated filer [   ]      Non-accelerated filer [   ]      Smaller reporting company [X]      Emerging Growth Company [   ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [   ]        No [X]

The numbers of shares outstanding of the issuer’s class of common stock as of June 30, 2018 was 64,824,490.

FORM 10-Q
For the Quarterly Period Ended June 30, 2018

TABLE OF CONTENTS

	PAGE
PART I - FINANCIAL INFORMATION	F-1
ITEM 1 FINANCIAL STATEMENTS	F-1
ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	8
ITEM 4 CONTROLS AND PROCEDURES	8
PART II - OTHER INFORMATION	10
ITEM 1 LEGAL PROCEEDINGS	10
ITEM 1A RISK FACTORS	10
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	10
ITEM 3 DEFAULTS UPON SENIOR SECURITIES	10
ITEM 4 MINE SAFETY DISCLOSURES .	10
ITEM 5 OTHER INFORMATION	10
ITEM 6 EXHIBITS	11
SIGNATURES	13

Caution Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to the factors described in the section captioned “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission.

In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” or the negative of such terms or other similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Use of Certain Defined Terms

Except where the context otherwise requires and for the purposes of this report only:

1.    “We,” “us” and “our” refer to ALN, and except where the context requires otherwise, our wholly-owned and majority-owned direct and indirect operating subsidiaries.

2.    “ALN” refers to American Lorain Corporation, a Nevada corporation (formerly known as Millennium Quest, Inc.).

3.    “Athena” refers to Athena*, a limited liability company organized under the laws of France that is majority- owned by Junan Hongrun.

i

4.    “ILH” refers to International Lorain Holding, Inc., a Cayman Islands company that is wholly - owned by ALN.

5.    “Junan Hongrun” refers to Junan Hongrun Foodstuff Co., Ltd.

6.    “Luotian Lorain” refers to Luotian Lorain Co., Ltd.

7.    “Beijing Lorain” refers to Beijing Lorain Co., Ltd.

8.    “Shandong Lorain” refers to Shandong Lorain Co., Ltd.

9.    “Dongguan Lorain” refers to Dongguan Lorain Co., Ltd.

10. “Shandong Greenpia” refers to Shandong Greenpia Foodstuff Co., Ltd.

11. “Shenzhen Lorain**” refers to Lorain Foodstuff (Shenzhen) Co., Ltd.

12. “RMB” refers to Renminbi, the legal currency of China.

13. “U.S. dollar”, “$” and “US$” refer to the legal currency of the United States.

14. “China” and “PRC” refer to the People’s Republic of China (excluding Hong Kong and Macau).

*On August 8, 2015, the Company re-organized its French operations by merging the operations of Conserverie Minerve into its immediate parent and 100% shareholder Athena, and concurrently, Athena wound up and dissolved Conserverie Minerve. Athena subsequently changed its own legal name to Conservie Minerve to continue its business.

**On December 14, 2017, the Company formed Shenzhen Lorain as a limited company under the laws of the PRC. Through Shandong Greenpia, the Company entered into exclusive arrangements with Shenzhen Lorain and its shareholders that give the Company the ability to substantially influence Shenzhen Lorain’s daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of Shenzhen Lorain and it consolidates its accounts as a VIE.

ii

ITEM 1. Financial Statements

AMERICAN LORAIN CORPORATION

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2018 AND DECEMBER 31, 2017

(Stated in US Dollars)

CONTENTS	PAGES
Report of Independent Registered Public Accounting Firm	F-2
Unaudited Condensed Consolidated Balance Sheets	F-3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss	F-4
Unaudited Condensed Consolidated Statements of Cash Flows	F-5
Notes to Financial Statements	F-6 to F-20

F-1

AMERICAN LORAIN CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 2018 AND DECEMBER 31, 2017
(Stated in US Dollars)

		2018			2017
Assets		(Unaudited)
Current assets
Cash and cash equivalents	$	385,324		$	85,493
Trade receivables, net		1,254,877			729,919
Inventories		10,499,705			10,593,403
Advances and prepayments to suppliers		1,700,587			3,129,435
Other receivables and other current assets		1,777,732			1,612,682
Discontinued operations – current assets held for sale		3,871,313			790,550
Total current assets	$	19,489,538		$	16,941,482
Non-current assets
Plant and equipment, net		16,640,921			36,663,290
Intangible assets, net		11,275,408			13,167,870
Construction in progress, net		805,693			819,301
Discontinued operations – long term assets held for sale		21,572,848			896,099
Total Assets	$	69,784,408		$	68,488,042
Liabilities and Stockholders’ Equity
Current liabilities
Short-term bank loans	$	12,123,886		$	23,773,780
Long-term debt – current portion		9,359,792			30,511,656
Capital lease – current portion		1,056,976			1,074,829
Accounts payable		1,444,353			4,150,604
Taxes payable		-			355,142
Accrued liabilities and other payables		4,543,503			9,317,038
Customers deposits		477,234			485,295
Discontinued operations - liabilities		49,637,739			9,610,994
Total current liabilities	$	78,643,483		$	79,279,338
Stockholders’ Equity
Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively	$	-		$	-
Common Stock, $0.001 par value, 200,000,000 shares authorized; 64,824,490 and 38,274,490 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively		64,825			38,275
Subscription receivable		(2,142,000	)		-
Additional paid-in capital		62,529,699			57,852,249
Statutory reserves		25,103,354			25,103,354
Accumulated deficit		(100,397,924	)		(99,628,547	)
Accumulated other comprehensive income		13,727,898			13,588,726
Non-controlling interests		(7,744,927	)		(7,745,353	)
Total Stockholders’ Equity	$	(8,859,075	)	$	(10,791,296	)
Total Liabilities and Stockholders’ Equity	$	69,784,408		$	68,488,042

See Accompanying Notes to the Financial Statements

F-3

AMERICAN LORAIN CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017
(Stated in US Dollars)

		Three months ended June 30,						For the six months ended June 30,
		2018			2017			2018			2017
Net revenues	$	636,387		$	1,176,709		$	1,653,915		$	2,956,972
Cost of revenues		70,918			1,474,231			972,409			2,978,896
Gross profit (loss)		565,469			(297,522	)		681,506			(21,924	)
Operating expenses:
Selling and marketing expenses		31,045			91,113			52,992			2,005,818
General and administrative expenses		578,216			156,555			740,603			5,980,054
Total operating expenses		609,261			247,668			793,595			7,985,872
Operating (loss) income		(43,792	)		(545,190	)		(112,089	)		(8,007,796	)
Other income (expenses):
Government subsidy		-									580,705
					-			-
Interest income		(238	)		31			248			32
Interest expense		-			(740,001	)					(1,163,264	)
								-
Other income		77,053			213,880			77,783			374,457
Other expenses		(83,764	)		(135,119	)		(87,246	)		(2,004,197	)
Loss from investment		4,965			-			4,965			-
		(1,984	)		(661,209	)		(4,250	)		(2,212,267	)
(Loss)/income before taxes from continuing operations		(45,776	)		(1,206,399	)		(116,339	)		(10,220,063	)
Provision for income taxes		-			-			-			-
(Loss)/income from continuing operations		(45,776	)		(1,206,399	)		(116,339	)		(10,220,063	)
Discontinued operations:
(Loss) income from discontinued operations		(665,658	)		(1,623,555	)		(652,612	)		(7,579,109	)
Provision for income taxes		-			-			-			-
Loss from discontinued operations, net of taxes		(665,658	)		(1,623,555	)		(652,612	)		(7,579,109	)
Net loss	$	(711,434	)	$	(2,829,954	)	$	(768,951	)	$	(17,799,172	)
Net loss attributable to:
- Common shareholders		(709,277	)		(1,763,776	)		(769,377	)		(16,359,323	)
- Non-controlling interests		(2,157	)		(266,178	)		426			(1,439,849	)
Other comprehensive income:
Foreign currency translation loss		585,224			(433,834	)		139,173			3,069,946
Comprehensive loss	$	(126,210	)	$	(3,263,788	)	$	(629,778	)	$	(14,729,226	)
(Loss) income per share from continuing operations
- Basic and diluted		(0.00	)		(0.03	)		(0.00	)		(0.27	)
Loss per share from discontinued operations
- Basic and diluted		(0.01	)		(0.04	)		(0.01	)		(0.20	)
Loss per share
- Basic and diluted		(0.01	)		(0.07	)		(0.02	)		(0.47	)
Basic and diluted weighted average shares outstanding		57,670,644			38,259,490			50,802,391			38,274,490

See Accompanying Notes to the Financial Statements

F-4

AMERICAN LORAIN CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017
(STATED IN US DOLLARS)

		For the six months ended
		June 30,
		2018			2017
Cash flows from operating activities
Loss from continuing operations	$	(116,339	)	$	(10,220,063	)
Depreciation of fixed assets		295,981			754,161
Amortization of intangible assets		137,904			761,815
Decrease in accounts and other receivables		(690,408	)		(1,045,506	)
Decrease in inventories		(524,090	)		(8,572,757	)
Decrease/(increase) in advance to suppliers		(322,664	)		19,920,095
Decrease in prepayment		(167,262	)		(1,110,935	)
(Decrease)/increase in accounts and other payables		(5,479,629	)		4,970,176
(Decrease)/increase in taxes payable		(135,131	)		51,417
(Decrease)/increase in customer deposits		(8,061	)		4,808,727
Net cash provided by (used in) operating activities		(7,009,699	)		10,317,130
Cash flows from investing activities
Decrease in restricted cash	$	-		$	182,447
Purchase of plant and equipment		(4,836	)		(2,277,031	)
Payment of construction in progress		-			(9,306,821	)
Purchase of intangible assets		-			(561,114	)
Net cash (used in) provided by investing activities		(4,836	)		(11,962,519	)
Cash flows from financing activities
Proceeds from issuance of common stock	$	2,562,000		$	-
Proceeds from bank borrowings and debentures		-			162,874
Net cash provided by financing activities		2,562,000			162,874
Net decrease in cash and cash equivalents		(4,452,535	)		(1,482,515	)
Effect of foreign currency translation on cash and cash equivalents		4,752,366			1,259,884
Cash and cash equivalents–beginning of year		85,493			407,062
Cash and cash equivalents–end of year	$	385,324		$	184,431
Supplementary cash flow information:
Interest received	$	248		$	70
Interest paid	$	-		$	513,825
Income taxes paid	$	-		$	310,820

See Accompanying Notes to the Financial Statements

F-5

AMERICAN LORAIN CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2018 AND DECEMBER 31, 2017
(Stated in US Dollars)

1.	Organization and Principal Activities
	American Lorain Corporation (the “Company” or “ALN”) is registered as a corporation in the state of Nevada. The Company conducts its primary business activities through its subsidiaries located in the People’s Republic of China. Those subsidiaries develop, manufacture, and market convenience foods, chestnut products, and frozen foods; these products are sold to both domestic markets and international markets.
2.	Summary of Significant Accounting Policies
	Method of accounting
	Management has prepared the accompanying financial statements and these notes in accordance to generally accepted accounting principles in the United States of America; the Company maintains its general ledger and journals with the accrual method accounting.
	Principles of consolidation
	The accompanying consolidated financial statements include the assets, liabilities, and results of operations of the Company, and its subsidiaries, which are listed below:

	Place of	Attributable equity	Registered
Name of Company	incorporation	interest %	capital
International Lorain Holding Inc.	Cayman Islands	100.0	$ 46,659,135
Junan Hongrun Foodstuff Co., Ltd.	PRC	100.0	44,861,741
Shandong Lorain Co., Ltd.	PRC	80.2	12,123,985
Beijing Lorain Co., Ltd.	PRC	100.0	1,540,666
Luotian Lorain Co., Ltd.	PRC	100.0	3,797,774
Shandong Greenpia Foodstuff Co., Ltd.	PRC	100.0	2,303,063
Dongguan Lorain Co., Ltd.	PRC	100.0	149,939
Lorain Foodstuff (Shenzhen) Co., Ltd.	PRC	VIE	500,000

In 2014, the Company invested $2,100,000 in Athena/Minerve Group whereby the Company controlling shareholder of Minerve. Minerve conducted operations in manufacturing, packaging and sales activities in France and import and storage operations in Portugal. During the years ended December 31, 2015, the financial position and results of operations of Minerve were accounted for as subsidiaries in the Company’s financial statements; however, during the year ended December 31, 2016, Minerve became insolvent and compelled into bankruptcy by creditors, and, ultimately liquidation. Accordingly, the Company lost control of Minerve and wrote off the value of its investment in Minerve. All receivables due by Minerve to subsidiaries still controlled by the Company have been written-off.

Management has eliminated all significant inter-company balances and transactions in preparing the accompanying consolidated financial statements. Ownership interests of subsidiaries that the Company does not wholly-own are accounted for as non-controlling interests.

F-6

American Lorain Corporation
Notes to Financial Statements

Shandong Economic Development Investment Corporation, which is a PRC state-owned entity, holds 19.8% equity interest in Shandong Lorain.

Consolidation of Variable Interest Entity

VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. Any VIE with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. Management makes ongoing reassessments of whether the Company is the primary beneficiary of Shenzhen Lorain.

On December 14, 2017, the Company formed Shenzhen Lorain as a limited company under the laws of the PRC. Through Shandong Greenpia, the Company entered into exclusive arrangements with Shenzhen Lorain and its shareholders that give the Company the ability to substantially influence Shenzhen Lorain’s daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of Shenzhen Lorain and it consolidates its accounts as a VIE. The Company’s arrangements with Shenzhen Lorain consist of the following agreements:

1.    Consultation and Service Agreement, dated December 14, 2017. Under this agreement entered into between Shandong Greenpia Foodstuff Co., Ltd. and Lorain Foodstuff (Shenzhen) Co., Ltd.

2.    Business Cooperation Agreement, dated December 14, 2017. Under this agreement entered into between Shandong Greenpia Foodstuff Co., Ltd. and Lorain Foodstuff (Shenzhen) Co., Ltd.

3.    Equity Pledge Agreement, dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd.

4.    Equity Option Agreement, dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd.

5.    Voting Rights Proxy and Financial Supporting Agreement dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd.

Discontinued operations

In 2017, the Company discontinued the operations in Shandong Lorain Co. Ltd. and Dongguan Lorain Co., Ltd. As a result, the financial results of these two subsidiaries are presented as discontinued operations.

In the first quarter of 2018, the Company’s board of directors resolved to discontinue the operations of Junan Hongrun Foodstuff Co. Ltd.

Use of estimates

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates.

F-7

American Lorain Corporation
Notes to Financial Statements

Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Investment securities

The Company classifies securities it holds for investment purposes into trading or available-for-sale. Trading securities are bought and held principally for the purpose of selling them in the near term. All securities not included in trading securities are classified as available-for-sale.

Trading and available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on trading securities are included in the net income. Unrealized holding gains and losses, net of the related tax effect, on available for sale securities are excluded from net income and are reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.

A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in carrying amount to fair value. The impairment is charged as an expense to the statement of income and comprehensive income and a new cost basis for the security is established. To determine whether impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year end, and forecasted performance of the investee.

Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective-interest method. Dividend and interest income are recognized when earned.

Trade receivables

Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

Inventories

Inventories consist of raw materials and finished goods which are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, inbound shipping costs, and allocated overhead. The Company applies the weighted average cost method to its inventory.

Advances and prepayments to suppliers

The Company makes advance payment to suppliers and vendors for the procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers the applicable amount is reclassified from advances and prepayments to suppliers to inventory.

Plant and equipment

Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. The Company’s typically applies a salvage value of 0% to 10%. The estimated useful lives of the plant and equipment are as follows:

F-8

American Lorain Corporation
Notes to Financial Statements

Buildings	20-40 years
Landscaping, plant and tree	30 years
Machinery and equipment	1-10 years
Motor vehicles	10 years
Office equipment	5 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company’s results of operations. The costs of maintenance and repairs are recognized to expenses as incurred; significant renewals and betterments are capitalized.

Construction in progress and prepayments for equipment

Construction in progress and prepayments for equipment represent direct and indirect acquisition and construction costs for plants, and costs of acquisition and installation of related equipment. Amounts classified as construction in progress and prepayments for equipment are transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Depreciation is not provided for assets classified in this account.

Land use rights

Land use rights are carried at cost and amortized on a straight-line basis over a specified period. Amortization is provided using the straight-line method over 40-50 years.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. The Company conducts an annual assessment of its goodwill for impairment. If the carrying value of its goodwill exceeds its fair value, then impairment has incurred; accordingly, a charge to the Company’s results of operations will be recognized during the period. Fair value is generally determined using a discounted expected future cash flow analysis.

Accounting for the impairment of long-lived assets

The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate the adequate profits. Impairment is present if the carrying amount of an asset is less than its expected future undiscounted cash flows.

If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed are reported at the lower of the carrying amount or fair value less costs to sell.

Statutory reserves

Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital.

F-9

American Lorain Corporation
Notes to Financial Statements

Foreign currency translation

The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are the Renminbi (RMB) and the Euro (EUR). The Company’s assets and liabilities are translated into United States dollars from RMB and EUR at year-end exchange rates, and its revenues and expenses are translated at the average exchange rate during the period. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

	6/30/2018	12/31/2017	6/30/2017
Period/year end RMB: US$ exchange rate	6.6166	6.5067	6.7744
Period/annual average RMB: US$ exchange rate	6.4568	6.6133	6.8607

The RMB is not freely convertible into foreign currencies and all foreign exchange transactions must be conducted through authorized financial institutions.

Revenue recognition

The Company recognizes revenue when persuasive evidence of arrangement exists, the price has been fixed or is determinable, the delivery has been completed and no other significant obligations of the Company exists, and collectability of payment is reasonably assured. Payments received prior to all of the foregoing criteria are recorded as customer deposits. Recorded revenue is derived from the value of goods invoiced less value-added tax (VAT).

Advertising

All advertising costs are expensed as incurred.

Shipping and handling

All outbound shipping and handling costs are expensed as incurred.

Research and development

All research and development costs are expensed as incurred.

Retirement benefits

Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as part of overhead.

Income taxes

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

Comprehensive income

The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders.

Earnings per share

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive effects of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warrants are calculated using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

F-10

American Lorain Corporation
Notes to Financial Statements

Financial instruments

The Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

• Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets.

• Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Unaudited interim financial information

These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2018.

The consolidated balance sheets and certain comparative information as of December 31, 2017 are derived from the audited consolidated financial statements and related notes for the year ended December 31, 2017 (“2017 Annual Financial Statements”), included in the Company’s 2017 Annual Report on Form 10-K. These unaudited interim condensed consolidated financial statements should be read in conjunction with the 2017 Annual Financial Statements.

Recent accounting pronouncements

In January 2017, the FASB issued guidance which simplifies the accounting for goodwill impairment. The updated guidance eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, determined in Step 1. The Company is currently evaluating the impact on the financial statements of this guidance.

F-11

American Lorain Corporation
Notes to Financial Statements

	In January 2017, the FASB amended the existing accounting standards for business combinations. The amendments clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.
	The Company is evaluated the timing and the impact of the aforesaid guidance on the financial statements.
3.	Going Concern
	The accompanying financial statements have been prepared on a going-concern basis. The going-concern basis assumes that assets will be realized and liabilities will be settled in the ordinary course of business in the amounts disclosed in the financial statements. The Company’s ability to continue as a going concern is greatly dependent on the Company’s ability to realize its non-cash current assets such as receivables and inventory into cash in order to settle its current obligations. For the six months ended June 30, 2018, the Company incurred a loss of $116,339. As of June 30, 2018, the Company had a working capital deficit of approximately $59,153,945. These conditions raised substantial doubt as to whether the Company may continue as a going concern. Management believes the actions taken below provide resources to the Company to continue as going concern and remedy the above substantial doubt.
	To improve its solvency, the Company has obtained new working capital through private placements of its common stock to qualified investors. During the three months ended March 31, 2018, the Company entered into a private placement with certain investors where it issued 7,500,000 new shares of its common stock for $1.275 million of proceeds. Management has designated the funds for use in general corporate purposes.
	For the quarter ended March 31, 2018, the Company’s board resolved to discontinue the operations of Junan Hongrun Foodstuff Co., Ltd. in order to minimize losses and focus the Company’s resources on certain operations that will generate profits and positive cash flows to the Company.
	On April 14, 2018, the Company entered into a securities purchase agreement with certain investors who agreed to invest an aggregate of $1.629 million in the Company in exchange for an aggregate of 9,050,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share.
	On April 24, 2018, the company entered into a securities purchase agreement with Xiuping Cai, who agreed to invest an aggregate of $1.8 million in the Company in exchange for an aggregate of 10,000,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share.
	See Note 12 for additional securities purchase agreements entered into by the Company following June 30, 2018.

F-12

American Lorain Corporation
Notes to Financial Statements

4.	Restricted Cash
	Restricted cash represents interest bearing deposits placed with banks to secure banking facilities in the form of loans and notes payable. The funds are restricted from immediate use and are designated for settlement of loans or notes when they become due.
5.	Trade Receivables
	The Company extends credit terms of 15 to 60 days to the majority of its domestic customers, which include third-party distributors, supermarkets and wholesalers; international customers are typically extended 90 days credit.

		6/30/2018			12/31/2017
Trade accounts receivable	$	1,905,783		$	1,534,856
Less: Allowance for doubtful accounts		(650,906	)		(804,937	)
	$	1,254,877		$	729,919
Allowance for doubtful accounts:
Beginning balance	$	(804,937	)	$	(695,547	)
Additions to allowance		-			109,390
Bad debt written-off		154,031			-
Ending balance	$	(650,906	)	$	(804,937	)

6.	Inventories
	Inventories consisted of the following as of June 30, 2018 and December 31, 2017

		6/30/2018		12/31/2017
Raw materials	$	3,090,466	$	2,846,507
Finished goods		7,409,239		7,746,896
	$	10,499,705	$	10,593,403

7.	Plant and Equipment
	Property, plant, and equipment consisted of the following as of June 30, 2018 and December 31, 2017:

		6/30/2018			12/31/2017
At Cost:
Buildings	$	20,845,876		$	47,004,352
Machinery and equipment		3,354,932			6,096,099
Office equipment		260,230			433,451
Motor vehicles		71,230			162,330
	$	24,532,268		$	53,696,232
Less: Accumulated depreciation		(7,891,347	)		(17,032,942	)
	$	16,640,921		$	36,663,290

Depreciation expense for the six months ended June 30, 2018 and 2017 was $295,981 and $754,161, respectively.

F-13

American Lorain Corporation
Notes to Financial Statements

8. Intangible Assets

		6/30/2018			12/31/2017
At Cost:
Land use rights		13,411,977			15,366,444
Utilities rights		-			-
	$	13,411,977		$	15,366,444
Less: Accumulated amortization		(2,136,569	)		(2,198,574	)
	$	11,275,408		$	13,167,870

	All land is owned by the government in China. Land use rights represent the Company’s purchase of usage rights for a parcel of land for a specified duration of time, typically 50 years. Amortization expense for the six months ended June 30, 2018 and 2017 was $137,904 and $761,815, respectively.
9.	Goodwill
	On August 8, 2015, the Company re-organized its French operations by merging the operations of Conserverie Minerve into its immediate parent Athena, and concurrently, Athena wound up and dissolved Conserverie Minerve. Athena subsequently changed its own legal name to Conserverie Minerve and to continue its business. At the date of acquisition, the net liability of Conserverie Minerve was $3,255,911(EUR 2,968,089); the purchase consideration paid for the Athena (aka Conserverie Minerve) was $2,100,000. The acquisition of Athena and its then subsidiaries gave rise to goodwill in the amount of $6,786,928. As of December 31, 2015, the surviving business entity, Conserverie Minerve, on a post merged basis, recognized net operating losses during the year ended December 31, 2015. As of December 31, 2015, the Company was unable to determine if the Conserverie Minerve would be able to generate future profit and positive operating cash flows to justify the carrying value of goodwill in the amount of $6,786,928; accordingly, the Company elected to write-off the goodwill that it had recognized during its acquisition of Conserverie Minerve. Conserverie Minerve had a goodwill of its own that had accumulated over the years as result of its acquisition of subsidiaries; at December 31, 2015, the outstanding balance was $3,219,172. As mentioned in “Note 2 - Summary of Significant Accounting Policies-Principles of Consolidation”, Conserverie Minerve has been liquidated and the Company no longer has any interest in Conserverie Minerve; accordingly, all remaining goodwill was written off during the year ended December 31, 2017.
10.	Bank Loans
	Bank loans include bank overdrafts, short-term bank loans, and current portion of long-term loan, which consisted of the following as of June 30, 2018 and December 31, 2017:

F-14

American Lorain Corporation
Notes to Financial Statements

Short-term Bank Loans		6/30/2018		12/31/2017
Loan from Industrial and Commercial Bank of China,
• Interest rate at 6.955% per annum; due 4/20/2016		3,803,758		3,838,005
• Interest rate at 4.30% per annum; due 4/30/2017		-		1,152,658
• Interest rate at 4.30% per annum; due 5/30//2017		-		1,211,059
• Interest rate at 4.30% per annum; due 6/29/2017		-		1,152,658
• Interest rate at 4.30% per annum; due 8/2/2017		-		1,014,339
Loan from China Minsheng Bank Corporation, Linyi Branch
•Interest rate at 5.98% per annum due 9/22/2016		1,509,838		1,535,340
Loan from Agricultural Bank of China, Luotian Branch
• Interest rate at 5.65% per annum due 4/22/2017		1,501,350		1,536,877
• Interest rate at 9.72% per annum due 1/14/2017		1,501,350		1,536,877
• Interest rate at 9.72% per annum due 2/4/2017		443,905		461,063
• Interest rate at 9.72% per annum due 9/7/2017		90,681		92,213
Bank of Ningbo,
• Interest rate at 7.80% per annum due 10/27/2016		1,209,080		1,229,502
Hankou Bank, Guanggu Branch,
• Interest rate at 6.85% per annum due 10/24/2016		1,368,702		1,391,820
Postal Savings Bank of China,
• Interest rate at 9.72% per annum due 7/27/2016		392,951		399,588
China Construction Bank,
• Interest rate at 6.18% per annum due 11/29/2016		-		768,439
Huaxia Bank,
• Interest rate at 5.66% per annum due 5/19/2017		-		1,536,877
City of Linyi Commercial Bank, Junan Branch,
• Interest rate at 8.4% per annum due 2/16/2016		-		1,535,334
• Interest rate at 8.4% per annum due 11/24/2016		-		3,073,756
Hubei Jincai Credit and Financial Services Co. Ltd.
• Interest rate at 9.00% per annum due 1/12/2017		302,270		307,375
	$	12,123,886	$	23,773,780

F-15

American Lorain Corporation
Notes to Financial Statements

	The short-term loans, which are denominated in Renminbi and Euros, were primarily obtained for general working capital. If not otherwise specifically indicated above, short-term bank loans are guaranteed either by other companies within the group, or by personnel in senior management positions within the group. As of June 30, 2018, all short-term loans have been in default and have not been repaid. The Company is in negotiations to renew these loans or modify the repayment terms and principal amount due. The short-term loans, which are denominated in Renminbi, were primarily obtained for general working capital. If not otherwise specifically indicated above, short-term bank loans are guaranteed either by other companies within the group, or by personnel in senior management positions within the group.
11.	Current Portion – Long Term Debt
	Current portions of notes payable, debentures, and long-term debt consisted of the following as of June 30, 2018 and December 31, 2017:

		6/30/2018		12/31/2017
Debenture issued by 5 private placement holders underwritten by Guoyuan Securities Co., Ltd.
• Interest rate at 10% per annum due 8/28/2016	$	9,359,792	$	9,517,882
Debenture issued by 2 private placement holders underwritten by Daiwa SSC Securities Co. Ltd.
• Interest rate at 9.5% per annum due 11/8/2015		-		15,368,774
Loans from Deutsche Investitions-und Entwicklungsgesellschaft mbH (“DEG”)
• Interest rate at 5.510% per annum due 3/15/2015		-		1,875,000
• Interest rate at 5.510% per annum due 9/15/2015		-		1,875,000
• Interest rate at 5.510% per annum due 3/15/2016		-		1,875,000
	$	9,359,792	$	30,511,656

The Company began repaying principal and interest on the loan with DEG in semi-annual installments on December 15, 2012. As of June 30, 2018 and December 31, 2017, the Company had not repaid any principal nor interest. The loan was collateralized with the following terms:

(a.)	A first ranking mortgage in the amount of about USD $12,000,000 on the Company’s land and building in favor of DEG.
(b.)	A share pledge, by Mr. Si Chen (a major shareholder, and Chairman and CEO of the Company) as the sponsor of the loan, to secure approximately USD $12,000,000 of the loan. The Company defaulted on its loan with DEG; accordingly, on December 7, 2016, DEG exercised its rights to foreclose on 10,794,066 shares pledged by Mr. Si Chen. The loan remains outstanding.
(c.)	The total amount of the first ranking mortgage as indicated in the Loan Agreement (Article 12(1)(a)) and the value of the pledged shares by Mr. Si Chen (Loan Agreement (Article 12(1)(a))) should be at least USD 24,000,000 in aggregate.
(d.)	A personal guarantee by Mr. Si Chen in form and substance satisfactory to DEG.

The Company is in default of the debentures that were issued by Guoyuan Securities and Daiwa SSC Securities and negotiating with the debenture holders to extend repayment terms.

F-16

American Lorain Corporation
Notes to Financial Statements

12.	Equity
	On December 28, 2017, the Company entered into a securities purchase agreement, pursuant to which Yi Li and Beili Zhu, each an individual residing in the People’s Republic of China, agreed to invest an aggregate of $1.275 million in the Company in exchange for an aggregate of 7,500,000 shares of the Company’s common stock, representing a purchase price of $0.17 per share. The transaction closed on January 23, 2018.
	On April 14, 2018, the Company entered into a securities purchase agreement, pursuant to which Zongqi Shi, Aidi Zhang, Qiong Chen, Yi Li, Beili Zhu, Yanbo Wang, Jinhui Chen and Guoyang Zeng, each an individual residing in the People’s Republic of China, agreed to invest an aggregate of $1.629 million in the Company in exchange for an aggregate of 9,050,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share. As of June 30, 2018, there is $342,000 subscription receivable from this transaction and the funds were subsequently received on August 13, 2018.
	On April 24, 2018, the Company entered into a securities purchase agreement, pursuant to which Xiupin Cai, an individual residing in the People’s Republic of China, agreed to invest an aggregate of $1,800,000 in the Company in exchange for an aggregate of 10,000,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share. As of June 30, 2018, there is $1,800,000 subscription receivable from this transaction and the funds were subsequently received on August 13, 2018.
	See Note 12 for additional securities purchase agreements entered into by the Company following June 30, 2018.
	There were 64,824,490 shares of common stock outstanding as of June 30, 2018.
	For the six months ended June 30, 2017 and 2018, the Company had not issued shares as stock compensation to employees.
13.	Income Taxes
	All of the Company’s continuing operations are located in the PRC. The corporate income tax rate in the PRC is 25%.
	The following tables provide the reconciliation of the differences between the statutory and effective tax expenses following as of June 30, 2018 and 2017:

		6/30/2018			6/30/2017
Loss attributed to PRC continuing operations	$	(116,339	)	$	(8,670,100	)
Loss attributed to U.S. operations		-			(1,549,963	)
Income before tax		(116,339	)		(10,220,063	)
PRC Statutory Tax at 25% Rate		-			-
Effect of tax exemption granted		-			-
Income tax	$	-		$	-

Per Share Effect of Tax Exemption
		6/30/2018		6/30/2017
Effect of tax exemption granted	$	-	$	-
Weighted-Average Shares Outstanding Basic		50,802,391		38,274,490
Per share effect	$	-	$	-

The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows of June 30, 2018 and 2017:

	6/30/2018	6/30/2017
U.S. federal statutory income tax rate	21%	35%
Higher (lower) rates in PRC, net	4%	-10%
Non recognized deferred tax benefits in the PRC	-25%	-25%
The Company’s effective tax rate	0%	0%

F-17

American Lorain Corporation
Notes to Financial Statements

14.	Earnings/(Loss) Per Share
	Components of basic and diluted earnings per share were as follows:

		For the six months ended
		June 30,
		2018		2017
Basic and diluted (loss) earnings per share numerator:
(Loss) income from continuing operations (attributable) available to common stockholders	$	(116,339	)	(10,220,063	)
(Loss) income from discontinued operations (attributable) available to common stockholders		(652,612	)	(7,579,109	)
(Loss) income (attributable) available to common stockholders		(769,377	)	(16,359,323	)
Basic and diluted (loss) earnings per share denominator:
Original Shares:		38,274,490		38,274,490
Additions from Actual Events -Issuance of Common Stock		26,550,000		-
Basic Weighted Average Shares Outstanding		64,825,000		38,274,490
Loss per share from continuing operations - Basic and diluted		(0.00	)	(0.27	)
Income (loss) per share from discontinued operations - Basic and diluted		(0.01	)	(0.20	)
Loss per share - Basic and diluted		(0.02	)	(0.47	)
Weighted Average Shares Outstanding - Basic and diluted		50,802,391		38,274,490

F-18

American Lorain Corporation
Notes to Financial Statements

15.	Lease Commitments
	During the year ended December 31, 2013, the Company entered into three operating lease agreements leasing three plots of land where greenhouses are maintained to grow seasonal crops. The leases were signed by Junan Hongrun Foodstuff Co., Ltd. and they expire on April 25, 2033, May 19, 2033, and June 19, 2033.

The minimum future lease payments for these properties at June 30, 2018 are as follows:

Period		Greenhouse 1		Greenhouse 2		Greenhouse 3
Year 1	$	74,420	$	89,258	$	10,711
Year 2		74,420		89,258		10,711
Year 3		74,420		89,258		10,711
Year 4		74,420		89,258		10,711
Year 5		74,420		89,258		10,711
Year 5 and thereafter		769,007		929,771		112,466
	$	1,141,107	$	1,376,061	$	166,021

The outstanding lease commitments for the three greenhouses as of June 30, 2018 was $2,683,189.

16.	Capital Lease Obligations
	The Company leases certain machinery and equipment under leases classified as capital leases. The following is a schedule showing the future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of June 30, 2018:

Year 1	$	1,056,976
Year 2		-
Year 3		-
Total minimum lease payments		1,056,976
Less: Amount representing estimated executory costs (such as taxes, maintenance, and insurance), including profit thereon, included in total minimum lease payments		-
Net minimum lease payments		1,056,976
Less: Amount representing interest
Present value of net minimum lease payments	$	1,056,976

Reflected in the balance sheet as current and noncurrent obligations under capital leases of $1,056,976 and $0, respectively.

As of June 30, 2018, the present value of minimum lease payments due within one year is $1,056,976.

F-19

American Lorain Corporation
Notes to Financial Statements

17.	Contingencies and Litigation
	There is a lawsuit currently pending in the Linyi City Intermediate People’s Court of Shandong Province, which was initially filed by Shandong Lorain, a subsidiary of the Company, against Junan Hengji Real Estate Development Co., Ltd. ("Junan Hengji") in November 2013 at Linyi City Intermediate People’s Court of Shandong Province (the "Linyi Court"). Shandong Lorain added Jiangsu Hengan Industrial Investment Group Co., Ltd. ("Heng An Investment") as a co-defendant after the case was first filed at the Linyi Court.
	In December 2010, Shandong Lorain and Junan Hengji entered into a cooperative development agreement (the "Agreement") and in March 2011, Heng An Investment, an affiliated company of Junan Hengji, also entered into the Agreement with Shandong Lorain to jointly develop the project with Junan Hengji. Pursuant to the Agreement, Junan Henji and Heng An Investment are required to pay Shandong Lorain a total of RMB 20 million (approximately $3,225,806) fixed return according to the development status of the project developed by Junan Hengji and Heng An Investment. In deciding to bring suit, Shandong Lorain and the Company evaluated the potential claims against Junan Hengji and Heng An Investment, disputes between the parties with respect to out-of-pocket expenses paid by Junan Hengji, as well as the litigation fee that is required to be paid to the court based upon the amount claimed. Ultimately, Shandong Lorain decided to file the lawsuit with Linyi Court to claim a fixed return of RMB 10 million (approximately $1,499,390).
	In January 2014, the Linyi Court held its first trial session. During the trial, Heng An Investment filed a counterclaim against Shandong Lorain for repayment of out-of-pocket expenses which would offset the entire fixed return plus additional unpaid expenses of RMB 4,746,927 (approximately $765,633). Shandong Lorain responded that Heng An Investment does not have standing to file the counter-claim because the out- of-pocket payments were made by Junan Hengji. In November 2014, the court held a second trial session and completed its discovery process. On March 21, 2015, Shandong Lorain received the Linyi Court’s decision that rejected Shandong Lorain’s claim for RMB 10,000,000 against Junan Hengji and Heng An Investment. On April 3, 2015, Shandong Lorain appealed the decision to the Supreme Court of Shandong Province.
	In November 2015, the Supreme Court of Shandong Province vacated the decision of the Linyi Court and remanded the case back to the Linyi Court for a retrial. The retrial took place on April 25, 2016, at the Linyi City Intermediate People’s Court, and the decision thereon is currently pending.
	Shandong Lorain, a subsidiary of the Company, withdraw the lawsuit in 2018.
18.	Discontinued Operations
	The Company has reclassified the results of operations and the financial position of Shandong Lorain Dongguan Lorain and Junan Hongrun as discontinued operations. Selected details regarding those discontinued operations are provided below.

Results of Operations

		For the six			For the six
		months ended			months ended
		6/30/2018			6/30/2017
Sales	$	14,267		$	541,377
Cost of Sales		-			616,694
Gross Profit		14,267			(75,317	)
Operating Expenses		666,879			2,595,668
Other Income (Expenses)		-			(4,908,125	)
Earnings before Taxes		(652,612	)		(7,579,110	)
Taxes		-			-
Net Income	$	(652,612	)	$	(7,579,110	)

F-20

American Lorain Corporation
Notes to Financial Statements

Financial Position
		At			At
		6/30/2018			12/31/2017
Current Assets	$	3,871,313		$	790,550
Non-Current Assets		21,572,848			896,099
Total Assets	$	25,444,161		$	1,686,649
Current Liabilities	$	49,637,739		$	9,610,994
Total Long Term Liabilities		-			-
Total Liabilities	$	49,637,739		$	9,610,994
Net Assets	$	(24,193,578	)	$	(7,924,345	)
Total Liabilities & Net Assets	$	25,444,161		$	1,686,649

19. Risks

A. Credit risk

The Company’s deposits are made with banks located in the PRC. They do not carry federal deposit insurance and may be subject to loss of the banks become insolvent.

Since the Company’s inception, the age of account receivables has been less than one year indicating that the Company is subject to minimal risk borne from credit extended to customers.

B. Interest risk

The company is subject to interest rate risk when short term loans become due and require refinancing.

C. Economic and political risks

The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

D. Environmental risks

The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential damage to employees, equipment, and local environment.

E. Inflation Risk

Management monitors changes in prices levels. Historically inflation has not materially impacted the company’s financial statements; however, significant increases in the price of raw materials and labor that cannot be passed to the Company’s customers could adversely impact the Company’s results of operations.

F-21

American Lorain Corporation
Notes to Financial Statements

20. Subsequent Events

On July 12, 2018, the Company entered into a securities purchase agreement with Yunpeng Zhang and Zhongquan Sun, who agreed to invest an aggregate of $750,000 in the Company in exchange for an aggregate of 3,750,000 shares of the Company’s common stock, representing a purchase price of $0.20 per share.

On August 8, 2018, the Company, our chairman, Si Chen, and our direct and indirect subsidiaries, Planet Green Holdings Corp., a British Virgin Islands company that is 100% owned by us (“Planet Green”), Junan Hongrun Foodstuff Co., Ltd., a company incorporated in the PRC (“Junan”), Shandong Lorain Co., Ltd., a company incorporated in the PRC (“Shandong Lorain”), International Lorain Holdings, Inc., a Cayman Islands company that is 100% owned by us (“ILH”), Shandong Greenpia Foodstuff Co., Ltd., a business company incorporated in the PRC (“Shandong Greenpia”), Beijing Lorain Co., Ltd., a business company incorporated in the PRC (“Beijing Lorain”) and Luotian Lorain Co., Ltd., a business company incorporated in the PRC (“Luotian Lorain”), entered into a share exchange agreement (the “Sale Agreement”).

The Sale Agreement provides for:

• the sale of 100% of the equity interest in ILH by us to Mr. Chen (the “Disposition”); and

• the purchase of (A) 50% of the issued and outstanding shares of Shandong Greenpia, (B) 30% of Beijing Lorain and (C) 100% of the issued and outstanding shares of Luotian Lorain (collectively, the “Planet Green Shares”) by Planet Green from ILH (the “Exchange” and, collectively with the Disposition, the “Sale Transaction”).

The Planet Green Shares will be directly owned by Planet Green, and indirectly by us, following the closing of the Sale Transaction.

On August 8, 2018, the Company entered into an amended and restated securities purchase agreement with Yimin Jin, our chief strategy officer and director, and Hongxiang Yu, our chairman nominee and director, pursuant to which the Purchasers agreed to invest an aggregate of $10 million in the Company in exchange for an aggregate of 58,823,530 shares of our common stock, representing a purchase price of $0.17 per share. The agreement contains customary representations and warranties by the Company and customary closing conditions. In addition, the closing of the transaction is conditioned upon (i) the consummation of the Sale Transaction, which transaction is subject to the approval of our stockholders at our 2018 annual meeting, (ii) the re-election of Messrs. Jin and Yu to the Company’s board of directors at our 2018 annual meeting and (iii) the approval of certain amendment to our charter, to change the name of our company and to effect a stock split of the outstanding shares of our common stock, at our 2018 annual meeting. If consummated, the Company expects to use the proceeds of the financing for general corporate purposes. We also believe that, if consummated, the Sale Transaction will improve our balance sheet.

F-22

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview

Overview

We are an integrated food manufacturing company headquartered in Shandong Province, China. We develop, manufacture and sell the following types of food products:

• Chestnut products;
• Convenience foods (including ready-to-cook, or RTC, foods, and, ready-to-eat, or RTE, foods); and
• Frozen food products.

We conduct our production activities in China. Our products are sold in the Chinese domestic markets.

We spend a significant amount of cash on our operations, principally to procure raw materials for our products. Many of our suppliers, including chestnut, vegetable and fruit farmers, and suppliers of packaging materials, require us to prepay for their supplies in cash or pay on the same day that such supplies are delivered to us. However, some of the suppliers with whom we have a long-standing business relationship allow us to pay on credit. We fund the majority of our working capital requirements out of cash flow generated from operations. If we fail to generate sufficient sales, or if our suppliers stop offering us credit on favorable terms, we may not have sufficient liquidity to fund our operating costs and our business could be adversely affected.

The financial statements have been prepared on a going-concern basis. The going-concern basis assumes that assets will be realized and liabilities will be settled in the ordinary course of business in the amounts disclosed in the financial statements. Our ability to continue as a going concern is greatly dependent on our ability to realize its non-cash current assets such as receivables and inventory into cash in order to settle its current obligations. For the six months ended June 30, 2018, the Company incurred a net loss of $768,951. As of June 30, 2018, the Company had a working capital deficit of $59,153,945. These conditions raise substantial doubt as to whether the Company may continue as a going concern.

Our business, operating results or financial condition will be adversely affected in the event of unfavorable economic conditions. For example, we may experience declines in revenues, profitability and cash flows as a result of reduced orders, delays in receiving orders, delays or defaults in payment or other factors caused by the economic problems of our customers and prospective customers. We may experience supply chain delays, disruptions or other problems associated with financial constraints faced by our suppliers and subcontractors. In addition, changes and volatility in the equity, credit and foreign exchange markets and in the competitive landscape make it increasingly difficult for us to predict our revenues and earnings into the future.

Results of Operations

Three Months Ended June 30, 2018 Compared to Three Months Ended March 31, 2017

The following table summarizes the results of our operations during the three-month periods ended June 30, 2018 and June 30, 2017, respectively and provides information regarding the dollar and percentage increase or (decrease) from the three-month period ended June 30, 2018 compared to the three month period ended June 30, 2017.

2

(All amounts, other than percentages, stated in thousands of U.S. dollars)

	Three months ended June 30,				Increase /		Increase /
					Decrease		Decrease
(In Thousands of USD)	2018		2017		($)		(%)
Net revenues	636		1,177		(541	)	(46.0) %
Cost of revenues	71		1,474		(1,403	)	(95.2) %
Gross profit (loss)	565		(298	)	863		289.6 %
Operating expenses :
Selling and marketing expenses	31		91		(60	)	(65.9) %
General and administrative expenses	578		157		421		268.2 %
Operating (loss) Income	(44	)	(545	)	(501	)	(91.9) %
Government subsidy income	-		-		-		-
Interest and other income	77		214		(137	)	(64.0) %
Other expenses	(84	)	(135	)	(51	)	(37.8) %
Interest expense	-		(740	)	(740	)	(100) %
Loss on investment	5		-		5		100 %
Loss before tax from continuing operations	(46	)	(1,206	)	(1,160	)	(96.2) %
Income tax	-		-		--		--
Net loss from continuing operations	(46	)	(1,206	)	(1,160	)	(96.2) %
Net (loss) income from discontinued operations	(666	)	(1,624	)	(958	)	(59.0) %
Net loss	(711	)	(2,830	)	(2,119	)	(74.9) %
Non-controlling interests	(2	)	(266	)	(264	)	(99.2) %
Net income of common stockholders	(709	)	(1,764	)	1,055		59.8 %

Revenue

Net Revenues. Our net revenue for the three months ended June 30, 2018 amounted to $0.6 million, which represents a decrease of approximately $0.6 million, or 50.5%, from the three-month period ended on June 30, 2017, in which our net revenue was $1.2 million. This decrease was attributable to the intense competition in the market and the discontinued operations of our French company, Dongguan Lorain, Shandong Lorain and Junan Hongrun Foodstuff Co., Ltd. The overall decrease was attributable to the decrease in sales of each of our product segments, as reflected in the following table:

	Three months ended
	6/30/2018	6/30/2017
Category	($)	($)	($) Change		(%) Change
Chestnut	417,832	760,139	(342,307	)	(45.0%	)
Convenience food	46,366	91,205	(44,839	)	(49.2%	)
Frozen food	172,189	325,366	(153,177	)	(47.1%	)
Total	636,387	1,176,709	(540,322	)	(45.9%	)

Cost of Revenues. During the three months ended June 30, 2018, we experienced a decrease in cost of revenue of $1.43 million, in comparison to the three months ended June 30, 2017, from approximately $1.5 million to $0.07 million, reflecting a decrease of 95.3% . This decrease was attributable to the decrease in sales and expense for operation.

Gross Profit. Our gross profit increased $0.9 million, or 300%, to $0.6 million for the three months ended June 30, 2018 from minus $0.3 million for the three months ended June 30, 2017, attributable to lower cost of revenue.

3

Operating Expenses

Selling and Marketing Expenses. Our selling and marketing expenses increased $0.06 million, or 66.7%, to $0.03 million during the three months ended June 30, 2018, as compared to minus $0.09 million during the three months ended June 30, 2017. The decrease of our selling and marketing expenses is mainly due to the decrease of sales activities.

General and Administrative Expenses. We experienced an increase in general and administrative expense of $0.4 million from $0.2 million to approximately $0.6 million for the three months ended June 30, 2018, compared to the three months ended June 30, 2017. General and administrative expenses incurred by PRC subsidiaries to maintain our operation in China increased during such periods due to the newly acquired VIE entity Lorain Foodstuff (Shenzhen) Co., Ltd.

Government Subsidy Income

Government subsidy income was $0 million for the three months ended June 30, 2018 compared to $0 million during the three months ended June 30, 2017. Due to poor performance of our operations, we were ineligible to receive subsidies during such period.

Interest Expense

Interest expense, consisting of interest payments with respect to our outstanding loans, was $0 million for the three months ended June 30, 2018, compared to minus $0.7 million during the three months ended June 30, 2017. Such reductions were attributable to our failure to repay interest owed and loan default.

Net Loss

Net loss decreased to $0.7 million for the three months ended June 30, 2018 from $2.9 million for the three months ended June 30, 2017. The main reasons for the decrease of loss were the decreases in our operating expenses and increase of our net revenue as described above.

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

The following table summarizes the results of our operations during the six-month periods ended June 30, 2018 and June 30, 2017, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the six-month period ended June 30, 2018 compared to the six-month period ended June 30, 2017.

4

(All amounts, other than percentages, stated in thousands of U.S. dollars)

	Six months ended June 30,				Increase /		Increase /
					Decrease		Decrease
(In Thousands of USD)	2018		2017		($)		(%)
Net revenues	1,654		2,957		(1,303	)	(43.8) %
Cost of revenues	972		2,979		(2,007	)	(67.4) %
Gross profit (loss)	682		(22	)	704		3,200%
Operating expenses :
Selling and marketing expenses	53		2,006		(1,953	)	(97.4) %
General and administrative expenses	741		5,980		(5,239	)	(87.6) %
Operating (loss) Income	(112	)	(8,008	)	(7,896	)	(98.6) %
Government subsidy income	-		581		(581	)	(100) %
Interest and other income	78		374		(296	)	(79.1) %
Other expenses	(87	)	(2,004	)	(1,917	)	(95.7) %
Interest expense	-		(1,163	)	(1,163	)	(100) %
Loss on investment	5		-		5		100%
Loss before tax from continuing operations	(116	)	(10,220	)	(10,104	)	(98.9) %
Income tax	-		-		--		--
Net loss from continuing operations	(116	)	(10,220	)	(10,104	)	(98.9) %
Net (loss) income from discontinued operations	(653	)	(7,579	)	(6,926	)	(91.4) %
Net loss	(769	)	(17,799	)	(17,030	)	(95.7) %
Non-controlling interests	-		(1	)	(1	)	100%
Net income of common stockholders	(769	)	(16,359	)	15,590		95.3%

Revenue

Net Revenues. Our net revenue for the six months ended June 30, 2018 amounted to $1.6 million, which represents a decrease of approximately $1.4 million, or 43.8%, from the six-month period ended on June 30, 2017, in which our net revenue was $3.0 million. This decrease was attributable to the intense competition in the market and the discontinued operations of our French company, Dongguan Lorain, Shandong Lorain and Junan Hongrun Foodstuff Co., Ltd. The overall decrease was attributable to the decrease in sales of each of our product segments, as reflected in the following table:

	Six months ended
	6/30/2018	6/30/2017
Category	($)	($)	($) Change		(%) Change
Chestnut	955,964	1,609,132	(653,168	)	(40.6%	)
Convenience food	198,469	554,835	(356,366	)	(64.2%	)
Frozen food	499,482	793,005	(293,523	)	(37.0%	)
Total	1,653,915	2,956,972	(1,303,057	)	(44.1%	)

Cost of Revenues. During the six months ended June 30, 2018, we experienced a decrease in cost of revenue of $2.0 million, in comparison to the six months ended June 30, 2017, from approximately $3.0 million to $1.0 million, reflecting a decrease of 44.1% . This decrease was attributable to the decrease in sales.

Gross Profit. Our gross profit increased $0.7 million, or 3,200%, to $0.7 million for the six months ended June 30, 2018 from negative $0.02 million for the same period in 2017, attributable to lower cost of revenue.

5

Operating Expenses

Selling and Marketing Expenses. Our selling and marketing expenses decreased $2.0 million, or 97.4%, to $0.05 million during the second quarter of 2018, as compared to $2.0 million during the same period last year. Our selling and marketing expenses during such period in 2017 consisted primarily of daily sales expenses.

General and Administrative Expenses. We experienced a decrease in general and administrative expense of $0.7 million from $6.0 million to approximately $5.3 million for the six months ended June 30, 2018, compared to the same period in 2017. General and administrative expenses incurred by PRC subsidiaries to maintain our operation in China decreased during such periods due to the discontinued operations of our French company, Junan Hongrun, Dongguan Lorain, and Shandong Lorain.

Government Subsidy Income

Government subsidy income was $0 million for the six months ended June 30, 2018 compared to $0.6 million during the same period in 2017. Due to poor performance of our operations, we were ineligible to receive subsidies during such period.

Interest Expense

Interest expense, consisting of interest payments with respect to our outstanding loans, was $0 million for the six months ended June 30, 2018, compared to $1.0 million during the same period in 2017. Such reductions were attributable to our failure to repay interest owed and loan default.

Net Loss

Net loss decreased to $0.8 million for the six months ended June 30, 2018 from $18.8 million for the same period of 2017. The main reasons for the decrease of loss were the decreases in our operating expenses as described above.

Liquidity and Capital Resources

In the reporting period in 2018, our primary sources of financing have been cash generated from operations and the private placement. We raised funds in the following three private placements after the first quarter of 2018:

• On April 14, 2018, the Company entered into a securities purchase agreement with the investors name therein, who agreed to invest an aggregate of $1.629 million in the Company in exchange for an aggregate of 9,050,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share.
• On April 24, 2018, the Company entered into a securities purchase agreement with Xiuping Cai, who agreed to invest an aggregate of $1.8 million in the Company in exchange for an aggregate of 10,000,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share.
• On July 12, 2018, the Company entered into a securities purchase agreement with Yunpeng Zhang and Zhongquan Sun, who agreed to invest an aggregate of $750,000 in the Company in exchange for an aggregate of 3,750,000 shares of the Company’s common stock, representing a purchase price of $0.20 per share.

In addition, on May 23, 2018, the Company entered into a securities purchase agreement, pursuant to which each of Yimin Jin, the Chief Strategy Officer and a director of the Company, and Hongxiang Yu, a director of the Company, agreed to invest an aggregate of $5.0 million in the Company in exchange for 29,411,765 shares of the Company’s common stock, or an aggregate of $10.0 million in exchange for 58,823,530 shares, representing a purchase price of $0.17 per share. The parties entered into an amended and restated securities purchase agreement on August 8, 2018, which agreement was approved by our audit committee and our board of directors and remains subject to the approval of our stockholders at our 2018 annual meeting. The agreement contains customary representations and warranties by the Company and customary closing conditions. In addition, the closing of the transaction is conditioned upon (i) the consummation of the transactions contemplated by the share exchange agreement, dated August 8, 2018, entered into by and among the Company, certain subsidiaries of the Company, and Si Chen, the Company’s chairman, pursuant to which the Company has agreed to sell certain assets to Mr. Chen (the “Sale Transaction”), which transaction is subject to the approval of our stockholders at our 2018 annual meeting, (ii) the re-election of Messrs. Jin and Yu to the Company’s board of directors at our 2018 annual meeting and (iii) the approval of certain amendment to our charter, to change the name of our company and to effect a stock split of the outstanding shares of our common stock, at our 2018 annual meeting. If consummated, the Company expects to use the proceeds of the financing for general corporate purposes. We also believe that, if consummated, the Sale Transaction will improve our balance sheet.

6

Many of our bank loans have been in default. Such loans were guaranteed by non-related third parties. We are negotiating with these banks. However, we cannot guarantee that we will reach a satisfying settlement with the banks. If we fail, we would expect that the banks would exercise their rights to collect from guarantors or take possession of the assets underlying the business that was part to such loans.

Over the next 12 months, we need significant capital to maintain our normal business operations. If we fail to raise the working capital needed, we may cease to sell more products, shut down our sales offices and terminate employment agreements with most of our employees. As a result, the Company’s financial condition would be worse, which may have a material adverse effect on our listing status. If available liquidity is insufficient to meet our operating and loan obligations as they come due, our plans include obtaining alternative financing arrangements or further reducing expenditures as necessary to meet our cash requirements. There is no assurance that, if required, we will be able to raise additional capital or reduce discretionary spending to provide the required liquidity. We cannot be sure of the availability or terms of any third party financing.

To improve our operation and financial conditions, we are taking several measures: (i) reorganizing our corporate structure by disposing non-performing assets; (ii) financing through private financing in China; (iii) negotiating with the creditors to settle loans outstanding; and (iv) looking for new viable business opportunities.

As of June 30, 2018, we had cash and cash equivalents (including restricted cash) of $4.5 million. Our cash and cash equivalents increased by approximately $3.0 million from June 30, 2017. The following table provides detailed information about our net cash flow for all financial statements periods presented in this report.

Cash Flow (In thousands)

	For the Six Months Ended
	June 30,
	2018		2017
Net cash (used in)/provided by operating activities	(7,010	)	10,317
Net cash provided by/ (used in) investing activities	(5	)	(11,963	)
Net cash provided by/ (used in) financing activities	2,562		163
Net cash flow	(4,453	)	(1,483	)

Operating Activities

Net cash used in operating activities was $7.0 million and provided by operating activities was $10.3 million for the six month periods ended June 30, 2018 and 2017, respectively. The decrease of approximately $17.3 million in net cash flows used in operating activities in the first six months of 2018 was primarily due to a decrease of $10.1 million in net loss, $5.5 in accounts and other payables. An increase of $0.7 million in accounts and other receivables, $0.5 million in inventories, and an increase of $0.3 million in advance to suppliers during the current reporting period, $0.2 million in payment.

Investing Activities

Net cash used in investing activities for the six months period ended June 30, 2018 was $0.004 million, representing a decrease of $12.0 million in net cash used in investing activities from $12.0 million for the same period of 2017. The difference was primarily a result of the discontinued operations of our French company, Junan Hongrun, Dongguan Lorain, and Shandong Lorain.

Financing Activities

Net cash provided by financing activities for the six months period ended June 30, 2018 was $2.6 million, representing an increase of $2.4 million in net cash provided by financing activities from $0.2 million for the same period of 2017. The difference was primarily a result of investors input raised from the agreements the Company entered into on December 28, 2017 and April 14, 2018.

7

Loan Facilities

As of June 30, 2018, the amounts and maturity dates for our short-term bank loans are as set forth in the Notes to the Financial Statements. The total amounts outstanding were $12.1 million as of June 30, 2018, compared with $23.8 million as of December 31, 2017.

Critical Accounting Policies

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make assumptions, estimates and judgments that affect the amounts reported in our financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. We consider our critical accounting policies to be those that require significant judgments and estimates in the preparation of financial statements, including those set forth in Note 2 to the financial statements included herein.

Off-Balance Sheet Arrangements

We do not have any off-balance arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a(15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2018. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2018, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were not effective due to the continuing material weakness in our internal control over financial reporting.

The material weakness and significant deficiency identified by our management as of June 30, 2018 relates to the ability of the Company to record transactions and provide disclosures in accordance with U.S. GAAP. We did not have sufficient and skilled accounting personnel with an appropriate level of experience in the application of U.S. GAAP commensurate with our financial reporting requirements. For example, our staff members do not hold licenses such as Certified Public Accountant or Certified Management Accountant in the U.S., have not attended U.S. institutions for training as accountants, and have not attended extended educational programs that would provide sufficient relevant education relating to U.S. GAAP. Our staff will require substantial training to meet the demands of a U.S. public company and our staff’s understanding of the requirements of U.S. GAAP-based reporting is inadequate.

We plan to provide U.S. GAAP training sessions to our accounting team. The training sessions will be organized to help our corporate accounting team gain experience in U.S. GAAP reporting and to enhance their awareness of new and emerging pronouncements with potential impact over our financial reporting. We plan to continue to recruit experienced and professional accounting and financial personnel and participate in educational seminars, tutorials, and conferences and employ more qualified accounting staff in future.

8

Changes in Internal Controls over Financial Reporting.

During the six months ended June 30, 2018, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations Over Internal Controls.

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

9

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There is a lawsuit currently pending in the Linyi City Intermediate People’s Court of Shandong Province (the “Linyi Court”), which was initially filed by Shandong Lorain, a subsidiary of the Company, against Junan Hengji Real Estate Development Co., Ltd. ("Junan Hengji") in November 2013. Shandong Lorain added Jiangsu Hengan Industrial Investment Group Co., Ltd. ("Heng An Investment") as a co-defendant after the case was first filed at the Linyi Court.

In September 2010, Shandong Lorain and Junan Hengji entered into a cooperative development agreement (the "Agreement") and in March 2011, Heng An Investment, an affiliated company of Junan Hengji, also entered into the Agreement with Shandong Lorain to jointly develop the project with Junan Hengji. Pursuant to the Agreement, Junan Hengji and Heng An Investment are required to pay Shandong Lorain a total of RMB 20 million (approximately $3,225,806) fixed return according to the development status of the project developed by Junan Hengji and Heng An Investment. In deciding to bring suit, Shandong Lorain and the Company evaluated the potential claims against Junan Hengji and Heng An Investment, disputes between the parties with respect to out-of-pocket expenses paid by Junan Hengji, as well as the litigation fee that is required to be paid to the court based upon the amount claimed. Ultimately, Shandong Lorain decided to file the lawsuit with Linyi Court to claim a fixed return of RMB 10 million (approximately $1,540,666).

In January 2014, the Linyi Court held its first trial session. During the trial, Heng An Investment filed a counterclaim against Shandong Lorain for repayment of out-of-pocket expenses which would offset the entire fixed return plus additional unpaid expenses of RMB 4,746,927 (approximately $765,633). Shandong Lorain responded that Heng An Investment did not have standing to file the counter-claim because the out-of-pocket payments were made by Junan Hengji. In November 2014, the court held a second trial session and completed its discovery process. On March 21, 2015, Shandong Lorain received the Linyi Court's decision that rejected Shandong Lorain's claim for RMB 10,000,000 against Junan Hengji and Heng An Investment. On April 3, 2015, Shandong Lorain appealed the decision to the Supreme Court of Shandong Province.

In November 2015, the Supreme Court of Shandong Province vacated the decision of the Linyi Court and remanded the case back to the Linyi Court for a retrial. The retrial took place on April 25, 2016, at the Linyi City Intermediate People’s Court, and the decision thereon is currently pending. As of March 31, 2018, the court has not reached a final outcome.

Shandong Lorain, a subsidiary of the Company, withdrew the lawsuit in 2018.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

Sale Agreement

10

On August 8, 2018, the Company, our chairman, Si Chen, and our direct and indirect subsidiaries, Planet Green Holdings Corp., a British Virgin Islands company that is 100% owned by us (“Planet Green”), Junan Hongrun Foodstuff Co., Ltd., a company incorporated in the PRC (“Junan”), Shandong Lorain Co., Ltd., a company incorporated in the PRC (“Shandong Lorain”), International Lorain Holdings, Inc., a Cayman Islands company that is 100% owned by us (“ILH”), Shandong Greenpia Foodstuff Co., Ltd., a business company incorporated in the PRC (“Shandong Greenpia”), Beijing Lorain Co., Ltd., a business company incorporated in the PRC (“Beijing Lorain”) and Luotian Lorain Co., Ltd., a business company incorporated in the PRC (“Luotian Lorain”), entered into a share exchange agreement (the “Sale Agreement”).

The Sale Agreement provides for:

• the sale of 100% of the equity interest in ILH by us to Mr. Chen (the “Disposition”); and

• the purchase of (A) 50% of the issued and outstanding shares of Shandong Greenpia, (B) 30% of Beijing Lorain and (C) 100% of the issued and outstanding shares of Luotian Lorain (collectively, the “Planet Green Shares”) by Planet Green from ILH (the “Exchange” and, collectively with the Disposition, the “Sale Transaction”).

The Planet Green Shares will be directly owned by Planet Green, and indirectly by us, following the closing of the Sale Transaction.

Amended and Restated Securities Purchase Agreement

On August 8, 2018, the Company entered into an amended and restated securities purchase agreement with Yimin Jin, our chief strategy officer and director, and Hongxiang Yu, our chairman nominee and director, pursuant to which the Purchasers agreed to invest an aggregate of $10 million in the Company in exchange for an aggregate of 58,823,530 shares of our common stock, representing a purchase price of $0.17 per share. The agreement contains customary representations and warranties by the Company and customary closing conditions. In addition, the closing of the transaction is conditioned upon (i) the consummation of the Sale Transaction, which transaction is subject to the approval of our stockholders at our 2018 annual meeting, (ii) the re-election of Messrs. Jin and Yu to the Company’s board of directors at our 2018 annual meeting and (iii) the approval of certain amendment to our charter, to change the name of our company and to effect a stock split of the outstanding shares of our common stock, at our 2018 annual meeting. If consummated, the Company expects to use the proceeds of the financing for general corporate purposes. We also believe that, if consummated, the Sale Transaction will improve our balance sheet.

Departure of Certain Directors

Effective August 9, 2018, Si Chen and Maoquan Wei, two of the directors serving on our Board of Directors, informed the Board of Directors that they have decided not to be candidates for an additional term as director, due to personal professional reasons and not due to any disagreements with the Board, management or the Company.

ITEM 6. EXHIBITS

The following exhibits are filed as part of this Report.

11

Exhibit	Description
No.
10.1	Securities Purchase Agreement, dated July 12, 2018, by and among American Lorain Corporation, Yunpeng Zhang and Zhongquan Sun.*
10.2	Amended and Restated Securities Purchase Agreement, dated August 8, 2018, by and among American Lorain Corporation, Yimin Jin and Hongxiang Yu.*
10.3	Share Exchange Agreement, dated August 8, 2018, by and among American Lorain Corporation, Si Chen, Planet Green Holdings Corp., Junan Hongrun Foodstuff Co., Ltd., Shandong Lorain Co., Ltd., International Lorain Holdings, Inc., Shandong Greenpia Foodstuff Co., Ltd., Beijing Lorain Co., Ltd. and Luotian Lorain Co., Ltd.*
31.1	Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes(Oxley Act of 2002.*
31.2	Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes(Oxley Act of 2002. **
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes(Oxley Act of 2002.**
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase *
101.DEF	XBRL Taxonomy Extension Definition Linkbase *
101.LAB	XBRL Taxonomy Extension Label Linkbase *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase *

*	Filed herewith.
**	Furnished herewith.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 14, 2018

AMERICAN LORAIN CORPORATION

/s/ Si Chen

Si Chen

Chief Executive Officer

(Chief Executive Officer)

/s/ Yunqiang Sun

Yunqiang Sun

Chief Financial Officer

(Chief Financial Officer)

 

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EX-10.1

SECURITIES PURCHASE AGREEMENT

            This Securities Purchase Agreement (this “Agreement”) is dated as of July 12, 2018, between American Lorain Corporation, a Nevada corporation (the “Company”), and investors as listed in the Exhibit I (the “Purchaser”).

            WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

            NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

ARTICLE I.
DEFINITIONS

            1.1          Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

            “Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.

            “Action” shall have the meaning ascribed to such term in Section 3.1(j) .

            “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.

            “Board of Directors” means the board of directors of the Company.

            “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

            “Closing” shall have the meaning ascribed to such term in Section 2.1(a) .

            “Commission” means the United States Securities and Exchange Commission.

            “Common Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

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            “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

            “Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

            “Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(o) .

            “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

             “Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto pursuant to Section 2.2(a), and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount as to the Closing and (ii) the Company’s obligations to deliver the Securities as to the Closing, in each case, have been satisfied or waived.

            “Closing Shares” shall have the meaning ascribed to such term in Section 2.1(a) .

            “Closing Subscription Amount” means $750,000, in United States dollars and in immediately available funds.

            “GAAP” shall have the meaning ascribed to such term in Section 3.1(h) .

            “Liens” means a material lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

            “Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b) .

            “Per Share Purchase Price” equals $0.20, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

            “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

            “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

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            “Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e) .

            “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

            “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h) .

            “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

            “Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

            “Subscription Amount” means the Closing Subscription Amount.

            “Subsidiary” means any direct or indirect subsidiary of the Company formed or acquired.

            “Trading Day” means a day on which the principal Trading Market is open for trading.

            “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Bulletin Board (or any successors to any of the foregoing).

            “Transaction Documents” means this Agreement, and any other documents or agreements executed by the Company and/or the Purchaser in connection with the transactions contemplated hereunder.

            “Transfer Agent” means Issuer Direct Corporation., the current transfer agent of the Company, with a mailing address of 1981 Murray Holladay Road, Suite 100, SLC UT, 84117, and any successor transfer agent of the Company.

ARTICLE II.
PURCHASE AND SALE

            2.1        Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchaser agree to purchase 3,750,000 shares of Common Stock (the “Closing Shares”). The Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to the Closing Subscription Amount and the Company shall deliver to the Purchaser the Closing Shares within three Trading Days of the Closing Date, and the Company and the Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, but no later than three Trading Days subsequent to the Closing date, the Closing shall occur at the location as the parties shall mutually agree or remotely by exchange of Closing documents.

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            2.2          Deliveries.

            (a)        On or prior to each Closing, the Company shall deliver or cause to be delivered to the Purchaser the following:

            (i)        as to each Closing, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver a certificate evidencing the Shares, registered in the name of the Purchaser

            (b)        On or prior to each Closing, the Purchaser shall deliver or cause to be delivered to the Company, as to the Closing, the Closing Subscription Amount, by wire transfer of immediately available funds to the account specified in writing by the Company;

            2.3          Closing Conditions.

            (a)        The obligations of the Company hereunder in connection with each Closing are subject to the following conditions being met:

            (i)        all obligations, covenants and agreements of the Purchaser required to be performed at or prior to the applicable Closing shall have been performed; and

            (ii)        as to the Closing, the Company and the Purchaser shall have agreed on the use of proceeds from the transactions contemplated hereunder; and

            (iii)        the delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement.

            (b)        The obligations of the Purchaser hereunder in connection with each applicable Closing are subject to the following conditions being met:

                                 (i)        all obligations, covenants and agreements of the Company required to be performed at or prior to the applicable Closing shall have been performed;

                                 (ii)        the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

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            (iii)        the Company is listed as a public company on, and the shares of Common Stock are tradable over the NYSE American;

                                 (v)        as to the Closing, the Company and the Purchaser shall have agreed on the use of proceeds from the transactions contemplated hereunder; and

                                 (vi)        On the date of the applicable Closing, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, on the date of the applicable Closing, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Purchaser, makes it impracticable or inadvisable to purchase the Securities at the applicable Closing.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

            3.1          Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules and the SEC Reports, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to the Purchaser:

            (a)        Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid and non-assessable. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

            (b)        Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, or business, of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

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            (c)        Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

            (d)        No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or would not reasonably be expected to result in a Material Adverse Effect.

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            (e)        Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) application(s) to each applicable Trading Market for the additional listing of the Shares for trading thereon in the time and manner required thereby, and (iii) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

             (f)        Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided by the Transaction Documents. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.

            (g)        Capitalization. As of March 31, 2018, the company has 64,824,490 shares issued and outstanding. Since March 31, 2018, the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in material compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

            (h)        SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company is an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

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            (i)        Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth in the SEC Reports, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

            (j)        Litigation. Except as set forth in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

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            (k)        Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

            (l)        Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other material agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or reasonably be expected to result in a Material Adverse Effect.

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            (m)        Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects.

            (n)        Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

            (o)        Internal Accounting Controls. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

            (p)        Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

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            (q)        Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

            (r)        No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

            (s)        Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company is in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

            (t)        Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchaser’s ownership of the Securities.

            (u)        Disclosure. All of the disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

            (v)        Accountants. The Company’s current accounting firm is WWC, P. C. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2017.

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            3.2          Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and as of each Closing to the Company as follows (unless as of a specific date therein):

            (a)        Organization; Authority. The Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by the Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the Purchaser. Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

            (b)        Own Account. The Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting the Purchaser’s right to sell the Securities pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws). The Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

            (c)        Purchaser Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act; or (iii) non-US residents, as permitted by Regulation S.

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            (d)        Experience of the Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

            (e)        General Solicitation. The Purchaser is not, to its knowledge, purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

            (f)        Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material pricing terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case the Purchaser is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of the Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement, the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

            (g)        Access to Information. The Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

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            (h)        Acknowledgement of Risk. The Purchaser acknowledges and understands that its investment in the Securities involves a significant degree of risk, including, without limitation that (i) an investment in the Company is speculative, and only Purchaser who can afford the loss of their entire investment should consider investing in the Company and the Securities and (ii) the Company has not paid any dividends on its Common Stock since inception and does not anticipate the payment of dividends in the foreseeable future.

The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby.

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

            4.1          Transfer Restrictions.

            (a)        The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of the Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of the Purchaser under this Agreement.

             (b)        The Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form:

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

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            4.2          Furnishing of Information; Public Information. Until the time that the Purchaser does not own any Securities, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

            4.3          Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

            4.4          Securities Laws Disclosure; Publicity. The Company shall (a) by 9:00 a.m. (New York City time) within four Trading Days following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public information delivered to any of the Purchaser by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of the Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.

            4.5          Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchaser.

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            4.6          Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities in accordance with the schedule agreed to by the parties.

            4.7          Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement.

            4.8          Listing of Common Stock. During the term of 5 years after the closing of this transaction, the Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with each Closing, the Company shall apply to list or quote all of the Shares on such Trading Market and take all reasonable actions to secure the listing of all of the Shares on such Trading Market. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.

            4.9          Certain Transactions and Confidentiality. The Purchaser covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4. The Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, the Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules.

            4.10        Blue Sky Filings. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of the Purchaser.

ARTICLE V.
MISCELLANEOUS

            5.1          Termination. This Agreement may be terminated by any Purchaser or by the Company with respect to any Purchaser, as to the Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchaser, by written notice to the other parties, if the Closing has not been consummated on or before May 31, 2018; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

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            5.2          Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.

            5.3          Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

            5.4          Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2^nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

            5.5          Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

            5.6          Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

            5.7          Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom the Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchaser.”

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            5.8          No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

            5.9          Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

            5.10        Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

            5.11        Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

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            5.12        Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

            5.13        Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

            5.14        Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchaser and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

            5.15        Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

            5.16        Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

            5.17        WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

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(Signature Page Follows)

            IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

AMERICAN LORAIN CORPORATION

By: /s/ Chen Si

Name: Chen Si

Title: Chairman

Address for Notice:

Beihuan Zhong Road

Junan County, Shandong China

Attention: Chen Si

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            IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

YUNPENG ZHANG

By: /s/ Yunpeng Zhang

Name: Yunpeng Zhang

Address for Notice:

Suite 44, No. 999 Xinhua Road

Zhuanghe City, Liaoning Province, PR China

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            IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

QUANZHONG SUN

By: /s/ Quanzhong Sun

Name: Quanzhong Sun

Address for Notice:

No. 31, Pulandian County Shishan Xinzhaigou

Zhuanghe City, Liaoning Province, PR China

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Exhibit I

Name	Number Of Shares
Yunpeng Zhang	1,500,000
Quanzhong Sun	2,250,000

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EX-10.2

AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of August 8, 2018, between American Lorain Corporation, a Nevada corporation (the “Company”), and Yimin Jin and Hongxiang Yu (collectively, the “Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to the Purchasers, and each Purchaser desires to purchase from the Company, securities of the Company as more fully described in this Agreement; and

WHEREAS, the Company and the Purchasers entered into a securities purchase agreement on May 23, 2018 and hereby wish to amend and restate such agreement in its entirety.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers agree as follows:

ARTICLE I.
DEFINITIONS

1.1           Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.

“Action” shall have the meaning ascribed to such term in Section 3.1(j) .

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Closing” shall have the meaning ascribed to such term in Section 2.1(a) .

“Commission” means the United States Securities and Exchange Commission.

  “Common Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

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“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(o) .

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto pursuant to Section 2.2(a), and all conditions precedent to (i) the Purchasers’ obligations to pay the Closing Subscription Amount as to the Closing and (ii) the Company’s obligations to deliver the Closing Shares as to the Closing, in each case, have been satisfied or waived.

“Closing Shares” shall have the meaning ascribed to such term in Section 2.1(a) .

“Closing Subscription Amount” means $10,000,000, in United States dollars and in immediately available funds.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h) .

“Liens” means a material lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b) .

“Per Share Purchase Price” equals $0.17, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

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“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e) ..

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h) ..

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

“Subsidiary” means any direct or indirect subsidiary of the Company formed or acquired.

“Trading Day” means a day on which the principal Trading Market is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Bulletin Board (or any successors to any of the foregoing).

“Transaction Documents” means this Agreement, and any other documents or agreements executed by the Company and/or the Purchasers in connection with the transactions contemplated hereunder.

“Transfer Agent” means Issuer Direct Corporation., the current transfer agent of the Company, with a mailing address of 1981 Murray Holladay Road, Suite 100, SLC UT, 84117, and any successor transfer agent of the Company.

ARTICLE II.
PURCHASE AND SALE

2.1           Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and each Purchaser agrees to purchase 29,411,765 shares of Common Stock, representing an aggregate of 58,823,530 shares of Common Stock (collectively, the “Closing Shares”). Each Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to the Purchaser’s pro rata portion of the Closing Subscription Amount and the Company shall deliver to each Purchaser the pro rata portion of such Purchaser’s Closing Shares within three Trading Days of the Closing Date, and the Company and the Purchasers shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, but no later than three Trading Days subsequent to the Closing date, the Closing shall occur at the location as the parties shall mutually agree or remotely by exchange of Closing documents.

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2.2           Deliveries.

(a) On or prior to the Closing, the Company shall deliver or cause to be delivered to the Purchasers, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver certificates evidencing the Closing Shares, registered in the names of the Purchasers, respectively; and

(b) On or prior to each Closing, each Purchaser shall deliver or cause to be delivered to the Company, the pro rata portion of such Purchaser’s Closing Subscription Amount, by wire transfer of immediately available funds to the account specified in writing by the Company.

2.3           Closing Conditions.

(a)           The obligations of the Company hereunder in connection with each Closing are subject to the following conditions being met:

(i)      all obligations, covenants and agreements of the Purchasers required to be performed at or prior to the applicable Closing shall have been performed;

(ii)      as to the Closing, the Company and the Purchasers shall have agreed on the use of proceeds from the transactions contemplated hereunder;

(iii)      the delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement;

(iv)      the sale of all of the Company’s interests in Junan Hongrun Foodstuff Co., Ltd., Athena, Dongguan Lorain Co., Ltd. and Shandong Lorain Co., Ltd. to the Company’s chairman shall have been (i) approved by the requisite vote of the shareholders of the Company at the 2018 annual meeting of shareholders of the Company (the “Annual Meeting”) in accordance with the terms of the proxy statement to be filed with the U.S. Securities and Exchange Commission and mailed to the Company shareholders in connection therewith and (ii) consummated thereafter;

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(v)      amendments to the Company’s articles of incorporation to (i) change the Company’s name to “Planet Green Holdings Corp.” and (ii) effect a reverse stock split of the Common Stock shall have been approved by the requisite vote of the shareholders of the Company at the Annual Meeting;

(vi)      the Transaction Documents and the transactions contemplated hereby and thereby shall have been approved by (i) the audit committee of the Company’s board of directors, (ii) the requisite vote of the shareholders of the Company at the Annual Meeting and (iii) the NYSE American;

(vii)      the election of each of the Purchasers shall have been approved by the requisite vote of the shareholders of the Company at the Annual Meeting.

(b)           The obligations of the Purchasers hereunder in connection with each applicable Closing are subject to the following conditions being met:

(i)      all obligations, covenants and agreements of the Company required to be performed at or prior to the applicable Closing shall have been performed;

(ii)      the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

(iii)      the Company is listed as a public company on, and the shares of Common Stock are tradable over the NYSE American;

(iv)      as to the Closing, the Company and the Purchaser shall have agreed on the use of proceeds from the transactions contemplated hereunder; and

(v)      On the date of the applicable Closing, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, on the date of the applicable Closing, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Purchaser, makes it impracticable or inadvisable to purchase the Closing Shares at the applicable Closing;

(vi)      the sale of all of the Company’s interests in Junan Hongrun Foodstuff Co., Ltd., Athena, Dongguan Lorain Co., Ltd. and Shandong Lorain Co., Ltd. to the Company’s chairman shall have been (i) approved by the requisite vote of the shareholders of the Company at the 2018 annual meeting of shareholders of the Company (the “Annual Meeting”) in accordance with the terms of the proxy statement to be filed with the U.S. Securities and Exchange Commission and mailed to the Company shareholders in connection therewith and (ii) consummated thereafter;

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(v)      amendments to the Company’s articles of incorporation to (i) change the Company’s name to “Planet Green Holdings Corp.” and (ii) effect a reverse stock split of the Common Stock shall have been approved by the requisite vote of the shareholders of the Company at the Annual Meeting;

(vi)      the Transaction Documents and the transactions contemplated hereby and thereby shall have been approved by (i) the audit committee of the Company’s board of directors, (ii) the requisite vote of the shareholders of the Company at the Annual Meeting and (iii) the NYSE American;

(vii)      the election of each of the Purchasers shall have been approved by the requisite vote of the shareholders of the Company at the Annual Meeting.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

3.1           Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules and the SEC Reports, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to the Purchasers:

(a)           Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid and non-assessable. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

(b)           Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, or business, of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

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(c)           Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(d)           No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Closing Shares and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or would not reasonably be expected to result in a Material Adverse Effect.

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(e)           Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) application(s) to each applicable Trading Market for the additional listing of the Shares for trading thereon in the time and manner required thereby, (iii) approval from Company’s shareholder meeting; and (iv) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

(f)           Issuance of the Closing Shares. The Closing Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided by the Transaction Documents. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.

(g)           Capitalization. As of March 31, 2018, the company has 45,774,490 shares issued and outstanding. Since March 31, 2018, the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in material compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Closing Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

(h)           SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company is an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

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(i)           Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Closing Shares contemplated by this Agreement or as set forth in the SEC Reports, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

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(j)           Litigation. Except as set forth in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Closing Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

(k)           Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(l)           Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other material agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or reasonably be expected to result in a Material Adverse Effect.

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(m)      Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects.

(n)      Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

(o)      Internal Accounting Controls. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

(p)      Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

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(q)           Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Closing Shares by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Closing Shares hereunder does not contravene the rules and regulations of the Trading Market.

(r)           No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Closing Shares by any form of general solicitation or general advertising. The Company has offered the Closing Shares for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

(s)           Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company is in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

(t)           Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Closing Shares and the Purchasers’ ownership of the Closing Shares.

(u)           Disclosure. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

(v)           Accountants. The Company’s current accounting firm is WWC, P. C. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2017.

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3.2           Representations and Warranties of the Purchasers. Each Purchaser hereby represents and warrants as of the date hereof and as of each Closing to the Company as follows (unless as of a specific date therein):

(a)           Organization; Authority. The Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by the Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the Purchaser. Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(b)           Own Account. The Purchaser understands that the Closing Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Closing Shares as principal for its own account and not with a view to or for distributing or reselling such Closing Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Closing Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Closing Shares in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting the Purchaser’s right to sell the Closing Shares pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws). The Purchaser is acquiring the Closing Shares hereunder in the ordinary course of its business.

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(c)           Purchaser Status. At the time the Purchaser was offered the Closing Shares, it was, and as of the date hereof it is, either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act; or (iii) non-US residents, as permitted by Regulation S.

(d)           Experience of the Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Closing Shares, and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk of an investment in the Closing Shares and, at the present time, is able to afford a complete loss of such investment.

(e)           General Solicitation. The Purchaser is not, to its knowledge, purchasing the Closing Shares as a result of any advertisement, article, notice or other communication regarding the Closing Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

(f)           Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material pricing terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case the Purchaser is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of the Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Closing Shares covered by this Agreement. Other than to other Persons party to this Agreement, the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

(g)           Access to Information. The Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Closing Shares and the merits and risks of investing in the Closing Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

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(h)           Acknowledgement of Risk. The Purchaser acknowledges and understands that its investment in the Closing Shares involves a significant degree of risk, including, without limitation that (i) an investment in the Company is speculative, and only Purchaser who can afford the loss of their entire investment should consider investing in the Company and the Closing Shares and (ii) the Company has not paid any dividends on its Common Stock since inception and does not anticipate the payment of dividends in the foreseeable future.

The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the Purchasers’ right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby.

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

4.1           Transfer Restrictions.

(a)           The Closing Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Closing Shares other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of the Purchasers or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Closing Shares under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of the Purchasers under this Agreement.

(b)           Each Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Closing Shares in the following form:

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

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4.2           Furnishing of Information; Public Information. Until the time that the Purchasers do not own any Closing Shares, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

4.3           Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Closing Shares in a manner that would require the registration under the Securities Act of the sale of the Closing Shares or that would be integrated with the offer or sale of the Closing Shares for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

4.4           Securities Laws Disclosure; Publicity. The Company shall (a) by 9:00 a.m. (New York City time) within four Trading Days following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the Purchasers shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of the Purchasers, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.

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4.5           Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Closing Shares under the Transaction Documents or under any other agreement between the Company and the Purchasers.

4.6           Use of Proceeds. The Company shall use the net proceeds from the sale of the Closing Shares in accordance with the schedule agreed to by the parties.

4.7           Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement.

4.8           Listing of Common Stock. During the term of 5 years after the closing of this transaction, the Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with each Closing, the Company shall apply to list or quote all of the Shares on such Trading Market and take all reasonable actions to secure the listing of all of the Shares on such Trading Market. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.

4.9           Certain Transactions and Confidentiality. Each Purchaser covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4. Each Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules.

4.10           Blue Sky Filings. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Closing Shares for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of the Purchasers.

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ARTICLE V.
MISCELLANEOUS

5.1           Termination. This Agreement may be terminated by any Purchaser or by the Company with respect to any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchaser, by written notice to the other parties, if the Closing has not been consummated on or before October 31, 2018; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

5.2           Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Closing Shares to a Purchaser.

5.3           Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

5.4           Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2^nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

5.5           Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

5.6           Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

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5.7           Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Closing Shares, provided that such transferee agrees in writing to be bound, with respect to the transferred Closing Shares, by the provisions of the Transaction Documents that apply to the “Purchaser.”

5.8           No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

5.9           Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

5.10           Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Closing Shares.

5.11           Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

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5.12           Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

5.13           Replacement of Closing Shares. If any certificate or instrument evidencing any Closing Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Closing Shares.

5.14           Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchaser and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

5.15           Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

5.16           Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

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5.17           WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

(Signature Page Follows)

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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

AMERICAN LORAIN CORPORATION

By: /s/ Si Chen         

Name: Si Chen

Title: Chairman

Address for Notice:

Beihuan Zhong Road

Junan County, Shandong China

Attention: Si Chen

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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

YIMIN JIN

By: /s/ Yimin Jin         

Name: Yimin Jin

Address for Notice:

Lane 22, No. 209 Tongxin Road

Hongkou District, Shanghai, PR China

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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

HONGXIANG YU

By: /s/ Hongxiang Yu        

Name: Hongxiang Yu

Address for Notice:

No. 4-157, Zhongni Dingtang Town

Xiangshan City, Zhejiang Province, PR China

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EX-10.3

SHARE EXCHANGE AGREEMENT

This Share Exchange Agreement (this “Agreement”) is made and entered into as of August 8, 2018 by and among (i) Si Chen (the “Chairman”), (ii) American Lorain Corporation, a Nevada corporation (“Pubco”), (iii) Planet Green Holdings Corp., a British Virgin Islands company (“Planet Green”), (iv) Junan Hongrun Foodstuff Co., Ltd., a company incorporated in the PRC (“Junan”), (v) Shandong Lorain Co., Ltd., a company incorporated in the PRC (“Shandong Lorain”), (vi) International Lorain Holdings, Inc., a Cayman Islands company (“ILH”), (vii) Shandong Greenpia Foodstuff Co., Ltd., a business company incorporated in the PRC (“Shandong Greenpia”), (viii) Beijing Lorain Co., Ltd., a business company incorporated in the PRC (“Beijing Lorain”) and (ix) Luotian Lorain Co., Ltd., a business company incorporated in the PRC (“Luotian Lorain”). The Chairman, Pubco, Planet Green, Junan, Shandong Lorain, ILH, Shandong Greenpia, Beijing Lorain and Luotian Lorain are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties”. Attached hereto as Schedule A is an organizational chart reflecting Pubco’s corporate structure following the consummation of the transactions contemplated by this Agreement.

RECITALS:

WHEREAS, Pubco owns 100% of the issued and outstanding shares of ILH and wishes to transfer such shares to the Chairman;

WHEREAS, ILH owns (i) 100% of the issued and outstanding shares of Junan, and (ii) 25% of the issued and outstanding shares of Shandong Lorain (and an additional 55.2% of the issued and outstanding shares of Shandong Lorain is indirectly held by ILH through Junan), which shares will be directly owned by ILH, and indirectly owned by the Chairman, following the transfer of the shares of ILH by Pubco to the Chairman, and the remaining 19.8% shares of the issued and outstanding shares of Shandong Lorain will continue to be held by an unrelated third party;

WHEREAS, Pubco owns 100% of the issued and outstanding shares of Planet Green, a holding company formed for the purpose of acquiring the Planet Green Shares (defined below) that currently holds no assets;

WHEREAS, ILH owns (i) 50% of the issued and outstanding shares of Shandong Greenpia (and the remaining 50% of the issued and outstanding shares of Shandong Greenpia is indirectly held by ILH through Junan), (ii) 30% of Beijing Lorain (and the remaining 70% of the issued and outstanding shares of Beijing Lorain is held indirectly by ILH through Junan) and (iii) 100% of the issued and outstanding shares of Luotian Lorain, which shares will be directly owned by Planet Green, and indirectly Pubco (collectively, the “Planet Green Shares”), following the transfer of the Planet Green Shares by ILH to Planet Green;

WHEREAS, Junan owns (i) 55.2% of the issued and outstanding shares of Shandong Lorain, (ii) 100% of the issued and outstanding shares of Dongguan Lorain Co., Ltd., a company incorporated in the PRC (“Dongguan”), (iii) 51% of the issued and outstanding shares of Athena, a limited liability company organized under the laws of France (“Athena”), (iv) 50% of the issued and outstanding shares of Shandong Greenpia and (v) 70% of the issued and outstanding shares of Beijing Lorain, which shares will be indirectly owned by ILH through its ownership of Junan, and indirectly owned by the Chairman through his ownership of ILH, following the transfer of the shares of ILH by Pubco to the Chairman;

WHEREAS, ILH desires to sell to Planet Green, and Planet Green desires to purchase from ILH, all of the Planet Green Shares, subject to the terms and conditions set forth herein (the “Exchange Transaction”);

WHEREAS, immediately following the Exchange Transaction, Pubco desires to sell to the Chairman, and the Chairman desires to purchase from Pubco, all of the issued and outstanding shares of ILH, subject to the terms and conditions set forth herein (the “Sale Transaction”);

WHEREAS, following the consummation of the Sale Transaction and the Exchange Transaction, Pubco will continue to own (i) 50% of the issued and outstanding shares of Shandong Greenpia, (ii) 30% of Beijing Lorain and (iii) 100% of the issued and outstanding shares of Luotian Lorain, which shares will be directly owned by Planet Green, and indirectly by Pubco;

WHEREAS, as previously disclosed by Pubco in Pubco’s filings with the Securities and Exchange Commission, the operations of Junan, Shandong Lorain, Dongguan and Athena have ceased and each such entity has significant outstanding debts;

WHEREAS, the Chairman is personally liable to repay the outstanding debts of Junan, Shandong Lorain and Dongguan;

WHEREAS, Athena is no longer a consolidated subsidiary of Pubco;

WHEREAS, Pubco is not liable to repay the outstanding debts of Junan, Shandong Lorain, Dongguan and Athena;

WHEREAS, following the consummation of the Sale Transaction and the Exchange Transaction, the Chairman will continue to be liable to repay the outstanding debts of Junan, Shandong Lorain, and Dongguan;

WHEREAS, following the consummation of the Sale Transaction and the Exchange Transaction, neither Pubco nor any of Pubco’s then Affiliates will be liable to repay the outstanding debts of Junan, Shandong Lorain, Dongguan and Athena; and

WHEREAS, following the consummation of the Sale Transaction and the Exchange Transaction, the financial statements of Pubco will no longer reflect the discontinued operations of Junan, Shandong Lorain and Dongguan.

NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties hereto agree as follows:

ARTICLE I
THE SHARE EXCHANGE

1.1           Exchange Transaction. At the Closing and subject to and upon the terms and conditions of this Agreement, in exchange for $100.00 and other good and valuable consideration, ILH shall sell, transfer, convey, assign and deliver to Planet Green, a wholly owned subsidiary of Pubco, and Planet Green shall purchase, acquire and accept from ILH, all of the Planet Green Shares, free and clear of all Liens (other than potential restrictions on resale under applicable securities Laws).

1.2           Sale Transaction. At the Closing (as hereinafter defined), immediately following the consummation of the Exchange Transaction, and subject to and upon the terms and conditions of this Agreement, in exchange for $100.00 and other good and valuable consideration, Pubco shall sell, transfer, convey, assign and deliver to the Chairman, and the Chairman shall purchase, acquire and accept from Pubco, all of the issued and outstanding shares of ILH, free and clear of all Liens (other than potential restrictions on resale under applicable securities Laws), as is. Pubco makes no representation or warranty, express or implied, with respect to the shares of ILH being sold hereunder.

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ARTICLE II
CLOSING; CLOSING CONDITIONS

2.1           Closing. Subject to the satisfaction or waiver of the conditions set forth in Article III, the consummation of the transactions contemplated by this Agreement (the “Closing”), including the Exchange Transaction and, immediately thereafter, the Sale Transaction, shall take place at Beihuan Road Junan County, Shandong, China 276600, on the date hereof, or at such other date, time or place as the Parties may agree (the date and time at which the Closing is actually held being the “Closing Date”).

2.2           Closing Conditions.

(a)           The Sale Transaction and the Exchange Transaction shall have been approved by the requisite vote of the shareholders of Pubco at the 2018 annual meeting of shareholders in accordance with the terms of the proxy statement to be filed with the U.S. Securities and Exchange Commission and mailed to Pubco’s shareholders in connection therewith.

(b)           The board of directors of Pubco (the “Board”) shall have received a fairness opinion from Joseph Stone Capital, LLC (or such other financial advisor as approved by the Board).

ARTICLE III
REPRESENTATIONS AND WARRANTIES

The Chairman and ILH hereby jointly and severally represent and warrant to Pubco and its Affiliates as follows: 3.1 Governmental Approvals. No Consent of or with any Governmental Authority is required to be obtained or made in connection with the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby, other than (a) such filings as may be required in any jurisdiction in which such Party is qualified or authorized to do business as a foreign corporation in order to maintain such qualification or authorization, (b) such filings as contemplated by this Agreement, (c) any filings required with NYSE American with respect to the transactions contemplated by this Agreement, or (d) applicable requirements, if any, of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and/ or any state “blue sky” securities laws, and the rules and regulations thereunder.

3.2           Non-Contravention. The execution and delivery by each Party of this Agreement and the consummation of the transactions contemplated hereby, and compliance with any of the provisions hereof, will not (a) conflict with or violate any provision of the Organizational Documents of such Party (if any), (b) conflict with or violate any Law, Order or Consent applicable to such Party or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by such Party under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any lien upon any of the properties or assets of such Party under, (viii) give rise to any obligation to obtain any third party consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material contract of such Party.

3.3           Pubco Assets and Liabilities. On the Closing Date, after giving effect to the Sale Transaction and the Exchange Transaction, Pubco and its Affiliates shall have no liabilities relating to Junan, Shandong Lorain, Dongguan or Athena.

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ARTICLE IV
TERMINATION AND EXPENSES

4.1           Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing as follows:

(a)           by mutual written consent of the Chairman and Pubco; or

(b)           by written notice by either the Chairman or Pubco if a Governmental Authority of competent jurisdiction shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such Order or other action has become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(b) shall not be available to a Party if the failure by such Party or its Affiliates to comply with any provision of this Agreement has been a substantial cause of, or substantially resulted in, such action by such Governmental Authority.

4.2           Effect of Termination. This Agreement may only be terminated in the circumstances described in Section 4.1 and pursuant to a written notice delivered by the applicable Party to the other applicable Parties, which sets forth the basis for such termination, including the provision of Section 4.1 under which such termination is made. In the event of the valid termination of this Agreement pursuant to Section 4.1, this Agreement shall forthwith become void, and there shall be no Liability on the part of any Party or any of their respective Representatives, and all rights and obligations of each Party shall cease, and nothing herein shall relieve any Party from Liability for any willful breach of any representation, warranty, covenant or obligation under this Agreement or any Fraud Claim against such Party, in either case, prior to termination of this Agreement. Without limiting the foregoing, and except as provided in this Article IV4.3, the Parties’ sole right prior to the Closing with respect to any breach of any representation, warranty, covenant or other agreement contained in this Agreement by another Party or with respect to the transactions contemplated by this Agreement shall be the right, if applicable, to terminate this Agreement pursuant to Section 4.1.

4.3           Fees and Expenses. All Expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such expenses. As used in this Agreement, “Expenses” shall include all out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, financial advisors, financing sources, experts and consultants to a Party hereto or any of its Affiliates) incurred by a Party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution or performance of this Agreement or any Ancillary Document related hereto and all other matters related to the consummation of this Agreement.

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ARTICLE V
RELEASES

5.1           Release and Covenant Not to Sue. Effective as of the Closing, to the fullest extent permitted by applicable Law, the Chairman, on behalf of himself and his Affiliates, and ILH, on behalf of itself and its Affiliates (collectively, the “Releasing Persons”), will release and discharge Pubco and its Affiliates from and against any and all Actions, obligations, agreements, debts and Liabilities whatsoever, whether known or unknown, both at law and in equity, which such Releasing Person now has, has ever had or may hereafter have against Pubco or its Affiliates arising on or prior to the Closing Date or on account of or arising out of any matter occurring on or prior to the Closing Date, including any rights to indemnification or reimbursement from Pubco or its Affiliates, whether pursuant to its Organizational Documents, Contract or otherwise, and whether or not relating to claims pending on, or asserted after, the Closing Date. From and after the Closing, each Releasing Person hereby irrevocably covenants to refrain from, directly or indirectly, asserting any Action, or commencing or causing to be commenced, any Action of any kind against Pubco or its Affiliates, based upon any matter purported to be released hereby. Notwithstanding anything herein to the contrary, the releases and restrictions set forth herein shall not apply to any claims a Releasing Person may have against any party pursuant to the terms and conditions of this Agreement.

ARTICLE VI
SURVIVAL AND INDEMNIFICATION

6.1           Survival. All representations and warranties of the Chairman and ILH contained in this Agreement (including all schedules and exhibits hereto and all certificates, documents, instruments and undertakings furnished pursuant to this Agreement) shall survive the Closing through and until the second (2^nd) anniversary of the Closing Date. Additionally, Fraud Claims against the Chairman or ILH shall survive indefinitely. If written notice of a claim for breach of any representation or warranty has been given before the applicable date when such representation or warranty no longer survives in accordance with this Section 6.1, then the relevant representations and warranties shall survive as to such claim, until the claim has been finally resolved. All covenants, obligations and agreements of the Chairman and ILH contained in this Agreement (including all schedules and exhibits hereto and all certificates, documents, instruments and undertakings furnished pursuant to this Agreement), including any indemnification obligations, shall survive the Closing and continue until fully performed in accordance with their terms. For the avoidance of doubt, a claim for indemnification under any subsection of Section 6.2 other than clauses (i) or (ii) thereof may be made at any time.

6.2           Indemnification by the Chairman and ILH. Subject to the terms and conditions of this Article VI, from and after the Closing, the Chairman and ILH and their respective successors and assigns (with respect to any claim made under this Section 6.26.2, the “Indemnifying Parties”) will jointly and severally indemnify, defend and hold harmless Pubco and its Affiliates and their respective officers, directors, managers, employees, successors and permitted assigns (with respect to any claim made under this Section 6.2, the “Indemnified Parties”) from and against any and all losses, Actions, Orders, Liabilities, damages (including consequential damages), diminution in value, Taxes, interest, penalties, Liens, amounts paid in settlement, costs and expenses (including reasonable expenses of investigation and court costs and reasonable attorneys’ fees and expenses), (any of the foregoing, a “Loss”) paid, suffered or incurred by, or imposed upon, any Indemnified Party to the extent arising in whole or in part out of or resulting directly or indirectly from (whether or not involving a Third Party Claim): (i) the breach of any representation or warranty made by the Chairman or ILH set forth in this Agreement or in any certificate delivered by the Chairman or ILH pursuant to this Agreement; (ii) the breach of any covenant or agreement on the part of Chairman or ILH set forth in this Agreement or in any certificate delivered by Chairman or ILH pursuant to this Agreement; (iii) any Action by Person(s) who were holders of equity securities of Pubco, including options, warrants, convertible debt or other convertible securities or other rights to acquire equity securities of Pubco, prior to the Closing arising out of the sale, purchase, termination, cancellation, expiration, redemption or conversion of any such securities; or (iv) any Fraud Claims.

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6.3           Limitations and General Indemnification Provisions.

(a)           Solely for purposes of determining the amount of Losses under this Article VI (and, for the avoidance of doubt, not for purposes of determining whether there has been a breach giving rise to the indemnification claim), all of the representations, warranties and covenants set forth in this Agreement (including the disclosure schedules hereto) or any Ancillary Document that are qualified by materiality or words of similar import or effect will be deemed to have been made without any such qualification.

(b)           No investigation or knowledge by an Indemnified Party its Representatives of a breach of a representation, warranty, covenant or agreement of an Indemnifying Party shall affect the representations, warranties, covenants and agreements of the Indemnifying Party or the recourse available to the Indemnified Parties under any provision of this Agreement, including this Article VI, with respect thereto.

(c)           The amount of any Losses suffered or incurred by any Indemnified Party shall be reduced by the amount of any insurance proceeds paid to the Indemnified Party or any Affiliate thereof as a reimbursement with respect to such Losses (and no right of subrogation shall accrue to any insurer hereunder, except to the extent that such waiver of subrogation would prejudice any applicable insurance coverage), net of the costs of collection and the increases in insurance premiums resulting from such Loss or insurance payment.

6.4           Indemnification Procedures.

(a)           Yimin Jin (the “Pubco Representative”) shall have the sole right to act on behalf of the Indemnified Parties with respect to any indemnification claims made pursuant to this Article VI, including bringing and settling any claims hereunder and receiving any notices on behalf of the Indemnified Parties. The Chairman (the “Indemnifying Representative”) shall have the sole right to act on behalf of the Indemnifying Parties with respect to any indemnification claims made pursuant to this Article VI, including defending and settling any claims hereunder and receiving any notices on behalf of the Indemnifying Parties.

(b)           In order to make a claim for indemnification hereunder, the Pubco Representative on behalf of an Indemnified Party must provide written notice (a “Claim Notice”) of such claim to the Indemnifying Representative on behalf of the Indemnifying Parties, which Claim Notice shall include (i) a reasonable description of the facts and circumstances which relate to the subject matter of such indemnification claim to the extent then known and (ii) the amount of Losses suffered by the Indemnified Party in connection with the claim to the extent known or reasonably estimable (provided, that the Pubco Representative may thereafter in good faith adjust the amount of Losses with respect to the claim by providing a revised Claim Notice to Indemnifying Representative).

(c)           In the case of any claim for indemnification under this Article VI arising from a claim of a third party (including any Governmental Authority) (a “Third Party Claim”), the Pubco Representative must give a Claim Notice with respect to such Third Party Claim to the Indemnifying Representative promptly (but in no event later than thirty (30) days) after the Indemnified Party’s receipt of notice of such Third Party Claim; provided, that the failure to give such notice will not relieve the Indemnifying Party of its indemnification obligations except to the extent that the defense of such Third Party Claim is materially and irrevocably prejudiced by the failure to give such notice. The Indemnifying Representative will have the right to defend and to direct the defense against any such Third Party Claim, at its expense and with counsel selected by Indemnifying Representative, unless (i) the Indemnifying Representative fails to acknowledge fully to the Pubco Representative the obligations of the Indemnifying Parties to such Indemnified Party within twenty (20) days after receiving notice of such Third Party Claim or contests, in whole or in part, its indemnification obligations therefor or (ii) at any time while such Third Party Claim is pending, (A) there is a conflict of interest between the Indemnifying Representative on behalf of the Indemnifying Parties and the Pubco Representative on behalf of the Indemnified Party in the conduct of such defense, (B) the applicable third party alleges a Fraud Claim or (C) such claim is criminal in nature, could reasonably be expected to lead to criminal proceedings, or seeks an injunction or other equitable relief against the Indemnified Parties. If the Indemnifying Representative on behalf of the Indemnifying Parties elects, and is entitled, to compromise or defend such Third Party Claim, it will within twenty (20) days (or sooner, if the nature of the Third Party Claim so requires) notify the Pubco Representative of its intent to do so, and Indemnifying Representative and the Indemnified Party will, at the request and expense of Indemnifying Representative, cooperate in the defense of such Third Party Claim. If Indemnifying Representative on behalf of the Indemnifying Parties elects not to, or at any time is not entitled under this Section 6.4 to, compromise or defend such Third Party Claim, fails to notify the Pubco Representative of its election as herein provided or refuses to acknowledge or contests its obligation to indemnify under this Agreement, the Pubco Representative on behalf of the Indemnified Party may pay, compromise or defend such Third Party Claim. Notwithstanding anything to the contrary contained herein, the Indemnifying Parties will have no indemnification obligations with respect to any such Third Party Claim which is settled by the Indemnified Party or the Pubco Representative without the prior written consent of Indemnifying Representative on behalf of the Indemnifying Parties (which consent will not be unreasonably withheld, delayed or conditioned); provided, however, that notwithstanding the foregoing, the Indemnified Party will not be required to refrain from paying any Third Party Claim which has matured by a final, non-appealable Order, nor will it be required to refrain from paying any Third Party Claim where the delay in paying such claim would result in the foreclosure of a Lien upon any of the property or assets then held by the Indemnified Party or where any delay in payment would cause the Indemnified Party material economic loss. The Indemnifying Representative’s right on behalf of the Indemnifying Parties to direct the defense will include the right to compromise or enter into an agreement settling any Third Party Claim; provided, that no such compromise or settlement will obligate the Indemnified Party to agree to any settlement that requires the taking or restriction of any action (including the payment of money and competition restrictions) by the Indemnified Party other than the execution of a release for such Third Party Claim and/or agreeing to be subject to customary confidentiality obligations in connection therewith, except with the prior written consent of the Pubco Representative on behalf of the Indemnified Party (such consent to be withheld, conditioned or delayed only for a good faith reason). Notwithstanding the Indemnifying Representative’s right on behalf of the Indemnifying Parties to compromise or settle in accordance with the immediately preceding sentence, Indemnifying Representative on behalf of Indemnifying Parties may not settle or compromise any Third Party Claim over the objection of the Pubco Representative on behalf of the Indemnified Party; provided, however, that consent by the Pubco Representative on behalf of the Indemnified Party to settlement or compromise will not be unreasonably withheld, delayed or conditioned. The Pubco Representative on behalf of the Indemnified Party will have the right to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Representative’s right on behalf of the Indemnifying Parties to direct the defense.

6

(d)           With respect to any direct indemnification claim that is not a Third Party Claim, the Indemnifying Representative on behalf of the Indemnifying Parties will have a period of thirty (30) days after receipt of the Claim Notice to respond thereto. If Indemnifying Representative on behalf of Indemnifying Parties does not respond within such thirty (30) days, Indemnifying Representative on behalf of Indemnifying Parties will be deemed to have accepted responsibility for the Losses set forth in such Claim Notice subject to the limitations on indemnification set forth in this Article VI and will have no further right to contest the validity of such Claim Notice. If Indemnifying Representative on behalf of Indemnifying Parties responds within such thirty (30) days after the receipt of the Claim Notice and rejects such claim in whole or in part, the Pubco Representative on behalf of the Indemnified Party will be free to pursue such remedies as may be available under this Agreement, any Ancillary Documents or applicable Law.

6.5           Exclusive Remedy. From and after the Closing, except with respect to Fraud Claims related to the negotiation or execution of this Agreement or claims seeking injunctions or specific strict performance, indemnification pursuant to this Article VI shall be the sole and exclusive remedy for the Parties with respect to matters arising under this Agreement of any kind or nature, including for any misrepresentation or breach of any warranty, covenant, or other provision contained in this Agreement or in any certificate or instrument delivered pursuant to this Agreement or otherwise relating to the subject matter of this Agreement, including the negotiation and discussion thereof.

7

ARTICLE VII
MISCELLANEOUS

7.1           Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or otherwise without the prior written consent of the Parties, and any assignment without such consent shall be null and void; provided that no such assignment shall relieve the assigning Party of its obligations hereunder.

7.2           Third Parties. Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any Person that is not a Party hereto or thereto or a successor or permitted assign of such a Party.

7.3           Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of New York without regard to the conflict of laws principles thereof. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any federal or state court located in New York City (or in any court in which appeal from such courts may be taken) (the “Specified Courts”). Each Party hereto hereby (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any Party hereto and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court. Each Party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such Party at such Party’s place of business. Nothing in this Section 4.3 shall affect the right of any Party to serve legal process in any other manner permitted by Law.

8

7.4           Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

7.5           Amendment. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Parties.

7.6           Entire Agreement. This Agreement and the documents or instruments referred to herein, including any exhibits, annexes and schedules attached hereto, which exhibits, annexes and schedules are incorporated herein by reference, embody the entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein, which collectively supersede all prior agreements and the understandings among the Parties with respect to the subject matter contained herein.

7.7           Counterparts. This Agreement may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

ARTICLE VIII
DEFINITIONS

8.1           Certain Definitions. For purpose of this Agreement, the following capitalized terms have the following meanings: “Action” means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint, stipulation, assessment or arbitration, or any request (including any request for information), inquiry, hearing, proceeding or investigation, by or before any Governmental Authority.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person.

“Consent” means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority or any other Person.

“Contracts” means all contracts, agreements, binding arrangements, bonds, notes, indentures, mortgages, debt instruments, purchase order, licenses, franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications thereto).

“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (the “10% Owner”) (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast ten percent (10%) or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive ten percent (10%) or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a 10% Owner) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.

9

“Fraud Claim” means any claim based in whole or in part upon fraud, willful misconduct or intentional misrepresentation.

“Governmental Authority” means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality, department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.

“Law” means any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order or Consent that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

“Liabilities” means any and all liabilities, indebtedness, Actions or obligations of any nature (whether absolute, accrued, contingent or otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured and whether due or to become due), including tax liabilities due or to become due.

“Lien” means any mortgage, pledge, security interest, attachment, right of first refusal, option, proxy, voting trust, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination arrangement in favor of another Person, any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar Law.

“Order” means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other action that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.

“Organizational Documents” means the Person’s Certificate of Incorporation and Bylaws or similar organizational documents, in each case, as amended.

“Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.

10

“Representative” means, as to any Person, such Person’s Affiliates and its and their managers, directors, officers, employees, agents and advisors (including financial advisors, counsel and accountants).

“Taxes” means (a) all direct or indirect federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value-added, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and related contributions due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property, windfall profits, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, (b) any Liability for payment of amounts described in clause (a) whether as a result of being a member of an affiliated, consolidated, combined or unitary group for any period or otherwise through operation of law and (c) any Liability for the payment of amounts described in clauses (a) or (b) as a result of any tax sharing, tax group, tax indemnity or tax allocation agreement with, or any other express or implied agreement to indemnify, any other Person.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]

11

IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be signed and delivered by its respective duly authorized officer as of the date first written above.

The Chairman:
	/s/ Si Chen
	By: Si Chen
Pubco:
AMERICAN LORAIN CORPORATION,
a Nevada corporation
By:	/s/ Si Chen
	Name: Si Chen
	Title: Chief Executive Officer
Planet Green:
PLANET GREEN HOLDINGS CORP.,
a British Virgin Islands company
By:	/s/ Yimin Jin
	Name: Yimin Jin
	Title: Authorized Person
Junan:
JUNAN HONGRUN FOODSTUFF CO., LTD.,
a PRC company
By:	/s/ Si Chen
	Name: Si Chen
	Title: Authorized Person

Shandong Lorain:
SHANDONG LORAIN CO., LTD.,
a PRC company
By:	/s/ Si Chen
	Name: Si Chen
	Title: Authorized Person
ILH:
INTERNATIONAL LORAIN HOLDINGS, INC.,
a Cayman Islands company
By:	/s/ Si Chen
	Name: Si Chen
	Title: Authorized Person
Shandong Greenpia:
SHANDONG GREENPIA FOODSTUFF CO., LTD.,
a PRC company
By:	/s/ Si Chen
	Name: Si Chen
	Title: Authorized Person
Beijing Lorain:
BEIJING LORAIN CO., LTD.,
a PRC company
By:	/s/ Si Chen
	Name: Si Chen
	Title: Authorized Person
Luotian Lorain:
LUOTIAN LORAIN CO., LTD.,
a PRC company
By:	/s/ Si Chen
	Name: Si Chen
	Title: Authorized Person

EX-31.1

Exhibit 31.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302

I, Si Chen, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2018 of American Lorain Corporation.
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a(15(e) and 15d(15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a(15(f) and 15d(15(f)) for the Registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrants first fiscal quarter) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 14, 2018

By: /s/ Si Chen
Name: Si Chen
Title: Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302

I, Yunqiang Sun, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2018 of American Lorain Corporation.
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a(15(e) and 15d(15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a(15(f) and 15d(15(f)) for the Registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrants first fiscal quarter) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 14, 2018

By: /s/ Yunqiang Sun
Name: Yunqiang Sun
Title: Chief Financial Officer
(Chief Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Lorain Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.        The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.        The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: August 14, 2018

By: /s/ Si Chen
Name: Si Chen
Title: Chief Executive Officer
(Principal Executive Officer)

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Lorain Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.        The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.        The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: August 14, 2018

By: /s/ Yunqiang Sun
Name: Yunqiang Sun
Title: Chief Financial Officer
(Chief Financial Officer)

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2018 shares
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Trading Symbol	aln
Entity Registrant Name	American Lorain CORP
Entity Central Index Key	0001117057
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	64,824,490
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

XML

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 385,324	$ 85,493
Trade receivables, net	1,254,877	729,919
Inventories	10,499,705	10,593,403
Advances and prepayments to suppliers	1,700,587	3,129,435
Other receivables and other current assets	1,777,732	1,612,682
Discontinued operations - current assets held for sale	3,871,313	790,550
Total current assets	19,489,538	16,941,482
Non-current assets
Plant and equipment, net	16,640,921	36,663,290
Intangible assets, net	11,275,408	13,167,870
Construction in progress, net	805,693	819,301
Discontinued operations - long term assets held for sale	21,572,848	896,099
Total Assets	69,784,408	68,488,042
Current liabilities
Short-term bank loans	12,123,886	23,773,780
Long-term debt - current portion	9,359,792	30,511,656
Capital lease - current portion	1,056,976	1,074,829
Accounts payable	1,444,353	4,150,604
Taxes payable	0	355,142
Accrued liabilities and other payables	4,543,503	9,317,038
Customers deposits	477,234	485,295
Discontinued operations - liabilities	49,637,739	9,610,994
Total current liabilities	78,643,483	79,279,338
Stockholders' Equity
Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively	0	0
Common Stock, $0.001 par value, 200,000,000 shares authorized; 64,824,490 and 38,274,490 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively	64,825	38,275
Subscription receivable	(2,142,000)	0
Additional paid-in capital	62,529,699	57,852,249
Statutory reserves	25,103,354	25,103,354
Accumulated deficit	(100,397,924)	(99,628,547)
Accumulated other comprehensive income	13,727,898	13,588,726
Non-controlling interests	(7,744,927)	(7,745,353)
Total Stockholders' Equity	(8,859,075)	(10,791,296)
Total Liabilities and Stockholders' Equity	$ 69,784,408	$ 68,488,042

XML

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Preferred Stock, Par Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	64,824,490	38,274,490
Common Stock, Shares, Outstanding	64,824,490	38,274,490

XML

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSAND COMPREHENSIVE INCOME (LOSS) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net revenues	$ 636,387	$ 1,176,709	$ 1,653,915	$ 2,956,972
Cost of revenues	70,918	1,474,231	972,409	2,978,896
Gross profit (loss)	565,469	(297,522)	681,506	(21,924)
Operating expenses:
Selling and marketing expenses	31,045	91,113	52,992	2,005,818
General and administrative expenses	578,216	156,555	740,603	5,980,054
Total operating expenses	609,261	247,668	793,595	7,985,872
Operating (loss) income	(43,792)	(545,190)	(112,089)	(8,007,796)
Other income (expenses):
Government subsidy	0	0	0	580,705
Interest income	(238)	31	248	32
Interest expense	0	(740,001)	0	(1,163,264)
Other income	77,053	213,880	77,783	374,457
Other expenses	(83,764)	(135,119)	(87,246)	(2,004,197)
Loss from investment	4,965	0	4,965	0
Total Other Income Exoense	(1,984)	(661,209)	(4,250)	(2,212,267)
(Loss)/income before taxes from continuing operations	(45,776)	(1,206,399)	(116,339)	(10,220,063)
Provision for income taxes	0	0	0	0
(Loss)/income from continuing operations	(45,776)	(1,206,399)	(116,339)	(10,220,063)
Discontinued operations:
(Loss) income from discontinued operations	(665,658)	(1,623,555)	(652,612)	(7,579,109)
Provision for income taxes	0	0	0	0
Loss from discontinued operations, net of taxes	(665,658)	(1,623,555)	(652,612)	(7,579,109)
Net loss	(711,434)	(2,829,954)	(768,951)	(17,799,172)
Net loss attributable to:
- Common shareholders	(709,277)	(1,763,776)	(769,377)	(16,359,323)
- Non-controlling interests	(2,157)	(266,178)	426	(1,439,849)
Other comprehensive income:
Foreign currency translation loss	585,224	(433,834)	139,173	3,069,946
Comprehensive loss	$ (126,210)	$ (3,263,788)	$ (629,778)	$ (14,729,226)
(Loss) income per share from continuing operations
- Basic and diluted	$ 0.00	$ (0.03)	$ 0.00	$ (0.27)
Loss per share from discontinued operations
- Basic and diluted	(0.01)	(0.04)	(0.01)	(0.20)
Loss per share
- Basic and diluted	$ (0.01)	$ (0.07)	$ (0.02)	$ (0.47)
Basic and diluted weighted average shares outstanding	57,670,644	38,259,490	50,802,391	38,274,490

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities
Loss from continuing operations	$ (116,339)	$ (10,220,063)
Depreciation of fixed assets	295,981	754,161
Amortization of intangible assets	137,904	761,815
Decrease in accounts and other receivables	(690,408)	(1,045,506)
Decrease in inventories	(524,090)	(8,572,757)
Decrease/(increase) in advance to suppliers	(322,664)	19,920,095
Decrease in prepayment	(167,262)	(1,110,935)
(Decrease)/increase in accounts and other payables	(5,479,629)	4,970,176
(Decrease)/increase in taxes payable	(135,131)	51,417
(Decrease)/increase in customer deposits	(8,061)	4,808,727
Net cash provided by (used in) operating activities	(7,009,699)	10,317,130
Cash flows from investing activities
Decrease in restricted cash	0	182,447
Purchase of plant and equipment	(4,836)	(2,277,031)
Payment of construction in progress	0	(9,306,821)
Purchase of intangible assets	0	(561,114)
Net cash (used in) provided by investing activities	(4,836)	(11,962,519)
Cash flows from financing activities
Proceeds from issuance of common stock	2,562,000	0
Proceeds from bank borrowings and debentures	0	162,874
Net cash provided by financing activities	2,562,000	162,874
Net decrease in cash and cash equivalents	(4,452,535)	(1,482,515)
Effect of foreign currency translation on cash and cash equivalents	4,752,366	1,259,884
Cash and cash equivalents-beginning of year	85,493	407,062
Cash and cash equivalents-end of year	385,324	184,431
Supplementary cash flow information:
Interest received	248	70
Interest paid	0	513,825
Income taxes paid	$ 0	$ 310,820

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Organization and Principal Activities

6 Months Ended

Jun. 30, 2018

Organization and Principal Activities [Text Block]

1.

Organization and Principal Activities

American Lorain Corporation (the “Company” or “ALN”) is registered as a corporation in the state of Nevada. The Company conducts its primary business activities through its subsidiaries located in the People’s Republic of China. Those subsidiaries develop, manufacture, and market convenience foods, chestnut products, and frozen foods; these products are sold to both domestic markets and international markets.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Summary of Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

Method of accounting

Management has prepared the accompanying financial statements and these notes in accordance to generally accepted accounting principles in the United States of America; the Company maintains its general ledger and journals with the accrual method accounting.

Principles of consolidation

The accompanying consolidated financial statements include the assets, liabilities, and results of operations of the Company, and its subsidiaries, which are listed below:

	Place of	Attributable equity	Registered
Name of Company	incorporation	interest %	capital
International Lorain Holding Inc.	Cayman Islands	100.0	$46,659,135
Junan Hongrun Foodstuff Co., Ltd.	PRC	100.0	44,861,741
Shandong Lorain Co., Ltd.	PRC	80.2	12,123,985
Beijing Lorain Co., Ltd.	PRC	100.0	1,540,666
Luotian Lorain Co., Ltd.	PRC	100.0	3,797,774
Shandong Greenpia Foodstuff Co., Ltd.	PRC	100.0	2,303,063
Dongguan Lorain Co., Ltd.	PRC	100.0	149,939
Lorain Foodstuff (Shenzhen) Co., Ltd.	PRC	VIE	500,000

In 2014, the Company invested $2,100,000 in Athena/Minerve Group whereby the Company controlling shareholder of Minerve. Minerve conducted operations in manufacturing, packaging and sales activities in France and import and storage operations in Portugal. During the years ended December 31, 2015, the financial position and results of operations of Minerve were accounted for as subsidiaries in the Company’s financial statements; however, during the year ended December 31, 2016, Minerve became insolvent and compelled into bankruptcy by creditors, and, ultimately liquidation. Accordingly, the Company lost control of Minerve and wrote off the value of its investment in Minerve. All receivables due by Minerve to subsidiaries still controlled by the Company have been written-off.

Management has eliminated all significant inter-company balances and transactions in preparing the accompanying consolidated financial statements. Ownership interests of subsidiaries that the Company does not wholly-own are accounted for as non-controlling interests.

Shandong Economic Development Investment Corporation, which is a PRC state-owned entity, holds 19.8% equity interest in Shandong Lorain.

Consolidation of Variable Interest Entity

VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. Any VIE with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. Management makes ongoing reassessments of whether the Company is the primary beneficiary of Shenzhen Lorain.

On December 14, 2017, the Company formed Shenzhen Lorain as a limited company under the laws of the PRC. Through Shandong Greenpia, the Company entered into exclusive arrangements with Shenzhen Lorain and its shareholders that give the Company the ability to substantially influence Shenzhen Lorain’s daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of Shenzhen Lorain and it consolidates its accounts as a VIE. The Company’s arrangements with Shenzhen Lorain consist of the following agreements:

1.    Consultation and Service Agreement, dated December 14, 2017. Under this agreement entered into between Shandong Greenpia Foodstuff Co., Ltd. and Lorain Foodstuff (Shenzhen) Co., Ltd.

2.    Business Cooperation Agreement, dated December 14, 2017. Under this agreement entered into between Shandong Greenpia Foodstuff Co., Ltd. and Lorain Foodstuff (Shenzhen) Co., Ltd.

3.    Equity Pledge Agreement, dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd.

4.    Equity Option Agreement, dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd.

5.    Voting Rights Proxy and Financial Supporting Agreement dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd.

Discontinued operations

In 2017, the Company discontinued the operations in Shandong Lorain Co. Ltd. and Dongguan Lorain Co., Ltd. As a result, the financial results of these two subsidiaries are presented as discontinued operations.

In the first quarter of 2018, the Company’s board of directors resolved to discontinue the operations of Junan Hongrun Foodstuff Co. Ltd.

Use of estimates

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates.

Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Investment securities

The Company classifies securities it holds for investment purposes into trading or available-for-sale. Trading securities are bought and held principally for the purpose of selling them in the near term. All securities not included in trading securities are classified as available-for-sale.

Trading and available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on trading securities are included in the net income. Unrealized holding gains and losses, net of the related tax effect, on available for sale securities are excluded from net income and are reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.

A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in carrying amount to fair value. The impairment is charged as an expense to the statement of income and comprehensive income and a new cost basis for the security is established. To determine whether impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year end, and forecasted performance of the investee.

Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective-interest method. Dividend and interest income are recognized when earned.

Trade receivables

Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

Inventories

Inventories consist of raw materials and finished goods which are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, inbound shipping costs, and allocated overhead. The Company applies the weighted average cost method to its inventory.

Advances and prepayments to suppliers

The Company makes advance payment to suppliers and vendors for the procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers the applicable amount is reclassified from advances and prepayments to suppliers to inventory.

Plant and equipment

Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. The Company’s typically applies a salvage value of 0% to 10%. The estimated useful lives of the plant and equipment are as follows:

Buildings	20 - 40 years
Landscaping, plant and tree	30 years
Machinery and equipment	1 - 10 years
Motor vehicles	10 years
Office equipment	5 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company’s results of operations. The costs of maintenance and repairs are recognized to expenses as incurred; significant renewals and betterments are capitalized.

Construction in progress and prepayments for equipment

Construction in progress and prepayments for equipment represent direct and indirect acquisition and construction costs for plants, and costs of acquisition and installation of related equipment. Amounts classified as construction in progress and prepayments for equipment are transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Depreciation is not provided for assets classified in this account.

Land use rights

Land use rights are carried at cost and amortized on a straight-line basis over a specified period. Amortization is provided using the straight-line method over 40 - 50 years.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. The Company conducts an annual assessment of its goodwill for impairment. If the carrying value of its goodwill exceeds its fair value, then impairment has incurred; accordingly, a charge to the Company’s results of operations will be recognized during the period. Fair value is generally determined using a discounted expected future cash flow analysis.

Accounting for the impairment of long-lived assets

The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate the adequate profits. Impairment is present if the carrying amount of an asset is less than its expected future undiscounted cash flows.

If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed are reported at the lower of the carrying amount or fair value less costs to sell.

Statutory reserves

Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital.

Foreign currency translation

The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are the Renminbi (RMB) and the Euro (EUR). The Company’s assets and liabilities are translated into United States dollars from RMB and EUR at year-end exchange rates, and its revenues and expenses are translated at the average exchange rate during the period. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

	6/30/2018	12/31/2017	6/30/2017
Period/year end RMB: US$ exchange rate	6.6166	6.5067	6.7744
Period/annual average RMB: US$ exchange rate	6.4568	6.6133	6.8607

The RMB is not freely convertible into foreign currencies and all foreign exchange transactions must be conducted through authorized financial institutions.

Revenue recognition

The Company recognizes revenue when persuasive evidence of arrangement exists, the price has been fixed or is determinable, the delivery has been completed and no other significant obligations of the Company exists, and collectability of payment is reasonably assured. Payments received prior to all of the foregoing criteria are recorded as customer deposits. Recorded revenue is derived from the value of goods invoiced less value-added tax (VAT).

Advertising

All advertising costs are expensed as incurred.

Shipping and handling

All outbound shipping and handling costs are expensed as incurred.

Research and development

All research and development costs are expensed as incurred.

Retirement benefits

Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as part of overhead.

Income taxes

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

Comprehensive income

The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders.

Earnings per share

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive effects of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warrants are calculated using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

Financial instruments

The Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

• Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets.

• Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Unaudited interim financial information

These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2018.

The consolidated balance sheets and certain comparative information as of December 31, 2017 are derived from the audited consolidated financial statements and related notes for the year ended December 31, 2017 (“2017 Annual Financial Statements”), included in the Company’s 2017 Annual Report on Form 10-K. These unaudited interim condensed consolidated financial statements should be read in conjunction with the 2017 Annual Financial Statements.

Recent accounting pronouncements

In January 2017, the FASB issued guidance which simplifies the accounting for goodwill impairment. The updated guidance eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, determined in Step 1. The Company is currently evaluating the impact on the financial statements of this guidance.

In January 2017, the FASB amended the existing accounting standards for business combinations. The amendments clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

The Company is evaluated the timing and the impact of the aforesaid guidance on the financial statements.

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Going Concern

6 Months Ended

Jun. 30, 2018

Going Concern [Text Block]

3.	Going Concern
	The accompanying financial statements have been prepared on a going-concern basis. The going-concern basis assumes that assets will be realized and liabilities will be settled in the ordinary course of business in the amounts disclosed in the financial statements. The Company’s ability to continue as a going concern is greatly dependent on the Company’s ability to realize its non-cash current assets such as receivables and inventory into cash in order to settle its current obligations. For the six months ended June 30, 2018, the Company incurred a loss of $116,339. As of June 30, 2018, the Company had a working capital deficit of approximately $59,153,945. These conditions raised substantial doubt as to whether the Company may continue as a going concern. Management believes the actions taken below provide resources to the Company to continue as going concern and remedy the above substantial doubt.
	To improve its solvency, the Company has obtained new working capital through private placements of its common stock to qualified investors. During the three months ended March 31, 2018, the Company entered into a private placement with certain investors where it issued 7,500,000 new shares of its common stock for $1.275 million of proceeds. Management has designated the funds for use in general corporate purposes.
	For the quarter ended March 31, 2018, the Company’s board resolved to discontinue the operations of Junan Hongrun Foodstuff Co., Ltd. in order to minimize losses and focus the Company’s resources on certain operations that will generate profits and positive cash flows to the Company.
	On April 14, 2018, the Company entered into a securities purchase agreement with certain investors who agreed to invest an aggregate of $1.629 million in the Company in exchange for an aggregate of 9,050,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share.
	On April 24, 2018, the company entered into a securities purchase agreement with Xiuping Cai, who agreed to invest an aggregate of $1.8 million in the Company in exchange for an aggregate of 10,000,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share.
	See Note 12 for additional securities purchase agreements entered into by the Company following June 30, 2018.

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Restricted Cash

6 Months Ended

Jun. 30, 2018

Restricted Cash [Text Block]

4.	Restricted Cash
	Restricted cash represents interest bearing deposits placed with banks to secure banking facilities in the form of loans and notes payable. The funds are restricted from immediate use and are designated for settlement of loans or notes when they become due.

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Trade Receivables

6 Months Ended

Jun. 30, 2018

Trade Receivables [Text Block]

5.	Trade Receivables
	The Company extends credit terms of 15 to 60 days to the majority of its domestic customers, which include third-party distributors, supermarkets and wholesalers; international customers are typically extended 90 days credit.

		6/30/2018			12/31/2017
Trade accounts receivable	$	1,905,783		$	1,534,856
Less : Allowance for doubtful accounts		(650,906	)		(804,937	)
	$	1,254,877		$	729,919

Allowance for doubtful accounts:
Beginning balance	$	(804,937	)	$	(695,547	)
Additions to allowance		-			109,390
Bad debt written-off		154,031			-
Ending balance	$	(650,906	)	$	(804,937	)

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Inventories

6 Months Ended

Jun. 30, 2018

Inventories [Text Block]

6.	Inventories
	Inventories consisted of the following as of June 30, 2018 and December 31, 2017

		6/30/2018		12/31/2017
Raw materials	$	3,090,466	$	2,846,507
Finished goods		7,409,239		7,746,896
	$	10,499,705	$	10,593,403

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Plant and Equipment

6 Months Ended

Jun. 30, 2018

Plant and Equipment [Text Block]

7.	Plant and Equipment
	Property, plant, and equipment consisted of the following as of June 30, 2018 and December 31, 2017:

		6/30/2018			12/31/2017
At Cost:
Buildings	$	20,845,876		$	47,004,352
Machinery and equipment		3,354,932			6,096,099
Office equipment		260,230			433,451
Motor vehicles		71,230			162,330
	$	24,532,268		$	53,696,232
Less : Accumulated depreciation		(7,891,347	)		(17,032,942	)
	$	16,640,921		$	36,663,290

Depreciation expense for the six months ended June 30, 2018 and 2017 was $295,981 and $754,161, respectively.

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Intangible Assets

6 Months Ended

Jun. 30, 2018

Intangible Assets [Text Block]

8. Intangible Assets

		6/30/2018			12/31/2017
At Cost:
Land use rights		13,411,977			15,366,444
Utilities rights		-			-
	$	13,411,977		$	15,366,444
Less : Accumulated amortization		(2,136,569	)		(2,198,574	)
	$	11,275,408		$	13,167,870

All land is owned by the government in China. Land use rights represent the Company’s purchase of usage rights for a parcel of land for a specified duration of time, typically 50 years. Amortization expense for the six months ended June 30, 2018 and 2017 was $137,904 and $761,815, respectively.

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Goodwill

6 Months Ended

Jun. 30, 2018

Goodwill [Text Block]

9.

Goodwill

On August 8, 2015, the Company re-organized its French operations by merging the operations of Conserverie Minerve into its immediate parent Athena, and concurrently, Athena wound up and dissolved Conserverie Minerve. Athena subsequently changed its own legal name to Conserverie Minerve and to continue its business. At the date of acquisition, the net liability of Conserverie Minerve was $3,255,911 (EUR2,968,089); the purchase consideration paid for the Athena (aka Conserverie Minerve) was $2,100,000. The acquisition of Athena and its then subsidiaries gave rise to goodwill in the amount of $6,786,928. As of December 31, 2015, the surviving business entity, Conserverie Minerve, on a post merged basis, recognized net operating losses during the year ended December 31, 2015. As of December 31, 2015, the Company was unable to determine if the Conserverie Minerve would be able to generate future profit and positive operating cash flows to justify the carrying value of goodwill in the amount of $6,786,928 ; accordingly, the Company elected to write-off the goodwill that it had recognized during its acquisition of Conserverie Minerve. Conserverie Minerve had a goodwill of its own that had accumulated over the years as result of its acquisition of subsidiaries; at December 31, 2015, the outstanding balance was $3,219,172. As mentioned in “Note 2 - Summary of Significant Accounting Policies-Principles of Consolidation”, Conserverie Minerve has been liquidated and the Company no longer has any interest in Conserverie Minerve; accordingly, all remaining goodwill was written off during the year ended December 31, 2017.

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Bank Loans

6 Months Ended

Jun. 30, 2018

Bank Loans [Text Block]

10.	Bank Loans
	Bank loans include bank overdrafts, short-term bank loans, and current portion of long-term loan, which consisted of the following as of June 30, 2018 and December 31, 2017:

Short-term Bank Loans		6/30/2018		12/31/2017
Loan from Industrial and Commercial Bank of China,
• Interest rate at 6.955% per annum; due 4/20/2016		3,803,758		3,838,005
• Interest rate at 4.30% per annum; due 4/30/2017		-		1,152,658
• Interest rate at 4.30% per annum; due 5/30//2017		-		1,211,059
• Interest rate at 4.30% per annum; due 6/29/2017		-		1,152,658
• Interest rate at 4.30% per annum; due 8/2/2017		-		1,014,339
Loan from China Minsheng Bank Corporation, Linyi Branch
•Interest rate at 5.98% per annum due 9/22/2016		1,509,838		1,535,340
Loan from Agricultural Bank of China, Luotian Branch
• Interest rate at 5.65% per annum due 4/22/2017		1,501,350		1,536,877
• Interest rate at 9.72% per annum due 1/14/2017		1,501,350		1,536,877
• Interest rate at 9.72% per annum due 2/4/2017		443,905		461,063
• Interest rate at 9.72% per annum due 9/7/2017		90,681		92,213
Bank of Ningbo,
• Interest rate at 7.80% per annum due 10/27/2016		1,209,080		1,229,502
Hankou Bank, Guanggu Branch,
• Interest rate at 6.85% per annum due 10/24/2016		1,368,702		1,391,820
Postal Savings Bank of China,
• Interest rate at 9.72% per annum due 7/27/2016		392,951		399,588
China Construction Bank,
• Interest rate at 6.18% per annum due 11/29/2016		-		768,439
Huaxia Bank,
• Interest rate at 5.66% per annum due 5/19/2017		-		1,536,877
City of Linyi Commercial Bank, Junan Branch,
• Interest rate at 8.4% per annum due 2/16/2016		-		1,535,334
• Interest rate at 8.4% per annum due 11/24/2016		-		3,073,756
Hubei Jincai Credit and Financial Services Co. Ltd.
• Interest rate at 9.00% per annum due 1/12/2017		302,270		307,375
	$	12,123,886	$	23,773,780

The short-term loans, which are denominated in Renminbi and Euros, were primarily obtained for general working capital. If not otherwise specifically indicated above, short-term bank loans are guaranteed either by other companies within the group, or by personnel in senior management positions within the group. As of June 30, 2018, all short-term loans have been in default and have not been repaid. The Company is in negotiations to renew these loans or modify the repayment terms and principal amount due. The short-term loans, which are denominated in Renminbi, were primarily obtained for general working capital. If not otherwise specifically indicated above, short-term bank loans are guaranteed either by other companies within the group, or by personnel in senior management positions within the group.

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Current Portion Long Term Debt

6 Months Ended

Jun. 30, 2018

Current Portion Long Term Debt [Text Block]

11.	Current Portion – Long Term Debt
	Current portions of notes payable, debentures, and long-term debt consisted of the following as of June 30, 2018 and December 31, 2017:

		6/30/2018		12/31/2017
Debenture issued by 5 private placement holders underwritten by Guoyuan Securities Co., Ltd.
• Interest rate at 10% per annum due 8/28/2016	$	9,359,792	$	9,517,882
Debenture issued by 2 private placement holders underwritten by Daiwa SSC Securities Co. Ltd.
• Interest rate at 9.5% per annum due 11/8/2015		-		15,368,774
Loans from Deutsche Investitions-und Entwicklungsgesellschaft mbH (“DEG”)
• Interest rate at 5.510% per annum due 3/15/2015		-		1,875,000
• Interest rate at 5.510% per annum due 9/15/2015		-		1,875,000
• Interest rate at 5.510% per annum due 3/15/2016		-		1,875,000
	$	9,359,792	$	30,511,656

The Company began repaying principal and interest on the loan with DEG in semi-annual installments on December 15, 2012. As of June 30, 2018 and December 31, 2017, the Company had not repaid any principal nor interest. The loan was collateralized with the following terms:

(a.)	A first ranking mortgage in the amount of about USD $12,000,000 on the Company’s land and building in favor of DEG.
(b.)	A share pledge, by Mr. Si Chen (a major shareholder, and Chairman and CEO of the Company) as the sponsor of the loan, to secure approximately USD $12,000,000 of the loan. The Company defaulted on its loan with DEG; accordingly, on December 7, 2016, DEG exercised its rights to foreclose on 10,794,066 shares pledged by Mr. Si Chen. The loan remains outstanding.
(c.)	The total amount of the first ranking mortgage as indicated in the Loan Agreement (Article 12(1)(a)) and the value of the pledged shares by Mr. Si Chen (Loan Agreement (Article 12(1)(a))) should be at least USD24,000,000 in aggregate.
(d.)	A personal guarantee by Mr. Si Chen in form and substance satisfactory to DEG.

The Company is in default of the debentures that were issued by Guoyuan Securities and Daiwa SSC Securities and negotiating with the debenture holders to extend repayment terms.

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Equity

6 Months Ended

Jun. 30, 2018

Equity [Text Block]

12.	Equity
	On December 28, 2017, the Company entered into a securities purchase agreement, pursuant to which Yi Li and Beili Zhu, each an individual residing in the People’s Republic of China, agreed to invest an aggregate of $1.275 million in the Company in exchange for an aggregate of 7,500,000 shares of the Company’s common stock, representing a purchase price of $0.17 per share. The transaction closed on January 23, 2018.
	On April 14, 2018, the Company entered into a securities purchase agreement, pursuant to which Zongqi Shi, Aidi Zhang, Qiong Chen, Yi Li, Beili Zhu, Yanbo Wang, Jinhui Chen and Guoyang Zeng, each an individual residing in the People’s Republic of China, agreed to invest an aggregate of $1.629 million in the Company in exchange for an aggregate of 9,050,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share. As of June 30, 2018, there is $342,000 subscription receivable from this transaction and the funds were subsequently received on August 13, 2018.
	On April 24, 2018, the Company entered into a securities purchase agreement, pursuant to which Xiupin Cai, an individual residing in the People’s Republic of China, agreed to invest an aggregate of $1,800,000 in the Company in exchange for an aggregate of 10,000,000 shares of the Company’s common stock, representing a purchase price of $0.18 per share. As of June 30, 2018, there is $1,800,000 subscription receivable from this transaction and the funds were subsequently received on August 13, 2018.
	See Note 12 for additional securities purchase agreements entered into by the Company following June 30, 2018.
	There were 64,824,490 shares of common stock outstanding as of June 30, 2018.
	For the six months ended June 30, 2017 and 2018, the Company had not issued shares as stock compensation to employees.

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Taxes [Text Block]

13.	Income Taxes
	All of the Company’s continuing operations are located in the PRC. The corporate income tax rate in the PRC is 25%.
	The following tables provide the reconciliation of the differences between the statutory and effective tax expenses following as of June 30, 2018 and 2017:

		6/30/2018			6/30/2017
Loss attributed to PRC continuing operations	$	(116,339	)	$	(8,670,100	)
Loss attributed to U.S. operations		-			(1,549,963	)
Income before tax		(116,339	)		(10,220,063	)
PRC Statutory Tax at 25% Rate		-			-
Effect of tax exemption granted		-			-
Income tax	$	-		$	-

Per Share Effect of Tax Exemption
		6/30/2018		6/30/2017
Effect of tax exemption granted	$	-	$	-
Weighted-Average Shares Outstanding Basic		50,802,391		38,274,490
Per share effect	$	-	$	-

The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows of June 30, 2018 and 2017:

	6/30/2018	6/30/2017
U.S. federal statutory income tax rate	21%	35%
Higher (lower) rates in PRC, net	4%	- 10%
Non recognized deferred tax benefits in the PRC	- 25%	- 25%
The Company’s effective tax rate	0%	0%

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Earnings/(Loss) Per Share

6 Months Ended

Jun. 30, 2018

Earnings/(Loss) Per Share [Text Block]

14.	Earnings/(Loss) Per Share
	Components of basic and diluted earnings per share were as follows:

		For the six months ended
		June 30,
		2018		2017
Basic and diluted (loss) earnings per share numerator:
(Loss) income from continuing operations (attributable) available to common stockholders	$	(116,339	)	(10,220,063	)
(Loss) income from discontinued operations (attributable) available to common stockholders		(652,612	)	(7,579,109	)
(Loss) income (attributable) available to common stockholders		(769,377	)	(16,359,323	)
Basic and diluted (loss) earnings per share denominator:
Original Shares:		38,274,490		38,274,490
Additions from Actual Events -Issuance of Common Stock		26,550,000		-
Basic Weighted Average Shares Outstanding		64,825,000		38,274,490
Loss per share from continuing operations - Basic and diluted		(0.00	)	(0.27	)
Income (loss) per share from discontinued operations - Basic and diluted		(0.01	)	(0.20	)
Loss per share - Basic and diluted		(0.02	)	(0.47	)
Weighted Average Shares Outstanding - Basic and diluted		50,802,391		38,274,490

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Lease Commitments

6 Months Ended

Jun. 30, 2018

Lease Commitments [Text Block]

15.	Lease Commitments
	During the year ended December 31, 2013, the Company entered into three operating lease agreements leasing three plots of land where greenhouses are maintained to grow seasonal crops. The leases were signed by Junan Hongrun Foodstuff Co., Ltd. and they expire on April 25, 2033, May 19, 2033, and June 19, 2033.

The minimum future lease payments for these properties at June 30, 2018 are as follows:

Period		Greenhouse 1		Greenhouse 2		Greenhouse 3
Year 1	$	74,420	$	89,258	$	10,711
Year 2		74,420		89,258		10,711
Year 3		74,420		89,258		10,711
Year 4		74,420		89,258		10,711
Year 5		74,420		89,258		10,711
Year 5 and thereafter		769,007		929,771		112,466
	$	1,141,107	$	1,376,061	$	166,021

The outstanding lease commitments for the three greenhouses as of June 30, 2018 was $2,683,189.

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Capital Lease Obligations

6 Months Ended

Jun. 30, 2018

Capital Lease Obligations [Text Block]

16.	Capital Lease Obligations
	The Company leases certain machinery and equipment under leases classified as capital leases. The following is a schedule showing the future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of June 30, 2018:

Year 1	$	1,056,976
Year 2		-
Year 3		-
Total minimum lease payments		1,056,976
Less : Amount representing estimated executory costs (such as taxes, maintenance, and insurance), including profit thereon, included in total minimum lease payments		-
Net minimum lease payments		1,056,976
Less : Amount representing interest
Present value of net minimum lease payments	$	1,056,976

Reflected in the balance sheet as current and noncurrent obligations under capital leases of $1,056,976 and $0, respectively.

As of June 30, 2018, the present value of minimum lease payments due within one year is $1,056,976.

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Contingencies and Litigation

6 Months Ended

Jun. 30, 2018

Contingencies and Litigation [Text Block]

17.	Contingencies and Litigation
	There is a lawsuit currently pending in the Linyi City Intermediate People’s Court of Shandong Province, which was initially filed by Shandong Lorain, a subsidiary of the Company, against Junan Hengji Real Estate Development Co., Ltd. ("Junan Hengji") in November 2013 at Linyi City Intermediate People’s Court of Shandong Province (the "Linyi Court"). Shandong Lorain added Jiangsu Hengan Industrial Investment Group Co., Ltd. ("Heng An Investment") as a co-defendant after the case was first filed at the Linyi Court.
	In December 2010, Shandong Lorain and Junan Hengji entered into a cooperative development agreement (the "Agreement") and in March 2011, Heng An Investment, an affiliated company of Junan Hengji, also entered into the Agreement with Shandong Lorain to jointly develop the project with Junan Hengji. Pursuant to the Agreement, Junan Henji and Heng An Investment are required to pay Shandong Lorain a total of RMB20 million (approximately $3,225,806) fixed return according to the development status of the project developed by Junan Hengji and Heng An Investment. In deciding to bring suit, Shandong Lorain and the Company evaluated the potential claims against Junan Hengji and Heng An Investment, disputes between the parties with respect to out-of-pocket expenses paid by Junan Hengji, as well as the litigation fee that is required to be paid to the court based upon the amount claimed. Ultimately, Shandong Lorain decided to file the lawsuit with Linyi Court to claim a fixed return of RMB10 million (approximately $1,499,390).
	In January 2014, the Linyi Court held its first trial session. During the trial, Heng An Investment filed a counterclaim against Shandong Lorain for repayment of out-of-pocket expenses which would offset the entire fixed return plus additional unpaid expenses of RMB4,746,927 (approximately $765,633). Shandong Lorain responded that Heng An Investment does not have standing to file the counter-claim because the out- of-pocket payments were made by Junan Hengji. In November 2014, the court held a second trial session and completed its discovery process. On March 21, 2015, Shandong Lorain received the Linyi Court’s decision that rejected Shandong Lorain’s claim for RMB10,000,000 against Junan Hengji and Heng An Investment. On April 3, 2015, Shandong Lorain appealed the decision to the Supreme Court of Shandong Province.
	In November 2015, the Supreme Court of Shandong Province vacated the decision of the Linyi Court and remanded the case back to the Linyi Court for a retrial. The retrial took place on April 25, 2016, at the Linyi City Intermediate People’s Court, and the decision thereon is currently pending.
	Shandong Lorain, a subsidiary of the Company, withdraw the lawsuit in 2018.

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Discontinued Operations

6 Months Ended

Jun. 30, 2018

Discontinued Operations [Text Block]

18.	Discontinued Operations
	The Company has reclassified the results of operations and the financial position of Shandong Lorain Dongguan Lorain and Junan Hongrun as discontinued operations. Selected details regarding those discontinued operations are provided below.

Results of Operations

		For the six			For the six
		months ended			months ended
		6/30/2018			6/30/2017
Sales	$	14,267		$	541,377
Cost of Sales		-			616,694
Gross Profit		14,267			(75,317	)
Operating Expenses		666,879			2,595,668
Other Income (Expenses)		-			(4,908,125	)
Earnings before Taxes		(652,612	)		(7,579,110	)
Taxes		-			-
Net Income	$	(652,612	)	$	(7,579,110	)
Financial Position
		At			At
		6/30/2018			12/31/2017
Current Assets	$	3,871,313		$	790,550
Non-Current Assets		21,572,848			896,099
Total Assets	$	25,444,161		$	1,686,649
Current Liabilities	$	49,637,739		$	9,610,994
Total Long Term Liabilities		-			-
Total Liabilities	$	49,637,739		$	9,610,994
Net Assets	$	(24,193,578	)	$	(7,924,345	)
Total Liabilities & Net Assets	$	25,444,161		$	1,686,649

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Risks

6 Months Ended

Jun. 30, 2018

Risks [Text Block]

19. Risks

A. Credit risk

The Company’s deposits are made with banks located in the PRC. They do not carry federal deposit insurance and may be subject to loss of the banks become insolvent.

Since the Company’s inception, the age of account receivables has been less than one year indicating that the Company is subject to minimal risk borne from credit extended to customers.

B. Interest risk

The company is subject to interest rate risk when short term loans become due and require refinancing.

C. Economic and political risks

The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

D. Environmental risks

The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential damage to employees, equipment, and local environment.

E. Inflation Risk

Management monitors changes in prices levels. Historically inflation has not materially impacted the company’s financial statements; however, significant increases in the price of raw materials and labor that cannot be passed to the Company’s customers could adversely impact the Company’s results of operations.

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Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Text Block]

20. Subsequent Events

On July 12, 2018, the Company entered into a securities purchase agreement with Yunpeng Zhang and Zhongquan Sun, who agreed to invest an aggregate of $750,000 in the Company in exchange for an aggregate of 3,750,000 shares of the Company’s common stock, representing a purchase price of $0.20 per share.

On August 8, 2018, the Company, our chairman, Si Chen, and our direct and indirect subsidiaries, Planet Green Holdings Corp., a British Virgin Islands company that is 100% owned by us (“Planet Green”), Junan Hongrun Foodstuff Co., Ltd., a company incorporated in the PRC (“Junan”), Shandong Lorain Co., Ltd., a company incorporated in the PRC (“Shandong Lorain”), International Lorain Holdings, Inc., a Cayman Islands company that is 100% owned by us (“ILH”), Shandong Greenpia Foodstuff Co., Ltd., a business company incorporated in the PRC (“Shandong Greenpia”), Beijing Lorain Co., Ltd., a business company incorporated in the PRC (“Beijing Lorain”) and Luotian Lorain Co., Ltd., a business company incorporated in the PRC (“Luotian Lorain”), entered into a share exchange agreement (the “Sale Agreement”).

The Sale Agreement provides for:

• the sale of 100% of the equity interest in ILH by us to Mr. Chen (the “Disposition”); and

• the purchase of (A) 50% of the issued and outstanding shares of Shandong Greenpia, (B) 30% of Beijing Lorain and (C) 100% of the issued and outstanding shares of Luotian Lorain (collectively, the “Planet Green Shares”) by Planet Green from ILH (the “Exchange” and, collectively with the Disposition, the “Sale Transaction”).

The Planet Green Shares will be directly owned by Planet Green, and indirectly by us, following the closing of the Sale Transaction.

On August 8, 2018, the Company entered into an amended and restated securities purchase agreement with Yimin Jin, our chief strategy officer and director, and Hongxiang Yu, our chairman nominee and director, pursuant to which the Purchasers agreed to invest an aggregate of $10 million in the Company in exchange for an aggregate of 58,823,530 shares of our common stock, representing a purchase price of $0.17 per share. The agreement contains customary representations and warranties by the Company and customary closing conditions. In addition, the closing of the transaction is conditioned upon (i) the consummation of the Sale Transaction, which transaction is subject to the approval of our stockholders at our 2018 annual meeting, (ii) the re-election of Messrs. Jin and Yu to the Company’s board of directors at our 2018 annual meeting and (iii) the approval of certain amendment to our charter, to change the name of our company and to effect a stock split of the outstanding shares of our common stock, at our 2018 annual meeting. If consummated, the Company expects to use the proceeds of the financing for general corporate purposes. We also believe that, if consummated, the Sale Transaction will improve our balance sheet.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Method of accounting [Policy Text Block]

Method of accounting

Management has prepared the accompanying financial statements and these notes in accordance to generally accepted accounting principles in the United States of America; the Company maintains its general ledger and journals with the accrual method accounting.

Principles of consolidation [Policy Text Block]

Principles of consolidation

The accompanying consolidated financial statements include the assets, liabilities, and results of operations of the Company, and its subsidiaries, which are listed below:

	Place of	Attributable equity	Registered
Name of Company	incorporation	interest %	capital
International Lorain Holding Inc.	Cayman Islands	100.0	$46,659,135
Junan Hongrun Foodstuff Co., Ltd.	PRC	100.0	44,861,741
Shandong Lorain Co., Ltd.	PRC	80.2	12,123,985
Beijing Lorain Co., Ltd.	PRC	100.0	1,540,666
Luotian Lorain Co., Ltd.	PRC	100.0	3,797,774
Shandong Greenpia Foodstuff Co., Ltd.	PRC	100.0	2,303,063
Dongguan Lorain Co., Ltd.	PRC	100.0	149,939
Lorain Foodstuff (Shenzhen) Co., Ltd.	PRC	VIE	500,000

In 2014, the Company invested $2,100,000 in Athena/Minerve Group whereby the Company controlling shareholder of Minerve. Minerve conducted operations in manufacturing, packaging and sales activities in France and import and storage operations in Portugal. During the years ended December 31, 2015, the financial position and results of operations of Minerve were accounted for as subsidiaries in the Company’s financial statements; however, during the year ended December 31, 2016, Minerve became insolvent and compelled into bankruptcy by creditors, and, ultimately liquidation. Accordingly, the Company lost control of Minerve and wrote off the value of its investment in Minerve. All receivables due by Minerve to subsidiaries still controlled by the Company have been written-off.

Management has eliminated all significant inter-company balances and transactions in preparing the accompanying consolidated financial statements. Ownership interests of subsidiaries that the Company does not wholly-own are accounted for as non-controlling interests.

Shandong Economic Development Investment Corporation, which is a PRC state-owned entity, holds 19.8% equity interest in Shandong Lorain.

Consolidation of Variable Interest Entity

VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. Any VIE with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. Management makes ongoing reassessments of whether the Company is the primary beneficiary of Shenzhen Lorain.

On December 14, 2017, the Company formed Shenzhen Lorain as a limited company under the laws of the PRC. Through Shandong Greenpia, the Company entered into exclusive arrangements with Shenzhen Lorain and its shareholders that give the Company the ability to substantially influence Shenzhen Lorain’s daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of Shenzhen Lorain and it consolidates its accounts as a VIE. The Company’s arrangements with Shenzhen Lorain consist of the following agreements:

1.    Consultation and Service Agreement, dated December 14, 2017. Under this agreement entered into between Shandong Greenpia Foodstuff Co., Ltd. and Lorain Foodstuff (Shenzhen) Co., Ltd.

2.    Business Cooperation Agreement, dated December 14, 2017. Under this agreement entered into between Shandong Greenpia Foodstuff Co., Ltd. and Lorain Foodstuff (Shenzhen) Co., Ltd.

3.    Equity Pledge Agreement, dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd.

4.    Equity Option Agreement, dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd.

5.    Voting Rights Proxy and Financial Supporting Agreement dated December 14, 2017. Under this agreement entered into between Mingyue Cai, Shandong Greenpia Foodstuff Co., Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd.

Discontinued operations [Policy Text Block]

Discontinued operations

In 2017, the Company discontinued the operations in Shandong Lorain Co. Ltd. and Dongguan Lorain Co., Ltd. As a result, the financial results of these two subsidiaries are presented as discontinued operations.

In the first quarter of 2018, the Company’s board of directors resolved to discontinue the operations of Junan Hongrun Foodstuff Co. Ltd.

Use of estimates [Policy Text Block]

Use of estimates

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates.

Cash and cash equivalents [Policy Text Block]

Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Investment securities [Policy Text Block]

Investment securities

The Company classifies securities it holds for investment purposes into trading or available-for-sale. Trading securities are bought and held principally for the purpose of selling them in the near term. All securities not included in trading securities are classified as available-for-sale.

Trading and available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on trading securities are included in the net income. Unrealized holding gains and losses, net of the related tax effect, on available for sale securities are excluded from net income and are reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.

A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in carrying amount to fair value. The impairment is charged as an expense to the statement of income and comprehensive income and a new cost basis for the security is established. To determine whether impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year end, and forecasted performance of the investee.

Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective-interest method. Dividend and interest income are recognized when earned.

Trade receivables [Policy Text Block]

Trade receivables

Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

Inventories [Policy Text Block]

Inventories

Inventories consist of raw materials and finished goods which are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, inbound shipping costs, and allocated overhead. The Company applies the weighted average cost method to its inventory.

Advances and prepayments to suppliers [Policy Text Block]

Advances and prepayments to suppliers

The Company makes advance payment to suppliers and vendors for the procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers the applicable amount is reclassified from advances and prepayments to suppliers to inventory.

Plant and equipment [Policy Text Block]

Plant and equipment

Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. The Company’s typically applies a salvage value of 0% to 10%. The estimated useful lives of the plant and equipment are as follows:

Buildings	20 - 40 years
Landscaping, plant and tree	30 years
Machinery and equipment	1 - 10 years
Motor vehicles	10 years
Office equipment	5 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company’s results of operations. The costs of maintenance and repairs are recognized to expenses as incurred; significant renewals and betterments are capitalized.

Construction in progress and prepayments for equipment [Policy Text Block]

Construction in progress and prepayments for equipment

Construction in progress and prepayments for equipment represent direct and indirect acquisition and construction costs for plants, and costs of acquisition and installation of related equipment. Amounts classified as construction in progress and prepayments for equipment are transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Depreciation is not provided for assets classified in this account.

Land use rights [Policy Text Block]

Land use rights

Land use rights are carried at cost and amortized on a straight-line basis over a specified period. Amortization is provided using the straight-line method over 40 - 50 years.

Goodwill [Policy Text Block]

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. The Company conducts an annual assessment of its goodwill for impairment. If the carrying value of its goodwill exceeds its fair value, then impairment has incurred; accordingly, a charge to the Company’s results of operations will be recognized during the period. Fair value is generally determined using a discounted expected future cash flow analysis.

Accounting for the impairment of long-lived assets [Policy Text Block]

Accounting for the impairment of long-lived assets

The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate the adequate profits. Impairment is present if the carrying amount of an asset is less than its expected future undiscounted cash flows.

If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed are reported at the lower of the carrying amount or fair value less costs to sell.

Statutory reserves [Policy Text Block]

Statutory reserves

Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital.

Foreign currency translation [Policy Text Block]

Foreign currency translation

The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are the Renminbi (RMB) and the Euro (EUR). The Company’s assets and liabilities are translated into United States dollars from RMB and EUR at year-end exchange rates, and its revenues and expenses are translated at the average exchange rate during the period. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

	6/30/2018	12/31/2017	6/30/2017
Period/year end RMB: US$ exchange rate	6.6166	6.5067	6.7744
Period/annual average RMB: US$ exchange rate	6.4568	6.6133	6.8607

The RMB is not freely convertible into foreign currencies and all foreign exchange transactions must be conducted through authorized financial institutions.

Revenue recognition [Policy Text Block]

Revenue recognition

The Company recognizes revenue when persuasive evidence of arrangement exists, the price has been fixed or is determinable, the delivery has been completed and no other significant obligations of the Company exists, and collectability of payment is reasonably assured. Payments received prior to all of the foregoing criteria are recorded as customer deposits. Recorded revenue is derived from the value of goods invoiced less value-added tax (VAT).

Advertising [Policy Text Block]

Advertising

All advertising costs are expensed as incurred.

Shipping and handling [Policy Text Block]

Shipping and handling

All outbound shipping and handling costs are expensed as incurred.

Research and development [Policy Text Block]

Research and development

All research and development costs are expensed as incurred.

Retirement benefits [Policy Text Block]

Retirement benefits

Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as part of overhead.

Income taxes [Policy Text Block]

Income taxes

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

Comprehensive income [Policy Text Block]

Comprehensive income

The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders.

Earnings per share [Policy Text Block]

Earnings per share

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive effects of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warrants are calculated using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

Financial instruments [Policy Text Block]

Financial instruments

The Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

• Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets.

• Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.

Commitments and contingencies [Policy Text Block]

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Unaudited interim financial information [Policy Text Block]

Unaudited interim financial information

These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2018.

The consolidated balance sheets and certain comparative information as of December 31, 2017 are derived from the audited consolidated financial statements and related notes for the year ended December 31, 2017 (“2017 Annual Financial Statements”), included in the Company’s 2017 Annual Report on Form 10-K. These unaudited interim condensed consolidated financial statements should be read in conjunction with the 2017 Annual Financial Statements.

Recent accounting pronouncements [Policy Text Block]

Recent accounting pronouncements

In January 2017, the FASB issued guidance which simplifies the accounting for goodwill impairment. The updated guidance eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, determined in Step 1. The Company is currently evaluating the impact on the financial statements of this guidance.

In January 2017, the FASB amended the existing accounting standards for business combinations. The amendments clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

The Company is evaluated the timing and the impact of the aforesaid guidance on the financial statements.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of the Consolidating Subsidiaries [Table Text Block]

	Place of	Attributable equity	Registered
Name of Company	incorporation	interest %	capital
International Lorain Holding Inc.	Cayman Islands	100.0	$46,659,135
Junan Hongrun Foodstuff Co., Ltd.	PRC	100.0	44,861,741
Shandong Lorain Co., Ltd.	PRC	80.2	12,123,985
Beijing Lorain Co., Ltd.	PRC	100.0	1,540,666
Luotian Lorain Co., Ltd.	PRC	100.0	3,797,774
Shandong Greenpia Foodstuff Co., Ltd.	PRC	100.0	2,303,063
Dongguan Lorain Co., Ltd.	PRC	100.0	149,939
Lorain Foodstuff (Shenzhen) Co., Ltd.	PRC	VIE	500,000

Schedule of Estimated Useful Lives [Table Text Block]

Buildings	20 - 40 years
Landscaping, plant and tree	30 years
Machinery and equipment	1 - 10 years
Motor vehicles	10 years
Office equipment	5 years

Schedule of Average Exchange Rates [Table Text Block]

	6/30/2018	12/31/2017	6/30/2017
Period/year end RMB: US$ exchange rate	6.6166	6.5067	6.7744
Period/annual average RMB: US$ exchange rate	6.4568	6.6133	6.8607

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Trade Receivables (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Trade Accounts Receivable [Table Text Block]

		6/30/2018			12/31/2017
Trade accounts receivable	$	1,905,783		$	1,534,856
Less : Allowance for doubtful accounts		(650,906	)		(804,937	)
	$	1,254,877		$	729,919

Schedule of Trade Accounts Receivable Allowance [Table Text Block]

Allowance for doubtful accounts:
Beginning balance	$	(804,937	)	$	(695,547	)
Additions to allowance		-			109,390
Bad debt written-off		154,031			-
Ending balance	$	(650,906	)	$	(804,937	)

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Inventories (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Inventories [Table Text Block]

		6/30/2018		12/31/2017
Raw materials	$	3,090,466	$	2,846,507
Finished goods		7,409,239		7,746,896
	$	10,499,705	$	10,593,403

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Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Property, Plant and Equipment [Table Text Block]

		6/30/2018			12/31/2017
At Cost:
Buildings	$	20,845,876		$	47,004,352
Machinery and equipment		3,354,932			6,096,099
Office equipment		260,230			433,451
Motor vehicles		71,230			162,330
	$	24,532,268		$	53,696,232
Less : Accumulated depreciation		(7,891,347	)		(17,032,942	)
	$	16,640,921		$	36,663,290

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Intangible Assets [Table Text Block]

		6/30/2018			12/31/2017
At Cost:
Land use rights		13,411,977			15,366,444
Utilities rights		-			-
	$	13,411,977		$	15,366,444
Less : Accumulated amortization		(2,136,569	)		(2,198,574	)
	$	11,275,408		$	13,167,870

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Bank Loans (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Short-term Bank Loans [Table Text Block]

Short-term Bank Loans		6/30/2018		12/31/2017
Loan from Industrial and Commercial Bank of China,
• Interest rate at 6.955% per annum; due 4/20/2016		3,803,758		3,838,005
• Interest rate at 4.30% per annum; due 4/30/2017		-		1,152,658
• Interest rate at 4.30% per annum; due 5/30//2017		-		1,211,059
• Interest rate at 4.30% per annum; due 6/29/2017		-		1,152,658
• Interest rate at 4.30% per annum; due 8/2/2017		-		1,014,339
Loan from China Minsheng Bank Corporation, Linyi Branch
•Interest rate at 5.98% per annum due 9/22/2016		1,509,838		1,535,340
Loan from Agricultural Bank of China, Luotian Branch
• Interest rate at 5.65% per annum due 4/22/2017		1,501,350		1,536,877
• Interest rate at 9.72% per annum due 1/14/2017		1,501,350		1,536,877
• Interest rate at 9.72% per annum due 2/4/2017		443,905		461,063
• Interest rate at 9.72% per annum due 9/7/2017		90,681		92,213
Bank of Ningbo,
• Interest rate at 7.80% per annum due 10/27/2016		1,209,080		1,229,502
Hankou Bank, Guanggu Branch,
• Interest rate at 6.85% per annum due 10/24/2016		1,368,702		1,391,820
Postal Savings Bank of China,
• Interest rate at 9.72% per annum due 7/27/2016		392,951		399,588
China Construction Bank,
• Interest rate at 6.18% per annum due 11/29/2016		-		768,439
Huaxia Bank,
• Interest rate at 5.66% per annum due 5/19/2017		-		1,536,877
City of Linyi Commercial Bank, Junan Branch,
• Interest rate at 8.4% per annum due 2/16/2016		-		1,535,334
• Interest rate at 8.4% per annum due 11/24/2016		-		3,073,756
Hubei Jincai Credit and Financial Services Co. Ltd.
• Interest rate at 9.00% per annum due 1/12/2017		302,270		307,375
	$	12,123,886	$	23,773,780

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Current Portion Long Term Debt (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Current Portions of Notes Payable [Table Text Block]

		6/30/2018		12/31/2017
Debenture issued by 5 private placement holders underwritten by Guoyuan Securities Co., Ltd.
• Interest rate at 10% per annum due 8/28/2016	$	9,359,792	$	9,517,882
Debenture issued by 2 private placement holders underwritten by Daiwa SSC Securities Co. Ltd.
• Interest rate at 9.5% per annum due 11/8/2015		-		15,368,774
Loans from Deutsche Investitions-und Entwicklungsgesellschaft mbH (“DEG”)
• Interest rate at 5.510% per annum due 3/15/2015		-		1,875,000
• Interest rate at 5.510% per annum due 9/15/2015		-		1,875,000
• Interest rate at 5.510% per annum due 3/15/2016		-		1,875,000
	$	9,359,792	$	30,511,656

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of the Differences Between the Statutory and Effective Tax Expenses [Table Text Block]

		6/30/2018			6/30/2017
Loss attributed to PRC continuing operations	$	(116,339	)	$	(8,670,100	)
Loss attributed to U.S. operations		-			(1,549,963	)
Income before tax		(116,339	)		(10,220,063	)
PRC Statutory Tax at 25% Rate		-			-
Effect of tax exemption granted		-			-
Income tax	$	-		$	-

Schedule of Per Share Effect of Tax Exemption [Table Text Block]

Per Share Effect of Tax Exemption
		6/30/2018		6/30/2017
Effect of tax exemption granted	$	-	$	-
Weighted-Average Shares Outstanding Basic		50,802,391		38,274,490
Per share effect	$	-	$	-

Schedule of Difference Between the U.S. Federal Statutory Income Tax Rate and the Companys Effective Tax Rate [Table Text Block]

	6/30/2018	6/30/2017
U.S. federal statutory income tax rate	21%	35%
Higher (lower) rates in PRC, net	4%	- 10%
Non recognized deferred tax benefits in the PRC	- 25%	- 25%
The Company’s effective tax rate	0%	0%

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Earnings/(Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Earnings Per Share [Table Text Block]

		For the six months ended
		June 30,
		2018		2017
Basic and diluted (loss) earnings per share numerator:
(Loss) income from continuing operations (attributable) available to common stockholders	$	(116,339	)	(10,220,063	)
(Loss) income from discontinued operations (attributable) available to common stockholders		(652,612	)	(7,579,109	)
(Loss) income (attributable) available to common stockholders		(769,377	)	(16,359,323	)
Basic and diluted (loss) earnings per share denominator:
Original Shares:		38,274,490		38,274,490
Additions from Actual Events -Issuance of Common Stock		26,550,000		-
Basic Weighted Average Shares Outstanding		64,825,000		38,274,490
Loss per share from continuing operations - Basic and diluted		(0.00	)	(0.27	)
Income (loss) per share from discontinued operations - Basic and diluted		(0.01	)	(0.20	)
Loss per share - Basic and diluted		(0.02	)	(0.47	)
Weighted Average Shares Outstanding - Basic and diluted		50,802,391		38,274,490

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Lease Commitments (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Period		Greenhouse 1		Greenhouse 2		Greenhouse 3
Year 1	$	74,420	$	89,258	$	10,711
Year 2		74,420		89,258		10,711
Year 3		74,420		89,258		10,711
Year 4		74,420		89,258		10,711
Year 5		74,420		89,258		10,711
Year 5 and thereafter		769,007		929,771		112,466
	$	1,141,107	$	1,376,061	$	166,021

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Capital Lease Obligations (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]

Year 1	$	1,056,976
Year 2		-
Year 3		-
Total minimum lease payments		1,056,976
Less : Amount representing estimated executory costs (such as taxes, maintenance, and insurance), including profit thereon, included in total minimum lease payments		-
Net minimum lease payments		1,056,976
Less : Amount representing interest
Present value of net minimum lease payments	$	1,056,976

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

		For the six			For the six
		months ended			months ended
		6/30/2018			6/30/2017
Sales	$	14,267		$	541,377
Cost of Sales		-			616,694
Gross Profit		14,267			(75,317	)
Operating Expenses		666,879			2,595,668
Other Income (Expenses)		-			(4,908,125	)
Earnings before Taxes		(652,612	)		(7,579,110	)
Taxes		-			-
Net Income	$	(652,612	)	$	(7,579,110	)
Financial Position
		At			At
		6/30/2018			12/31/2017
Current Assets	$	3,871,313		$	790,550
Non-Current Assets		21,572,848			896,099
Total Assets	$	25,444,161		$	1,686,649
Current Liabilities	$	49,637,739		$	9,610,994
Total Long Term Liabilities		-			-
Total Liabilities	$	49,637,739		$	9,610,994
Net Assets	$	(24,193,578	)	$	(7,924,345	)
Total Liabilities & Net Assets	$	25,444,161		$	1,686,649

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Summary of Significant Accounting Policies (Narrative) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2014
Finite-Lived Intangible Asset, Useful Life	50 years
Minimum [Member]
Property, Plant and Equipment, Salvage Value, Percentage	0.00%
Finite-Lived Intangible Asset, Useful Life	40 years
Statutory reserve	10.00%
Maximum [Member]
Property, Plant and Equipment, Salvage Value, Percentage	10.00%
Finite-Lived Intangible Asset, Useful Life	50 years
Statutory reserve	50.00%
Shandong Lorain Co., Ltd. [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	19.80%
Minerve [Member]
Payments to Acquire Interest in Subsidiaries and Affiliates		$ 2,100,000

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Going Concern (Narrative) (Details) - USD ($)		1 Months Ended		3 Months Ended		6 Months Ended
	Apr. 14, 2018	Apr. 24, 2018	Dec. 28, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net loss				$ 45,776	$ 1,206,399	$ 116,339	$ 10,220,063
Working capital deficit				$ 59,153,945		59,153,945
Issuance of common stock for cash (shares)	9,050,000	10,000,000	7,500,000	7,500,000
Proceeds from Issuance of Common Stock	$ 1,629,000	$ 1,800,000	$ 1,275,000	$ 1,275,000		$ 2,562,000	$ 0
Sale of Stock, Price Per Share	$ 0.18	$ 0.18	$ 0.17

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Plant and Equipment (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Depreciation expense	$ 295,981	$ 754,161

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Intangible Assets (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Finite-Lived Intangible Asset, Useful Life	50 years
Amortization expense	$ 137,904	$ 761,815

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Goodwill (Narrative) (Details) - Minerve [Member]	Aug. 08, 2015 USD ($)	Dec. 31, 2015 USD ($)	Aug. 08, 2015 EUR (€)
Net liability at the date of acquisition	$ 3,255,911		€ 2,968,089
Payments to Acquire Businesses, Gross	2,100,000
Goodwill	$ 6,786,928	$ 3,219,172

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Current Portion Long Term Debt (Narrative) (Details)	6 Months Ended
	Jun. 30, 2018 USD ($) shares
Participating Mortgage Loans, Mortgage Obligations, Amount	$ 12,000,000
Shares foreclosed during period | shares	10,794,066
Value of first ranking mortgage and pledged shares	$ 24,000,000

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Equity (Narrative) (Details) - USD ($)		1 Months Ended		3 Months Ended	6 Months Ended
	Apr. 14, 2018	Apr. 24, 2018	Dec. 28, 2017	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017	Mar. 31, 2018	Dec. 31, 2017
Proceeds from Issuance of Common Stock	$ 1,629,000	$ 1,800,000	$ 1,275,000	$ 1,275,000	$ 2,562,000	$ 0
Issuance of common stock for cash (shares)	9,050,000	10,000,000	7,500,000	7,500,000
Sale of Stock, Price Per Share	$ 0.18	$ 0.18	$ 0.17
Subscription receivable	$ 342,000	$ 1,800,000		$ (2,142,000)	$ (2,142,000)			$ 0
Common Stock, Shares, Outstanding				64,824,490	64,824,490		64,824,490	38,274,490

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Income Taxes (Narrative) (Details)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	21.00%	35.00%
PRC [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	25.00%

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Lease Commitments (Narrative) (Details)	Jun. 30, 2018 USD ($)
Outstanding lease commitments	$ 2,683,189

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Capital Lease Obligations (Narrative) (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Capital lease - current portion	$ 1,056,976	$ 1,074,829
Capital lease - long term portion	0
Capital Leases, Future Minimum Payments, Next Rolling Twelve Months	$ 1,056,976

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Contingencies and Litigation (Narrative) (Details)	1 Months Ended
	Jan. 31, 2014 USD ($)	Jan. 31, 2014 CNY (¥)	Dec. 31, 2010 USD ($)	Dec. 31, 2010 CNY (¥)
Gain contingency, initial damages			$ 3,225,806	¥ 20,000,000
Gain contingency, damages sought		¥ 10,000,000	$ 1,499,390	¥ 10
Loss Contingency, Damages Sought, Value	$ 765,633	¥ 4,746,927

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Subsequent Events (Narrative) (Details) - USD ($)				1 Months Ended		3 Months Ended	6 Months Ended
	Aug. 08, 2018	Jul. 12, 2018	Apr. 14, 2018	Apr. 24, 2018	Dec. 28, 2017	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017
Proceeds from Issuance of Common Stock			$ 1,629,000	$ 1,800,000	$ 1,275,000	$ 1,275,000	$ 2,562,000	$ 0
Issuance of common stock for cash (shares)			9,050,000	10,000,000	7,500,000	7,500,000
Sale of Stock, Price Per Share			$ 0.18	$ 0.18	$ 0.17
Planet Green [Member]
Ownership percentage	100.00%
International Lorain Holdings, Inc. [Member]
Ownership percentage	100.00%
Subsequent Event [Member]
Proceeds from Issuance of Common Stock	$ 10,000,000	$ 750,000
Issuance of common stock for cash (shares)	58,823,530	3,750,000
Sale of Stock, Price Per Share	$ 0.17	$ 0.20
Sale Agreement							Sale of 100% of equity interest in ILH by us to Mr. Chen; Purchase of (A) 50% of the issued and outstanding shares of Shandong Greenpia, (B) 30% of Beijing Lorain and (C) 100% of the issued and outstanding sharesa of Luotian Lorain.

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Schedule of the Consolidating Subsidiaries (Details)	Jun. 30, 2018 USD ($)
International Lorain Holding Inc. [Member]
Attributable equity interest %	100.00%
Registered capital	$ 46,659,135
Junan Hongrun Foodstuff Co., Ltd. [Member]
Attributable equity interest %	100.00%
Registered capital	$ 44,861,741
Shandong Lorain Co., Ltd. [Member]
Attributable equity interest %	80.20%
Registered capital	$ 12,123,985
Beijing Lorain Co., Ltd. [Member]
Attributable equity interest %	100.00%
Registered capital	$ 1,540,666
Luotian Lorain Co., Ltd. [Member]
Attributable equity interest %	100.00%
Registered capital	$ 3,797,774
Shandong Greenpia Foodstuff Co., Ltd. [Member]
Attributable equity interest %	100.00%
Registered capital	$ 2,303,063
Dongguan Lorain Co., Ltd. [Member]
Attributable equity interest %	100.00%
Registered capital	$ 149,939
Lorain Foodstuff (Shenzhen) Co., Ltd. [Member]
Registered capital	$ 500,000

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Schedule of Estimated Useful Lives (Details)	6 Months Ended
	Jun. 30, 2018
Buildings [Member] | Minimum [Member]
Plant and Equipment, Useful Life	20 years
Buildings [Member] | Maximum [Member]
Plant and Equipment, Useful Life	40 years
Landscaping, plant and tree [Member]
Plant and Equipment, Useful Life	30 years
Machinery and equipment [Member] | Minimum [Member]
Plant and Equipment, Useful Life	1 year
Machinery and equipment [Member] | Maximum [Member]
Plant and Equipment, Useful Life	10 years
Office equipment [Member]
Plant and Equipment, Useful Life	5 years
Motor vehicles [Member]
Plant and Equipment, Useful Life	10 years

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Schedule of Average Exchange Rates (Details)	6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Period/year end exchange rate	6.6166	6.7744	6.5067
Period/annual average exchange rate	6.4568	6.8607	6.6133

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Schedule of Trade Accounts Receivable (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Trade accounts receivable	$ 1,905,783	$ 1,534,856
Less: Allowance for doubtful accounts	(650,906)	(804,937)	$ (695,547)
Trade receivables, net	$ 1,254,877	$ 729,919

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Schedule of Trade Accounts Receivable Allowance (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Beginning balance	$ (804,937)	$ (695,547)
Additions to allowance	0	109,390
Bad debt written-off	154,031	0
Ending balance	$ (650,906)	$ (804,937)

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Schedule of Inventories (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Raw materials	$ 3,090,466	$ 2,846,507
Finished goods	7,409,239	7,746,896
Inventories	$ 10,499,705	$ 10,593,403

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Schedule of Property, Plant and Equipment (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Plant and Equipment, At Cost	$ 24,532,268	$ 53,696,232
Less: Accumulated depreciation	(7,891,347)	(17,032,942)
Plant and equipment, net	16,640,921	36,663,290
Buildings [Member]
Plant and Equipment, At Cost	20,845,876	47,004,352
Machinery and equipment [Member]
Plant and Equipment, At Cost	3,354,932	6,096,099
Office equipment [Member]
Plant and Equipment, At Cost	260,230	433,451
Motor vehicles [Member]
Plant and Equipment, At Cost	$ 71,230	$ 162,330

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Schedule of Intangible Assets (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Intangible assets, At Cost	$ 13,411,977	$ 15,366,444
Less: Accumulated amortization	(2,136,569)	(2,198,574)
Intangible assets, net	11,275,408	13,167,870
Land use rights [Member]
Intangible assets, At Cost	13,411,977	15,366,444
Utilities rights [Member]
Intangible assets, At Cost	$ 0	$ 0

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Schedule of Short-term Bank Loans (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Short-term bank loans	$ 12,123,886	$ 23,773,780
Loan from Industrial and Commercial Bank of China 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	6.955%
Short-term bank loans	$ 3,803,758	3,838,005
Loan from Industrial and Commercial Bank of China 2 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	4.30%
Short-term bank loans	$ 0	1,152,658
Loan from Industrial and Commercial Bank of China 3 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	4.30%
Short-term bank loans	$ 0	1,211,059
Loan from Industrial and Commercial Bank of China 4 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	4.30%
Short-term bank loans	$ 0	1,152,658
Loan from Industrial and Commercial Bank of China 5 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	4.30%
Short-term bank loans	$ 0	1,014,339
Loan from China Minsheng Bank Corporation, Linyi Branch 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	5.98%
Short-term bank loans	$ 1,509,838	1,535,340
Loan from Agricultural Bank of China, Luotian Branch 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	5.65%
Short-term bank loans	$ 1,501,350	1,536,877
Loan from Agricultural Bank of China, Luotian Branch 2 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	9.72%
Short-term bank loans	$ 1,501,350	1,536,877
Loan from Agricultural Bank of China, Luotian Branch 3 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	9.72%
Short-term bank loans	$ 443,905	461,063
Loan from Agricultural Bank of China, Luotian Branch 4 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	9.72%
Short-term bank loans	$ 90,681	92,213
Bank of Ningbo 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	7.80%
Short-term bank loans	$ 1,209,080	1,229,502
Hankou Bank, Guanggu Branch 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	6.85%
Short-term bank loans	$ 1,368,702	1,391,820
Postal Savings Bank of China, 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	9.72%
Short-term bank loans	$ 392,951	399,588
China Construction Bank 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	6.18%
Short-term bank loans	$ 0	768,439
Huaxia Bank 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	5.66%
Short-term bank loans	$ 0	1,536,877
City of Linyi Commercial Bank, Junan Branch 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	8.40%
Short-term bank loans	$ 0	1,535,334
City of Linyi Commercial Bank, Junan Branch 2 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	8.40%
Short-term bank loans	$ 0	3,073,756
Hubei Jincai Credit and Financial Services Co. Ltd. 1 [Member]
Short-term Debt, Percentage Bearing Fixed Interest Rate	9.00%
Short-term bank loans	$ 302,270	$ 307,375

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Schedule of Current Portions of Notes Payable (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Long-term debt current portion	$ 9,359,792	$ 30,511,656
Debenture issued by 5 private placement holders underwritten by Guoyuan Securities Co., Ltd. 1 [Member]
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	10.00%
Long-term debt current portion	$ 9,359,792	9,517,882
Debenture issued by 2 private placement holders underwritten by Daiwa SSC Securities Co. Ltd. 1 [Member]
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	9.50%
Long-term debt current portion	$ 0	15,368,774
Loans from Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) 1 [Member]
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	5.51%
Long-term debt current portion	$ 0	1,875,000
Loans from Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) 2 [Member]
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	5.51%
Long-term debt current portion	$ 0	1,875,000
Loans from Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) 3 [Member]
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	5.51%
Long-term debt current portion	$ 0	$ 1,875,000

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Schedule of the Differences Between the Statutory and Effective Tax Expenses (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
(Loss) income attributed to PRC continuing operations			$ (116,339)	$ (8,670,100)
Loss attributed to U.S. operations			0	(1,549,963)
Income before tax	$ (45,776)	$ (1,206,399)	$ (116,339)	$ (10,220,063)
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate			21.00%	35.00%
PRC Statutory Tax at 25% Rate			$ 0	$ 0
Effect of tax exemption granted			0	0
Provision for income taxes	$ 0	$ 0	$ 0	$ 0
PRC [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate			25.00%
PRC Statutory Tax at 25% Rate			$ 25

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Schedule of Per Share Effect of Tax Exemption (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Effect of tax exemption granted	$ 0	$ 0
Weighted average shares outstanding basic	50,802,391	38,274,490
Per share effect	$ 0	$ 0

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Schedule of Difference Between the U.S. Federal Statutory Income Tax Rate and the Companys Effective Tax Rate (Details)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	21.00%	35.00%
Higher (lower) rates in PRC, net	4.00%	10.00%
Non recognized deferred tax benefits in the PRC	25.00%	25.00%
The Companys effective tax rate	0.00%	0.00%

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Schedule of Earnings Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
(Loss) income from continuing operations (attributable) available to common stockholders			$ (116,339)	$ (10,220,063)
(Loss) income from discontinued operations (attributable) available to common stockholders	$ (665,658)	$ (1,623,555)	(652,612)	(7,579,109)
(Loss) income (attributable) available to common stockholders	$ (709,277)	$ (1,763,776)	$ (769,377)	$ (16,359,323)
Original Shares	38,274,490	38,274,490	38,274,490	38,274,490
Additions from Actual Events -Issuance of Common Stock			26,550,000	0
Basic Weighted Average Shares Outstanding			64,825,000	38,274,490
Loss per share from continuing operations - Basic and diluted	$ 0.00	$ (0.03)	$ 0.00	$ (0.27)
Loss per share from discontinued operations - Basic and diluted	$ (0.01)	$ (0.04)	(0.01)	(0.20)
Loss per share - Basic and diluted			$ (0.02)	$ (0.47)
Weighted Average Shares Outstanding - Basic and diluted			50,802,391	38,274,490

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Schedule of Future Minimum Rental Payments for Operating Leases (Details)	Jun. 30, 2018 USD ($)
Total	$ 2,683,189
Greenhouse 1 [Member]
Year 1	74,420
Year 2	74,420
Year 3	74,420
Year 4	74,420
Year 5	74,420
Year 5 and thereafter	769,007
Total	1,141,107
Greenhouse 2 [Member]
Year 1	89,258
Year 2	89,258
Year 3	89,258
Year 4	89,258
Year 5	89,258
Year 5 and thereafter	929,771
Total	1,376,061
Greenhouse 3 [Member]
Year 1	10,711
Year 2	10,711
Year 3	10,711
Year 4	10,711
Year 5	10,711
Year 5 and thereafter	112,466
Total	$ 166,021

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Schedule of Future Minimum Lease Payments for Capital Leases (Details)	Jun. 30, 2018 USD ($)
Year 1	$ 1,056,976
Year 2	0
Year 3	0
Total minimum lease payments	1,056,976
Less: Amount representing estimated executory costs (such as taxes, maintenance, and insurance), including profit thereon, included in total minimum lease payments	0
Net minimum lease payments	1,056,976
Present value of net minimum lease payments	$ 1,056,976

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Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Earnings before Taxes	$ (665,658)	$ (1,623,555)	$ (652,612)	$ (7,579,109)
Current Assets	3,871,313		3,871,313		$ 790,550
Non-Current Assets	21,572,848		21,572,848		896,099
Current Liabilities	49,637,739		49,637,739		9,610,994
Plant and Equipment, At Cost	24,532,268		24,532,268		53,696,232
Discontinued Operations [Member]
Sales			14,267	541,377
Cost of sales			0	616,694
Gross profit			14,267	(75,317)
Operating expenses			666,879	2,595,668
Other income (expenses)			0	(4,908,125)
Earnings before Taxes			(652,612)	(7,579,110)
Taxes			0	0
Net Income			(652,612)	$ (7,579,110)
Current Assets	3,871,313		3,871,313		790,550
Non-Current Assets	21,572,848		21,572,848		896,099
Total Assets	25,444,161		25,444,161		1,686,649
Current Liabilities	49,637,739		49,637,739		9,610,994
Total Long Term Liabilities	0		0		0
Total Liabilities	49,637,739		49,637,739		9,610,994
Net Assets	(24,193,578)		(24,193,578)		(7,924,345)
Plant and Equipment, At Cost	$ 25,444,161		$ 25,444,161		$ 1,686,649