EX-99.1 2 ea138313ex99-1_ittechpack.htm PRESS RELEASE DATED MARCH 23, 2021, ANNOUNCING FINANCIAL RESULTS AND OPERATIONAL RESULTS OF THE COMPANY FOR THE FOURTH QUARTER AND FISCAL YEAR ENDED DECEMBER 31, 2020

Exhibit 99.1

 

IT Tech Packaging, Inc. Announces Fourth Quarter and Fiscal Year 2020 Financial Results

 

Company to Host Earnings Conference Call on Wednesday, March 24, 2021, at 8:00 am ET

 

BAODING, China, March 23, 2021 /PRNewswire/ -- IT Tech Packaging, Inc. (NYSE American: ITP) (“IT Tech Packaging” or the “Company”), a leading manufacturer and distributor of diversified paper products in North China, today announced its unaudited financial results for the fourth quarter and audited financial results for the fiscal year ended December 31, 2020.

 

Fourth Quarter 2020 Financial Results

 

   For the Three Months Ended December 31, 
($ millions)  2020   2019   % Change 
Revenues   32.48    33.61    -3.4%
Regular Corrugating Medium Paper (“CMP”)*   19.68    19.61    0.3%
Light-Weight CMP**   5.24    5.08    3.1%
Offset Printing Paper   4.88    7.16    -31.9%
Tissue Paper Products   2.65    1.75    51.3%
Face Masks   0.04    NM    NM 
                
Gross profit   0.75    5.60    -86.7%
Gross profit (loss) margin   2.3%   16.7%   -14.4pp****
Regular Corrugating Medium Paper (“CMP”)*   1.4%   15.4%   -14.0pp****
Light-Weight CMP**   3.9%   18.3%   -14.4pp****
Offset Printing Paper   13.6%   33.7%   -20.1pp****
Tissue Paper Products***   -15.0%   -43.1%   28.1pp****
Face Masks   5.81%   NM    NM 
                
 Operating income (loss)   -1.97    3.19    -161.7%
 Net income   -2.69    2.16    -224.8%
 EBITDA   1.56    6.98    -77.6%
 Basic and Diluted earnings (loss) per share   -0.06    0.10    -160.0%

 

*Products from PM6
**Products from PM1
***Products from PM8 and PM9
**** pp represents percentage points

  

Revenue slightly decreased by 3.4% to $32.48 million, primarily attributable to a decrease in sales volume of offset printing paper.

 

Gross profit decreased by 86.7% to $0.75 million. Total gross margin decreased by 14.4 percentage point to 2.3%.

 

Loss from operations was $1.97 million, compared to income from operations of $3.19 million for the same period of last year.

 

Net loss was $2.69 million, or loss of $0.06 per basic and diluted share, compared to net income of $2.16 million, or $0.10 per basic and diluted share, for the same period of last year.

 

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) decreased by 77.6% to $1.56 million.

 

Mr. Zhenyong Liu, Chairman and Chief Executive Officer of the Company, commented, “We continued to making improvements in the sales volume of tissue paper products and posted slight decrease in sales of CMP products for this quarter. Our total revenue had a slight decline of 3.4% to $32.5 million but we managed to grow sales from tissue paper products by 51.3% to a total volume of 3,165 tonnes for this quarter. The average selling prices (ASPs) of our products for this quarter increased by 5.6% from Q3 2020, or a minor growth compared to the same period last year (Q4 2019).

 

“We took a quick recovery from the impact caused by global outbreaks of COVID-19 pandemic, posting growing revenues from sales of tissue paper, regular and light-weight CMP products. Our production and sales of tissue paper products have been growing up steadily since the launch of PM8 and PM9 in December 2018 and November 2019.

 

“Currently we are in the process to apply for surgical face masks production license which we expect to boost both our sales and margins in the very near future. Though on-site inspection on our production facilities by the authorities was delayed by the pandemic, we are expecting final review results by local food and drug administration in Hebei province. We anticipate to obtain the license once the relevant review works are finished.”

 

1

 

  

Revenue

 

For the fourth quarter of 2020, total revenue decreased by $1.1 million, or 3.4%, to $32.5 million from $33.6 million for the same period of last year. The decrease in total revenue was mainly due to the decrease in sales volume of CMP and offset printing paper.

 

The following table summarizes revenue, volume and ASP by product for the fourth quarter of 2020 and 2019, respectively:

 

   For the Three Months Ended December 31, 
   2020   2019 
   Revenue
($’000)
   Volume
(tonne)
   ASP
($/tonne)
   Revenue
($’000)
   Volume
(tonne)
   ASP
($/tonne)
 
Regular CMP   19,677    45,210    435    19,610    47,063    417 
Light-Weight CMP   5,242    12,417    422    5,083    12,582    404 
Offset Printing Paper   4,877    7,895    618    7,162    10,450    685 
Tissue Paper Products   2,648    3,164    837    1,751    2,558    684 
Total   32,444    68,686    472    33,606    72,654    463 
                               
   Revenue
($’000)
   Volume
(thousand pieces)
   ASP
($/thousand pieces)
   Revenue
($’000)
   Volume
($/thousand pieces)
   ASP
($/thousand pieces)
 
Face Masks   35    445    79     NM     NM     NM 

 

Revenue from CMP, including both regular CMP and light-Weight CMP, increased by $0.2 million, or 0.9%, to $24.9 million and accounted for 76.7% of total revenue for the fourth quarter of 2020, compared to $24.7 million, or 73.5% of total revenue, for the same period of last year. The Company sold 57,627 tonnes of CMP at an ASP of $432/tonne in the fourth quarter of 2020, compared to 59,646 tonnes at an ASP of $414/tonne in the same period of last year.

 

Of the total CMP sales, revenue from regular CMP increased by $0.1 million, or 0.3%, to $19.7 million, resulting from sales of 45,210 tonnes at an ASP of $435/tonne, during the fourth quarter of 2020, compared to revenue of $19.6 million, resulting from sales of 47,063 tonnes at an ASP of $417/tonne, for the same period of last year. Revenue from light-weight CMP increased by $0.2 million, or 3.1%, to $5.2 million, resulting from sales of 12,417 tonnes at an ASP of $422/tonne for the fourth quarter of 2020, compared to revenue of $5.1 million, resulting from sales of 12,583 tonnes at an ASP of $404/tonne for the same period of last year.

 

Revenue from offset printing paper decreased by $2.3 million, or 31.9%, to $4.9 million for the fourth quarter of 2020, from $7.2 million for the same period of last year. The Company sold 7,895 tonnes of offset printing paper at an ASP of $618/tonne in the fourth quarter of 2020, compared to 10,450 tonnes at an ASP of $685/tonne in the same period of last year.

 

2

 

 

Revenue from tissue paper products increased by $0.9 million, or 51.3%, to $2.6 million, resulting from sales of 3,165 tonnes at an ASP of $837/tonne, for the fourth quarter of 2020, compared to revenue of $1.7 million, resulting from sales of 2,558tonnes at an ASP of $684/tonne for the same period of last year.

 

Revenue generated from selling face masks was $0.04 million for the fourth quarter ended December 31, 2020. The Company sold 445 thousand pieces of face masks in the fourth quarter of 2020.

 

Gross Profit and Gross Margin

 

Total cost of sales increased by $3.7 million, or 13.2%, to $31.7 million for the fourth quarter of 2020 from $28.0 million for the same period of last year. For paper products, overall cost of sales per tonne was $462 for the fourth quarter of 2020, compared to $388 for the same period of last year. The increase in overall cost of sales was mainly due to the increased manufacturing overhead costs and increased material costs, specifically higher average unit purchase costs of recycled paper board and recycled white scrap paper in the fourth quarter of 2020. Costs of sales per tonne for regular CMP, light-weight CMP, offset printing paper, and tissue paper products were $429, $406, $534, and $962, respectively, for the fourth quarter of 2020, compared to $353, $330, $454 and $979, respectively, for the same period of last year. Total gross profit was $0.7 million for the fourth quarter of 2020, compare to the gross profit of $5.6 million for the same period of last year as a result of factors described above. Overall gross margin was 2.3% for the fourth quarter of 2020, compared to 16.7% for the same period of last year. Gross profit (loss) margins for regular CMP, light-weight CMP, offset printing paper, tissue paper products and face mask products were 1.4%, 3.9%, 13.6%, -15.0% and 5.81%, respectively, for the fourth quarter of 2020, compared to 15.4%, 18.3%, 33.7%,-45.1%,-43.1 and nil, respectively, for the same period of last year.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses (“SG&A”) increased by $0.3 million, or 14.6%, to $2.7 million for the fourth quarter of 2020 from $2.4 million for the same period of last year. The increase was mainly due to issuance of 2,000,000 shares of common stock valued at $1,200,000 to officers and directors under the Company’s omnibus equity incentive plan.

 

Income (loss) from Operations

 

Loss from operations was $2.0 million for the fourth quarter of 2020, compared to income from operations of $3.2 million for the same period of last year. The decrease in income from operations was primarily due to increased SG&A expenses and decreased gross profit this quarter as discussed above. Operating margin was -6.1% for the fourth quarter of 2020, compared to operating margin of 9.5% for the same period of last year.

 

Net Income (Loss)

 

Net loss was $2.7 million, or $0.06 loss per basic and diluted share, for the fourth quarter of 2020, compared to net income of $2.2 million, or $0.10 per basic and diluted share, for the same period of last year.

 

EBITDA

 

EBITDA was $1.6 million for the fourth quarter of 2020, compared to $7.0 million for the same period of last year.

 

Note 1: Non-GAAP Financial Measures

 

In addition to our U.S. GAAP results, this press release includes a discussion of EBITDA, a non-GAAP financial measure as defined by the Securities and Exchange Commission (“SEC”). The Company defines EBITDA as net income before interest, income taxes, depreciation and amortization. EBITDA is a key measure used by management to evaluate our results and make strategic decisions. Management believes this measure is useful to investors because it is an indicator of operational performance. Because not all companies use identical calculations, the Company’s presentation of EBITDA may not be comparable to similarly titled measures of other companies, and should not be viewed as an alternative to measures of financial performance or changes in cash flows calculated in accordance with the U.S. GAAP.

 

3

 

 

Reconciliation of Net Income to EBITDA

(Amounts expressed in US$)

 

   For the Three Months Ended
December 31,
 
($ millions)  2020   2019 
Net income (loss)   -2.69    2.16 
Add: Income tax   -0.52    0.87 
Net interest expense   0.28    0.20 
Depreciation and amortization   4.49    3.76 
EBITDA   1.56    6.98 

 

Full Year Ended December 31, 2020 Financial Results

 

   For the Twelve Months Ended December 31, 
($ millions)  2020   2019   % Change 
Revenues   100.94    117.61    -14.2%
Regular Corrugating Medium Paper (“CMP”)*   62.32    72.05    -13.5%
Light-Weight CMP**   16.84    18.78    -10.3%
Offset Printing Paper   12.27    20.44    -40.0%
Tissue Paper Products   8.41    6.35    32.5%
Face Masks   1.10    NM    NM 
                
Gross profit   5.70    13.68    -58.3%
Gross profit (loss) margin   5.6%   11.6%   -6.0pp****
Regular Corrugating Medium Paper (“CMP”)*   5.4%   10.3%   -4.9pp****
Light-Weight CMP**   8.9%   10.1%   -1.2 pp****
Offset Printing Paper   17.3%   31.2%   -13.9pp****
Tissue Paper Products***   -21.7%   -31.5%   9.7pp****
Face Masks   48.1%   NM    NM 
                
Operating income (loss)   -5.46    3.90    -240.0%
Net income   -5.55    2.22    -350.0%
EBITDA   10.16    19.33    -47.4%
Basic and Diluted earnings (loss) per share   -0.21    0.10    -307.9%

 

*Products from PM6
**Products from PM1
***Products from PM8 and PM9
****pp represents percentage points

 

4

 

 

Revenue

 

For the year ended December 31, 2020, total revenue decreased by $16.7 million, or 14.2%, to $100.9 million from $117.6 million for 2019. The decrease in total revenue was mainly due to a decrease in sales volume of Regular CMP, offset printing paper and a decrease in ASPs over all paper products categories. The following table summarizes revenue, volume and ASP by product for the years ended December 31, 2020 and 2019, respectively:

 

   For the Twelve Months Ended December 31, 
   2020   2019 
   Revenue
($’000)
   Volume
(tonne)
   ASP
($/tonne)
   Revenue
($’000)
   Volume
(tonne)
   ASP
($/tonne)
 
Regular CMP   62,325    154,084    404    72,050    168,837    427 
Light-Weight CMP   16,836    42,801    393    18,776    45,310    414 
Offset Printing Paper   12,266    20,358    603    20,436    29,207    700 
Tissue Paper Products   8,415    10,088    834    6,351    6,790    935 
Total   99,841    227,331    439    117,614    250,144    470 
                               
   Revenue
($’000)
   Volume
(thousand pieces)
   ASP
($/thousand pieces)
   Revenue
($’000)
   Volume
($/thousand pieces)
   ASP
($/thousand pieces)
 
Face Masks   1,102    10,301    107     NM      NM     NM  

 

Revenue from CMP, including both regular CMP and light-Weight CMP decreased by $11.7 million, or 12.8%, to $79.2 million, and accounted for 78.4% of total revenue for the year ended December 31, 2020, compared to $90.8 million, or 77.2% of total revenue for 2019. The Company sold 196,885 tonnes of CMP at an ASP of $402/tonne in the year ended December 31, 2020, compared to 214,147 tonnes at an ASP of $424/tonne in 2019.

 

Of the total CMP sales, revenue from regular CMP decreased by $9.7 million, or 13.5%, to $62.3 million, resulting from sales of 154,084 tonnes at an ASP of $404/tonne during the year ended December 31, 2020, compared to revenue of $72.1 million, resulting from sales of 168,837 tonnes at an ASP of $427/tonne for 2019. Revenue from light-weight CMP decreased by $1.9 million, or 10.3%, to $16.8 million, resulting from sales of 42,801 tonnes at an ASP of $393/tonne for the year ended December 31, 2020, compared to revenue of $18.8 million, resulting from sales of 45,310 tonnes at an ASP of $414/tonne for 2019.

 

Revenue from offset printing paper decreased by $8.1 million, or 40.0%, to $12.3 million for the year ended December 31, 2020 from $20.4 million for 2019. The Company sold 20,358 tonnes of offset printing paper at an ASP of $603/tonne in the year ended December 31, 2020, compared to 29,207 tonnes at an ASP of $700/tonne in 2019.

 

Revenue from tissue paper products increased by $2.1 million, or 32.5%, to $8.4 million, resulting from sales of 10,088 tonnes at an ASP of $834/tonne, for the year ended December 31, 2020, compared to revenue of $6.4 million, resulting from sales of 6,790 tonnes at an ASP of $935/tonne for 2019.

 

Revenue generated from selling face masks was $1.1 million for the year ended December 31, 2020. The Company sold 10,301 thousand pieces of face masks for the year ended December 31, 2020.

 

Gross Profit and Gross Margin

 

Total cost of sales decreased by 8.7 million, or 8.4%, to $95.2 million for the year ended December 31, 2020 from $104.0 million for 2019. The decrease in overall cost of sales was mainly due to the decreased sales volume of CMP and offset printing paper in the year ended December 31, 2020. Costs of sales per tonne for regular CMP, light-weight CMP, offset printing paper, tissue paper products were, $383, $358, $498, and $1,015, respectively, for the year ended December 31, 2020 compared to $383, $372, $481, and $1,230, respectively, for 2019.

 

5

 

 

Total gross profit decreased by $8.0 million, or 58.3%, to $5.7 million for the year ended December 31, 2020 from $13.7 million for 2019. Overall gross margin decreased by 6.0 percentage points to 5.6% for the year ended December 31, 2020 from 11.6% for 2019. Gross margins for regular CMP, light-weight CMP, offset printing paper, tissue paper products and face mask products were 5.4%, 8.9%, 17.3%, -21.7% and 48.1%, respectively, for the year ended December 31, 2020, compared to 10.3%, 10.1%, 31.2%, -31.5% and nil, respectively, for 2019.

 

Selling, General and Administrative Expenses

 

SG&A expenses increased by $1.4 million, or 14.1%, to $11.2 million for the year ended December 31, 2020 from $9.8 million for 2019. As a percentage of total revenue, SG&A expenses was 11.1% for the year ended December 31, 2020, compared to 8.3% for 2019.

 

Income (Loss) from Operations

 

Loss from operations increased by $9.4 million, or 240.0%, to $5.5 million for the year ended December 31, 2020 from income from operations of $3.9 million for 2019. Operating loss margin was 5.4% for the year ended December 31, 2020, compared to operating margin of 3.3% for 2019.

 

Net Income (Loss)

 

Net loss increased by $7.8 million, or 350.0%, to $5.6 million, or loss per basic and diluted share of $0.21, for the year ended December 31, 2020, compared to net income of $2.2 million, or earnings per basic and diluted share of $0.10, for 2019.

 

EBITDA

 

EBITDA decreased by $9.1 million, or 47.4%, to $10.2 million for the year ended December 31, 2020 from $19.3 million for 2019.

 

Note 1: Non-GAAP Financial Measures

 

In addition to our U.S. GAAP results, this press release includes a discussion of EBITDA, a non-GAAP financial measure as defined by the Securities and Exchange Commission (“SEC”). The Company defines EBITDA as net income before interest, income taxes, depreciation and amortization. EBITDA is a key measure used by management to evaluate our results and make strategic decisions. Management believes this measure is useful to investors because it is an indicator of operational performance. Because not all companies use identical calculations, the Company’s presentation of EBITDA may not be comparable to similarly titled measures of other companies, and should not be viewed as an alternative to measures of financial performance or changes in cash flows calculated in accordance with the U.S. GAAP.

 

6

 

 

Reconciliation of Net Income to EBITDA

(Amounts expressed in US$)

 

   For the Twelve Months Ended
December 31,
 
($ millions)  2020   2019 
Net income (loss)   -5.55    2.22 
Add: Income tax   -1.10    1.08 
Net interest expense   1.03    0.73 
Depreciation and amortization   15.79    15.30 
EBITDA   10.16    19.33 

 

Cash, Liquidity and Financial Position

 

As of December 31, 2020, the Company had cash and bank balances, short-term debt (including bank loans, current portion of long-term loans from credit union and related party loans), and long-term debt (including loan from credit union) of $4.14 million, $12.16 million and $4.60 million, respectively, compared to $5.84 million, $8.31 million and $7.37 million, respectively, at the end of 2019.

 

Net accounts receivable was $2.39 million as of December 31, 2020, compared to $3.12 million as of December 31, 2019. Net inventory was $1.23 million as of December 31, 2020, compared to $1.61 million at the end of 2019. As of December 31, 2020, the Company had current assets of $14.91 million and current liabilities of $18.34 million, resulting in a working capital deficit of $3.43 million. This was compared to current assets of $24.04 million and current liabilities of $16.84 million, resulting in a working capital of $7.21 million at the end of 2019.

 

Net cash provided by operating activities was $16.14 million for the year ended December 31, 2020, compared to net cash provided by operating activities of $7.53 million for 2019. Net cash used in investing activities was $20.53 million for the year ended December 31, 2020, compared to $7.87 million for 2019. Net cash provided by financing activities was $2.05 million for the year ended December 31, 2020, compared to net cash used in financing activities of $5.77 million for 2019.

 

Recent development

 

In November 2020, the Company completed inviting bids for the 75 tonne per hour biomass boiler procurement for its biomass cogeneration project. Multiple well-known enterprises in the biomass industry participated in tendering opening bids. In February 2021, the Company completed evaluation on the bidding proposals and announced that Tai Shan Group Co., Ltd., a top manufacturer in the biomass industry in China, has won the bid. Installation of the boilers is expected to commence in the near future. The Company expects to participate in the bidding process for urban central heating projects.

 

On January 12, 2021, the Company announced it has submitted its application for the license for its new single-use surgical masks from local food and drug administration in Hebei province. Production of its single-use non-medical face masks was in full capacity as the number of confirmed Covid-19 cases surged again and anti-Covid-19 efforts became increasingly normalized globally. 

 

7

 

 

On January 20, 2021, the Company offered and sold to certain institutional investors an aggregate of 26,181,818 shares of common stock and 26,181,818 warrants to purchase up to 26,181,818 shares of common stock in a best-efforts public offering for gross proceeds of approximately $14.4 million. The purchase price for each share of common stock and the corresponding warrant sold in the offering was $0.55. The warrants are exercisable commencing on January 20, 2021 at an exercise price of $0.55 and will expire on January 20, 2026. The Company intends to use the net proceeds from the offering for general corporate and working capital purposes.

 

On March 1, 2021, the Company offered and sold to the public investors an aggregate of 29,277,866 shares of common stock and 14,638,933 warrants to purchase up to 14,638,933 shares of common stock in a firm commitment underwritten public offering for gross proceeds of approximately $21.9 million. The purchase price for each share of common stock and accompanying warrant sold in the offering was $0.75. The warrants are exercisable commencing on March 1, 2021 at an exercise price of $0.75 and will expire on March 1, 2026. The Company intends to use the net proceeds from the offering for general corporate and working capital purposes.

 

Earnings Conference Call

 

The Company’s management will host a conference call to discuss its fourth quarter and fiscal year 2020 financial results at 8:00 am US Eastern Time on Wednesday, March 24, 2021. To attend the conference call, please use the information below.

 

Conference Topic: IT Tech Packaging Inc. Fourth Quarter and Fiscal Year 2020 Earnings Conference Call and Webcast

 

Date of call: March 24, 2021

 

Time of call: 8:00 AM Eastern Time (8:00 PM Beijing/Hong Kong Time)

 

Conference ID: 8679484

 

To attend the conference call, please register in advance of the conference using the link: http://apac.directeventreg.com/registration/event/8679484 to complete the online registration at least 15 minutes prior to the start of the call. Upon registering, the conference access information including participant dial-in numbers, a Direct Event passcode and a registrant ID will be provided to you via an email.

 

This conference call will be broadcast live on the Internet and can be accessed by all interested parties at https://edge.media-server.com/mmc/p/5soq5wdd. Please access the link at least 15 minutes prior to the start of the call to register, download, and install any necessary audio software.

 

A playback will be available through 11:00 am ET on March 24, 2021 to 8:59 am ET on April 1, 2021. To listen, please dial+1-855-452-5696 if calling fromthe United States, or +61-281-990-299 if calling internationally. Use the conference ID 8679484 to access the replay.

 

8

 

 

About IT Tech Packaging, Inc.

 

Founded in 1996, IT Tech Packaging, Inc. is a leading manufacturer and distributor of diversified paper products in North China. Using recycled paper as its primary raw material (with the exception of its tissue paper products), ITP produces and distributes three categories of paper products: corrugating medium paper, offset printing paper and tissue paper products. With production based in Baoding and Xingtai in North China’s Hebei Province, ITP is located strategically close to the Beijing and Tianjin region, home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products consumption in the country. ITP has been listed on the NYSE American since December 2009. For more information, please visit: http://www.itpackaging.cn/ .

 

Safe Harbor Statements

 

This press release may contain forward-looking statements. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks outlined in the Company’s public filings with the Securities and Exchange Commission, including the Company’s latest annual report on Form 10-K. All information provided in this press release speaks as of the date hereof. Except as otherwise required by law, the Company undertakes no obligation to update or revise its forward-looking statements.

 

For more information, please contact:

 


At the Company Email:

ir@itpackaging.cn

Tel: +86 0312 8698215

 

Investor Relations:
Janice Wang

Phone: +1 571-464-9470 (from U.S.)

+86 13811768559 (from China)

 

9

 

 

IT TECH PACKAGING, INC. 

 

CONSOLIDATED BALANCE SHEETS 

 

AS OF DECEMBER 31, 2020 AND 2019

 

   December 31,   December 31, 
   2020   2019 
ASSETS        
         
Current Assets        
Cash and bank balances  $4,142,437   $5,837,745 
Restricted cash   -    - 
Accounts receivable (net of allowance for doubtful accounts of $34,391 and $59,922 as of December 31, 2020 and December 2019, respectively)   2,389,057    3,119,311 
Inventories   1,233,801    1,607,463 
Prepayments and other current assets   7,051,515    11,613,241 
Due from related parties   92,795    1,863,479 
Total current assets   14,909,605    24,041,239 
           
Prepayment on property, plant and equipment   21,149,749    1,433,445 
Finance lease right-of-use assets, net   2,397,653    - 
Property, plant, and equipment, net   145,142,642    151,616,852 
Value-added tax recoverable   2,566,195    2,621,841 
Deferred tax asset non-current   13,708,630    10,485,053 
           
Total Assets  $199,874,474   $190,198,430 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current Liabilities          
Short-term bank loans  $6,435,348   $6,163,814 
Current portion of long-term loans from credit union   4,996,245    1,605,459 
Lease liability   182,852    - 
Accounts payable   592,391    250,486 
Advance from customers   82,625    98,311 
Due to related parties   727,433    539,985 
Accrued payroll and employee benefits   224,930    291,924 
Other payables and accrued liabilities   4,838,601    6,503,010 
Income taxes payable   259,649    1,382,471 
           
Total current liabilities   18,340,074    16,835,460 
           
Loans from credit union   4,597,772    7,367,908 
Deferred gain on sale-leaseback   387,087    - 
Lease liability - non-current   354,107    - 
Derivative liability   1,115,260    - 
           
Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $17,950,224 and $19,558,568 as of December 31, 2020 and 2019, respectively)   24,794,300    24,203,368 
           
Commitments and Contingencies          
           
Stockholders’ Equity          
Common stock, 500,000,000 shares authorized, $0.001 par value per share, 28,535,816 and 22,054,816 shares issued and outstanding as of December 31, 2020 and December, 31,2019, respectively   28,536    22,055 
Additional paid-in capital   53,989,548    51,155,174 
Statutory earnings reserve   6,080,574    6,080,574 
Accumulated other comprehensive income (loss)   5,740,722    (6,057,537)
Retained earnings   109,240,794    114,794,796 
           
Total stockholders’ equity   175,080,174    165,995,062 
           
Total Liabilities and Stockholders’ Equity  $199,874,474   $190,198,430 

 

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IT TECH PACKAGING, INC. 

 

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) 

 

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

 

   Year Ended 
   December 31, 
   2020   2019 
         
Revenues  $100,943,269   $117,614,886 
           
Cost of sales   (95,241,284)   (103,935,368)
           
Gross Profit   5,701,985    13,679,518 
           
Selling, general and administrative expenses   (11,157,789)   (9,781,719)
Gain on acquisition of a subsidiary   -    - 
           
(Loss) Income from Operations   (5,455,804)   3,897,799 
           
Other Income (Expense):          
Interest income   32,033    64,717 
Subsidy income   220,478    261,136 
Interest expense   (1,026,512)   (926,368)
Loss on derivative liability   (426,055)   - 
           
(Loss) Income before Income Taxes   (6,655,860)   3,297,284 
           
Provision for Income Taxes   1,101,858    (1,076,102)
           
Net (Loss) Income   (5,554,002)   2,221,182 
           
Other Comprehensive Income (Loss)          
Foreign currency translation adjustment   11,798,259    (2,793,585)
           
Total Comprehensive Income (Loss)  $6,244,257   $(572,403)
           
(Losses) Earnings Per Share:          
           
Basic and Diluted (Losses) Earnings per Share  $(0.21)  $0.10 
           
Outstanding – Basic and Diluted   26,498,298    22,034,905 

 

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IT TECH PACACKING, INC. 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

 

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

 

   Year Ended 
   December 31, 
   2020   2019 
Cash Flows from Operating Activities:        
Net income  $(5,554,002)  $2,221,182 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   15,793,854    15,304,039 
Loss on derivative liability   426,055    - 
Allowances for obsolete inventories, net   -    75,719 
(Recovery from) Allowance for bad debts   (28,087)   2,192 
Share-based compensation and expenses   1,256,700    - 
Gain on acquisition of a subsidiary   -    - 
Deferred tax   (2,364,575)   (2,369,683)
Changes in operating assets and liabilities:          
Accounts receivable   923,429    (294,882)
Prepayments and other current assets   5,301,953    (5,392,916)
Inventories   458,878    1,207,958 
Accounts payable   307,198    (372,728)
Advance from customers   (21,281)   99,472 
Notes payable   -    (3,625,921)
Related parties   1,984,619    (1,757,231)
Accrued payroll and employee benefits   (82,516)   82,813 
Other payables and accrued liabilities   (1,105,508)   1,169,967 
Income taxes payable   (1,153,191)   1,180,493 
Net Cash Provided by Operating Activities   16,143,526    7,530,474 
           
Cash Flows from Investing Activities:          
Purchases of property, plant and equipment   (21,106,210)   (6,416,481)
Proceeds from sale of property, plant and equipment   580,206      
Acquisition of a subsidiary   -    (1,450,368)
Net Cash Used in Investing Activities   (20,526,004)   (7,866,849)
           
Cash Flows from Financing Activities:          
Proceeds from issuance of shares and warrants, net   2,273,360    - 
Repayments of related party loans   -    (2,175,553)
Proceeds from short term bank loans   6,090,715    10,152,579 
Proceeds from credit union loans   -    4,206,068 
Repayment of bank loans   (6,237,217)   (17,955,561)
Payment of capital lease obligation   (72,003)   - 
           
Net Cash Provided by (Used in) Financing Activities   2,054,855    (5,772,467)
           
Effect of Exchange Rate Changes on Cash and Cash Equivalents   632,315    (170,838)
           
Net (Decrease) Increase in Cash and Cash Equivalents   (1,695,308)   (6,279,680)
           
Cash, Cash Equivalents and Restricted Cash - Beginning of Year   5,837,745    12,117,425 
           
Cash, Cash Equivalents and Restricted Cash - End of Year  $4,142,437   $5,837,745 
           
Supplemental Disclosure of Cash Flow Information:          
Cash paid for interest, net of capitalized interest cost  $592,140   $926,368 
Cash paid for income taxes  $2,401,191   $2,250,546 
           
Cash and bank balances   4,142,437    5,837,745 
Restricted cash   -    - 
Total cash, cash equivalents and restricted cash shown in the statement of cash flows   4,142,437    5,837,745 

 

 

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