IT Tech Packaging : ITP AR PR FL.pdf

ANNUAL REPORT 2021

Dear Shareholders of IT Tech Packaging, Inc.,

I'd like to take this opportunity to provide you with an update on key achievements of IT Tech Packaging Inc. in 2021, as well as provide an update for 2022 to date. We are pleased with our overall performance in 2021 and expect to continue providing high-quality products to our customers in 2022.

Total sales volume of CMP, offset printing paper and tissue paper products during the period increased by 28.65% to 292,459 tonnes. The Company also sold over 12 million pieces of face masks during fiscal year 2021, effectively diversifying our sources of revenue. We officially obtained FDA approval for surgical mask products in May 2021.

While encountering tremendous challenges associated with COVID-19 pandemic, we strived to provide high-quality products to our customers. As business activities gradually return to normal, we expect to take the necessary steps to strengthen our business resilience and improve our competitive advantages to prepare the Company for growth opportunities ahead. Specifically, we have launched a series of initiatives to optimize our revenue structure and improve our business efficiencies. As a result, the sales volume of CMP and offset printing paper have been significantly improved. The sales volume of our face masks continued growing since the launch of face masks production in 2020.

Looking forward, we will continue our efforts to expand marketing channels, grow our customer base and enhance business relationships with our existing customers. We remain focused on improving our product quality and implementing effective cost control to increase our profitability and operating efficiency. Leveraging our advantages in technology and geography and research and development capacity, we believe our business fundamentals will continue to position us well to capture the opportunities to grow business in the industry and grow in the foreseeable future.

Performance

For the year ended December 31, 2021, total revenue increased by $59.9 million, or 59.4%, to $160.9 million from $100.9 million for 2020. The increase in total revenue was mainly due to an increase in sales volume of CMP and offset printing paper and an increase in ASPs of CMP, offset printing paper and tissue paper products, partially offset by the decrease in sales volume of tissue paper products. Total gross profit increased by $5.3 million, or 93.2%, to $11.0 million for the year ended December 31, 2021 from $5.7 million for 2020. Overall gross margin increased by 1.2 percentage points to 6.9% for the year ended December 31, 2021 from 5.7% for 2020. Net income increased by $6.5 million, or 116.3%, to $0.9 million, or earnings per basic and diluted share of $0.02, for the year ended December 31, 2021, compared to net loss of $5.6 million, or loss per basic and diluted share of $0.21, for 2020. The Company had cash and bank balances of $11.20 million at the end of 2021, compared to $4.14 million at the end of 2020. Net cash used in operating activities was $2.44 million for the year ended December 31, 2021, compared to net cash provided by operating activities of $16.14 million for 2020.

In the first half of 2022, total revenue decreased by $23.47 million, or 33.2%, to $47.27 million from $70.74 million for the same period of last year. The decrease in total revenue was mainly due to the decrease in sales volume of CMP, offset printing paper and tissue paper products.

Key Business Progresses and Initiatives

We continue our efforts to execute strategic initiatives. Since the end of November 2021, the Company has officially started surgical masks production, which complies with China's pharmaceutical industry standard YY0469-2011. The Company's surgical masks have been sold to the local companies in catering or sanitation industries, and the Company has also obtained bidding qualifications from various pharmaceutical companies and hospitals.

The Company obtained qualifications to supply central heating in industrial parks with its combined heat and power generation project utilizing biomass technology ("Biomass CHP Project" or "the Project") and the Project has officially started construction.

The Company received a Level B scale-above Certification as an industrial R&D enterprise institution in Hebei province for the Company's tissue paper research and development center after on-site inspection by regulators. The Company has also been granted a number of new utility patent certificates for paper manufacturing related equipment issued by the State Intellectual Property Office, including equipment testing, screening and filtering, and mixing.

Finally, I would like to thank you for your trust and continued support of ITP and reiterate our commitments to you, our shareholders. We will remain intact and fully dedicated to drive our business growth while seizing upcoming opportunities. We intend to continue implementing our strategic initiatives, which we believe will allow us to achieve greater market penetration and scale up our business, with the goal creating long-term value for our shareholders.

Sincerely,

Mr. Zhenyong Liu

Chairman and Chief Executive Officer

IT Tech Packaging, Inc.

September, 2022

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021

or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________to ______________

Commission file number 001-34577

IT TECH PACKAGING, INC.

(Exact name of registrant as specified in its charter)

Hebei Province, The People's Republic of China 072550

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (86) 312-8698215

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to section 12(g) of the Act:

Common Stock

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes x No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes x No

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. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). x Yes ¨ No

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

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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨

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

The aggregate market value of the voting and non-voting common stock of the registrant held by non-affiliates as of June 30, 2021 was approximately $44,007,387 based upon 93,632,739 shares of common stock held by non-affiliates and the closing price of the common stock of $0.47 on June 30, 2021.

As of March 15, 2022, there were 99,049,900 shares of the registrant's common stock, par value $0.001, outstanding. DOCUMENTS INCORPORATED BY REFERENCE: None.