IT Tech Packaging, Inc. Files 10-Q for Period Ended March 31, 2024

TL;DR

<b>IT Tech Packaging, Inc. (ITP) has filed its quarterly report (10-Q) for the period ending March 31, 2024, confirming compliance with SEC filing requirements.</b>

AI Summary

IT TECH PACKAGING, INC. (ITP) filed a Quarterly Report (10-Q) with the SEC on May 10, 2024. IT Tech Packaging, Inc. filed a 10-Q report for the quarterly period ended March 31, 2024. The company is registered with the SEC under file number 001-34577. IT Tech Packaging, Inc. is incorporated in Nevada and has its principal executive offices in Baoding City, Hebei Province, China. The company's common stock trades on the NYSE American under the symbol ITP. IT Tech Packaging, Inc. has submitted all required reports for the preceding 12 months and has been subject to filing requirements for the past 90 days.

Why It Matters

For investors and stakeholders tracking IT TECH PACKAGING, INC., this filing contains several important signals. This filing provides investors with the latest financial performance and operational updates for IT Tech Packaging, Inc. for the first quarter of 2024. As a smaller reporting company, this 10-Q is crucial for understanding the company's financial health and strategic direction in the paper and packaging industry.

Risk Assessment

Risk Level: low — IT TECH PACKAGING, INC. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain any immediately alarming financial or operational disclosures, indicating a routine update.

Analyst Insight

Monitor future 10-Q filings for detailed financial results and management's discussion and analysis to assess performance trends.

Key Numbers

• 2024-03-31 — Quarterly Period End Date (Reported period)
• 2024-05-10 — Filing Date (Date the report was filed)
• 001-34577 — SEC File Number (Registrant's SEC file number)
• ITP — Trading Symbol (Common Stock trading symbol)

Key Players & Entities

• IT TECH PACKAGING, INC. (company) — Filer name
• ITP (company) — Trading Symbol
• NYSE American (company) — Exchange where common stock is registered
• March 31, 2024 (date) — Quarterly period ended date
• 20240510 (date) — Filing date
• 001-34577 (regulator) — Commission file number
• 20-4158835 (regulator) — IRS Employer identification No.
• Nevada (jurisdiction) — State of incorporation

FAQ

Risk Factors

• Filing Requirements [low — regulatory]: The company has filed all required reports for the preceding 12 months and has been subject to filing requirements for the past 90 days, indicating compliance.

Key Dates

• 2024-03-31: Quarterly Period End — The end date for the financial reporting period covered by the 10-Q.
• 2024-05-10: Filing Date — The date the 10-Q report was officially submitted to the SEC.

Key Financial Figures

• $0.001 — ich registered Common Stock, par value $0.001 ITP NYSE American Indicate by check m
• $0 — he registrant's common stock, par value $0.001, outstanding. TABLE OF CONTENTS P

Filing Documents

• ea0205388-10q_ittech.htm (10-Q) — 763KB
• ea020538801ex31-1_ittech.htm (EX-31.1) — 10KB
• ea020538801ex31-2_ittech.htm (EX-31.2) — 10KB
• ea020538801ex32-1_ittech.htm (EX-32.1) — 5KB
• ea020538801ex32-2_ittech.htm (EX-32.2) — 4KB
• image_001.jpg (GRAPHIC) — 96KB
• image_002.jpg (GRAPHIC) — 101KB
• image_003.jpg (GRAPHIC) — 93KB
• image_004.jpg (GRAPHIC) — 88KB
• image_005.jpg (GRAPHIC) — 85KB
• image_006.jpg (GRAPHIC) — 87KB
• 0001213900-24-041827.txt (&nbsp;) — 7774KB
• itp-20240331.xsd (EX-101.SCH) — 79KB
• itp-20240331_cal.xml (EX-101.CAL) — 66KB
• itp-20240331_def.xml (EX-101.DEF) — 326KB
• itp-20240331_lab.xml (EX-101.LAB) — 590KB
• itp-20240331_pre.xml (EX-101.PRE) — 330KB
• ea0205388-10q_ittech_htm.xml (XML) — 682KB

- FINANCIAL

Part I. - FINANCIAL INFORMATION 1 Item 1.

Financial Statements

Financial Statements 1 Item 2.

Management's Discussion and Analysis of Financial Condition

Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 39 Item 4.

Controls and Procedures

Controls and Procedures 39

- OTHER INFORMATION

Part II. - OTHER INFORMATION 40 Item 1.

Legal Proceedings

Legal Proceedings 40 Item 1A.

Risk Factors

Risk Factors 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 3. Defaults Upon Senior Securities 40 Item 4. Mine Safety Disclosures 40 Item 5. Other Information 40 Item 6. Exhibits 40

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements IT TECH PACKAGING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2024 AND DECEMBER 31, 2023 (unaudited) March 31, December 31, 2024 2023 ASSETS Current Assets Cash and bank balances $ 4,514,020 $ 3,918,938 Restricted cash 903,540 472,983 Accounts receivable (net of allowance for doubtful accounts of $ 48,697 and $ 11,745 as of March 31, 2024 and December 31, 2023, respectively) 2,386,177 575,526 Inventories 3,492,364 3,555,235 Prepayments and other current assets 17,677,417 18,981,290 Due from related parties 1,041,314 853,929 Total current assets 30,014,832 28,357,901 Prepayment on property, plant and equipment - - Operating lease right-of-use assets, net 503,221 528,648 Property, plant, and equipment, net 160,205,120 163,974,022 Value-added tax recoverable 1,872,931 1,883,078 Deferred tax asset non-current - - Total Assets $ 192,596,104 $ 194,743,649 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Short-term bank loans $ 845,666 $ 423,567 Current portion of long-term loans 8,116,984 6,874,497 Lease liability 102,154 100,484 Accounts payable 241,779 4,991 Advance from customers 110,787 136,167 Notes payable 246,501 - Due to related parties 730,095 728,869 Accrued payroll and employee benefits 310,687 237,842 Other payables and accrued liabilities 13,869,095 12,912,517 Total current liabilities 24,573,748 21,418,934 Long-term loans 3,241,720 4,503,932 Lease liability - non-current 491,908 483,866 Derivative liability 20 54 Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $ 21,648,803 and $ 20,084,995 as of March 31, 2024 and December 31, 2023, respectively) 28,307,396 26,406,786 Commitments and Contingencies Stockholders' Equity Common stock, 50,000,000 shares authorized, $ 0.001 par value per share, 10,065,920 shares issued and outstanding

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) (1) Organization and Business Background IT Tech Packaging, Inc. (the "Company") was incorporated in the State of Nevada on December 9, 2005, under the name "Carlateral, Inc." Through the steps described immediately below, we became the holding company for Hebei Baoding Dongfang Paper Milling Company Limited ("Dongfang Paper"), a producer and distributor of paper products in China, on October 29, 2007. Effective on August 1, 2018, we changed our corporate name to IT Tech Packaging, Inc.. The name change was effected through a parent/subsidiary short-form merger of IT Tech Packaging, Inc., our wholly-owned Nevada subsidiary formed solely for the purpose of the name change, with and into us. We were the surviving entity. In connection with the name change, our common stock began being traded under a new NYSE symbol, "ITP," and a new CUSIP number, 46527C100, at such time. On June 9, 2022, the Board of Directors of the Company approved a reverse stock split of the Company's issued and outstanding shares of common stock, par value $ 0.001 per share (the "Common Stock"), at a ratio of 1-for-10 (the "Reverse Stock Split"). The Reverse Stock Split become effective on July 7, 2022 (the "Effective Date"), and the shares began trading on the split-adjusted basis on the NYSE American under the Company's existing trading symbol "ITP" at market open on July 8, 2022. The new CUSIP number following the Reverse Stock Split is 46527C 209. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Reverse Stock Split. On October 29, 2007, pursuant to an agreement and plan of merger (the "Merger Agreement"), the Company acquired DongfangZhiye Holding Limited ("Dongfang Holding"), a corporation formed on November 13, 2006 under the laws of the British Virgin Islands, and issued the shareholders of Dongfang Holding

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) To ensure proper compliance of the Company's control over the ownership and operations of Dongfang Paper with certain PRC regulations, on June 24, 2009, the Company entered into a series of contractual agreements (the "Contractual Agreements") with Dongfang Paper and Dongfang Paper Equity Baoding Shengde Paper Co., Ltd. ("Baoding Shengde"), a wholly foreign-owned enterprise in the PRC with an original registered capital of $ 10,000,000 (subsequently increased to $ 60,000,000 in June 2010). Baoding Shengde is mainly engaged in production and distribution of digital photo paper and single-use face masks and is 100 % owned by Shengde Holdings. Prior to February 10, 2010, the Contractual Agreements included (i) Exclusive Technical Service and Business Consulting Agreement, which generally provides that Baoding Shengde shall provide exclusive technical, business and management consulting services to Dongfang Paper, in exchange for service fees including a fee equivalent to 80 % of Dongfang Paper's total annual net profits; (ii) Loan Agreement, which provides that Baoding Shengde will make a loan in the aggregate principal amount of $ 10,000,000 to Dongfang Paper Equity Owners in exchange for each such shareholder agreeing to contribute all of its proceeds from the loan to the registered capital of Dongfang Paper; (iii) Call Option Agreement, which generally provides, among other things, that Dongfang Paper Equity Owners irrevocably grant to Baoding Shengde an option to purchase all or part of each owner's equity interest in Dongfang Paper. The exercise price for the options shall be RMB 1 which Baoding Shengde should pay to each of Dongfang Paper Equity Owner for all their equity interests in Dongfang Paper; (iv) Share Pledge Agreement, which provides that Dongfang Paper Equity

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) As of March 31, 2024 and December 31, 2023, details of the Company's subsidiaries and variable interest entities are as follows: Name Date of Incorporation or Establishment Place of Incorporation or Establishment Percentage of Principal Activity Subsidiary: Dongfang Holding November 13, 2006 BVI 100 % Inactive investment holding Shengde Holdings February 25, 2009 100 % Investment holding Baoding Shengde June 1, 2009 PRC 100 % Paper production and distribution Qianrong July 15, 2021 PRC 100 % New material technology service Variable interest entity ("VIE"): Dongfang Paper March 10, 1996 PRC Control* Paper production and distribution Tengsheng Paper April 07, 2011 PRC Control** Paper production and distribution * Dongfang Paper is treated as a 100 % controlled variable interest entity of the Company. ** Tengsheng Paper is 100 % subsidiary of Dongfang Paper. However, uncertainties in the PRC legal system could cause the Company's current ownership structure to be found to be in violation of any existing and/or future PRC laws or regulations and could limit the Company's ability, through its subsidiary, to enforce its rights under these contractual arrangements. Furthermore, shareholders of the VIE may have interests that are different than those of the Company, which could potentially increase the risk that they would seek to act contrary to the terms of the aforementioned agreements. In addition, if the current structure or any of the contractual arrangements were found to be in violation of any existing or future PRC law, the Company may be subject to penalties, which may include, but not be limited to, the cancellation or revocation of the Company's business and operating licenses, being required to restructure the Company's operations or being required to discontinue the Company's operating activities. The imposition

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) The Company has aggregated the financial information of Dongfang Paper in the table below. The aggregate carrying value of Dongfang Paper's assets and liabilities (after elimination of intercompany transactions and balances) in the Company's condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 are as follows: The Company and its consolidated subsidiaries are not required to provide financial support to the VIE, and no creditor (or beneficial interest holders) of the VIE have recourse to the assets of Company unless the Company separately agrees to be subject to such claims. There are no terms in any agreements or arrangements, implicit or explicit, which require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE does require financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIE. March 31, December 31, 2024 2023 ASSETS Current Assets Cash and bank balances $ 3,876,391 $ 2,807,608 Restricted cash 903,539 472,983 Accounts receivable 2,386,176 575,526 Inventories 3,492,364 3,555,235 Prepayments and other current assets 17,207,523 18,617,351 Due from related parties 288,672 289,173 Total current assets 28,154,665 26,317,876 Operating lease right-of-use assets, net 503,221 528,648 Property, plant, and equipment, net 154,660,801 158,027,099 Deferred tax asset non-current - - Total Assets $ 183,318,687 $ 184,873,623 LIABILITIES Current Liabilities Short-term bank loans $ 422,833 $ - Current portion of long-term loans 4,029,598 2,780,014 Lease liability 102,154 100,484 Accounts payable 241,779 4,991 Advance from customers 110,787 136,167 Accrued payroll and employee benefits 277,891 231,568 Other payables and accrued liabilities 12,730,133 11,843,973 Income taxes payable - - Total

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) (2) Basis of Presentation and Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") for reporting on Form 10-Q. Accordingly, certain information and notes required by the United States of America generally accepted accounting principles ("GAAP") for annual financial statements are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023 of the Company, and its subsidiaries and variable interest entity (which we sometimes refer to collectively as "the Company", "we", "us" or "our"). Principles of Consolidation Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of March 31, 2024 and the results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for any future period. Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments 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 period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates. Valuation of long-lived asse

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