Tantech Sells Inactive Subsidiary Jikang for $0.7M to Cut Costs

TL;DR

**Tantech is selling an inactive subsidiary for $0.7M to cut costs and streamline operations.**

AI Summary

Tantech Holdings Ltd, through its subsidiary Lishui Xincai Industrial Co., Ltd., is selling its inactive subsidiary, Lishui Jikang Energy Technology Co., Ltd., to Lishui Chida Logistics Co., Ltd. for RMB 5,000,000 (approximately $0.7 million). This sale, agreed upon on December 29, 2023, aims to reduce Tantech's operational costs associated with Jikang and its subsidiary, Zhejiang Tantech Bamboo Technology Co., Ltd., which are not currently generating revenue. This matters to investors because it indicates Tantech is streamlining its operations by shedding non-performing assets, potentially improving its financial efficiency and focus.

Why It Matters

This divestiture shows Tantech Holdings is actively managing its portfolio by offloading non-performing assets, which could lead to improved profitability and a more focused business strategy.

Risk Assessment

Risk Level: low — The sale of an inactive subsidiary for cost reduction is generally a positive or neutral event, reducing potential liabilities without impacting core operations.

Analyst Insight

A smart investor would view this as a minor positive, indicating management is taking steps to improve efficiency by shedding non-performing assets. It's worth monitoring future filings for further strategic divestitures or acquisitions that could impact the company's core business.

Key Numbers

• RMB 5,000,000 — Sale Price (The total amount Lishui Chida Logistics Co., Ltd. will pay for Lishui Jikang Energy Technology Co., Ltd.)
• $0.7 million — Approximate Sale Price (USD) (The approximate U.S. dollar equivalent of the sale price for Lishui Jikang Energy Technology Co., Ltd.)
• 60% — Initial Payment Percentage (The percentage of the purchase price (RMB 3,000,000) to be paid within 15 days of agreement execution.)
• 40% — Final Payment Percentage (The percentage of the purchase price (RMB 2,000,000) to be paid within 15 business days after share transfer registration.)

Key Players & Entities

• Tantech Holdings Ltd (company) — registrant and parent company
• Lishui Xincai Industrial Co., Ltd. (company) — wholly owned subsidiary of Tantech, seller of Jikang
• Lishui Jikang Energy Technology Co., Ltd. (company) — wholly owned subsidiary being sold, currently inactive
• Lishui Chida Logistics Co., Ltd (company) — unrelated third-party buyer
• Zhejiang Tantech Bamboo Technology Co., Ltd (company) — wholly owned subsidiary of Jikang, also being transferred
• RMB 5,000,000 (dollar_amount) — total purchase price for Jikang
• $0.7 million (dollar_amount) — approximate USD equivalent of the purchase price
• December 29, 2023 (date) — date the share transfer agreement was entered into

Forward-Looking Statements

• Tantech Holdings Ltd's operating expenses will decrease in future financial reports due to the elimination of costs associated with Jikang. (Tantech Holdings Ltd) — high confidence, target: Q1 2024 earnings report
• Tantech Holdings Ltd will continue to divest non-core or inactive assets to further streamline operations. (Tantech Holdings Ltd) — medium confidence, target: Next 12-24 months

FAQ

Key Financial Figures

• $0.7 million — buyer for RMB 5,000,000 (approximately $0.7 million). The purpose of the sale of Jikang is

Filing Documents

• tanh_6k.htm (6-K) — 13KB
• tanh_ex991.htm (EX-99.1) — 27KB
• 0001477932-24-000012.txt ( ) — 41KB

From the Filing

tanh_6k.htm UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of January 2024 Commission File Number: 001-36885 TANTECH HOLDINGS LTD (Translation of registrant's name into English) c/o Zhejiang Forest Bamboo Technology Co., Ltd. No. 10 Cen Shan Road, Shuige Industrial Zone Lishui City, Zhejiang Province 323000 +86-578-226-2305 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F Form 40-F Explanatory Note: On December 29, 2023, Lishui Xincai Industrial Co., Ltd. ("Xincai"), a wholly owned subsidiary of Tantech Holdings Ltd, a British Virgin Islands company (the "Company"), entered into a share transfer agreement with Lishui Chida Logistics Co., Ltd, an unrelated third party. Pursuant to the agreement, Xincai agreed to sell all of the shares of its wholly owned subsidiary, Lishui Jikang Energy Technology Co., Ltd. ("Jikang"), to the buyer for RMB 5,000,000 (approximately $0.7 million). The purpose of the sale of Jikang is to reduce the Company's costs associated with maintaining Jikang and its wholly owned subsidiary, which do not currently engage in business operations. The buyer would pay 60% of the purchase price, or RMB 3,000,000, within 15 days after the execution of the agreement and pay the remaining 40%, or RMB 2,000,000, within 15 business days after the completion of the share transfer registration with the local regulatory authority. Pursuant to the agreement, all of the assets and liabilities of Jikang, including all of the equity Jikang owns in its wholly owned subsidiary, Zhejiang Tantech Bamboo Technology Co., Ltd ("Tantech Bamboo"), and all the assets (except for the right to a patent) of Tantech Bamboo, would be transferred to the buyer. The parties agreed that the patent owned by Tantech Bamboo would be transferred to Zhejiang Tantech Bamboo Charcoal Co., Ltd. ("Tantech Charcoal"), a wholly owned subsidiary of Xincai. In addition, Tantech Bamboo would continue to provide a third party guarantee for a mortgage loan of Tantech Charcoal. The foregoing descriptions of the share transfer agreement are summaries of certain material terms of the agreement, do not purport to be complete and are qualified in their entirety by reference to the agreement, which is attached hereto as Exhibits 99.1. Exhibit Index Exhibit Number Description of Exhibit 99.1 Share Transfer Agreement, dated December 29, 2023, by and between Lishui Xincai Industrial Co., Ltd. and Lishui Chida Logistics Co., Ltd. 2 SIGNATURE 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. Tantech Holdings Ltd Date: January 2, 2024 By: /s/ Wangfeng Yan Wangfeng Yan Chief Executive Officer 3

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View this 6-K filing on SEC EDGAR