# EDGAR Filing Document

**Accession Number:** 0001358190
**File Stem:** 0001213900-23-022568
**Filing Date:** 2023-3
**Character Count:** 35450
**Document Hash:** e993e271c5a75492ed85aef805993c09
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-23-022568.hdr.sgml**: 20230324

**ACCESSION NUMBER**: 0001213900-23-022568

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230324

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230324

**DATE AS OF CHANGE**: 20230324

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** IT TECH PACKAGING, INC.
- **CENTRAL INDEX KEY:** 0001358190
- **STANDARD INDUSTRIAL CLASSIFICATION:** CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670]
- **IRS NUMBER:** 204158835
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-34577
- **FILM NUMBER:** 23757580

**BUSINESS ADDRESS:**
- **STREET 1:** SCIENCE PARK, JULI ROAD
- **STREET 2:** XUSHUI COUNTY, BAODING CITY
- **CITY:** HEBEI PROVINCE,
- **STATE:** F4
- **ZIP:** 072550
- **BUSINESS PHONE:** (86) 312-8698215

**MAIL ADDRESS:**
- **STREET 1:** SCIENCE PARK, JULI ROAD
- **STREET 2:** XUSHUI COUNTY, BAODING CITY
- **CITY:** HEBEI PROVINCE,
- **STATE:** F4
- **ZIP:** 072550

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Orient Paper Inc.
- **DATE OF NAME CHANGE:** 20080102

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CARLATERAL, INC.
- **DATE OF NAME CHANGE:** 20060403

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

**FORM 8-K**

**CURRENT REPORT Pursuant to Section 13 or 15(d) of the** 

**Securities Exchange Act of 1934**

Date of report (Date of earliest event reported): March 24, 2023

IT TECH PACKAGING, INC.

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation)

<u>001-34577</u> <u>20-4158835</u> <br> (Commission File Number) (IRS Employer Identification No.)

<u> Science Park, Juli Road Xushui District, Baoding City Hebei Province, People's Republic of China</u> <u>072550</u> <br> (Address of principal executive offices) (Zip Code)

(86) 312-8698215

(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (*see* General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading symbol(s)** | **Name of each exchange on which registered** |
| **Common Stock, par value $0.001 per share** | **ITP** | **NYSE American LLC** |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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. ☐

**Item 2.02** **Results of Operations and Financial Condition.**

On March 24, 2023, IT Tech Packaging, Inc. (the "Company") issued a press release announcing its financial results and operational results for the fourth quarter and fiscal year ended December 31, 2022. A copy of the press release making the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

**Item 9.01** **Financial Statements and Exhibits.**

(d) Exhibits.

The following exhibits are filed herewith:

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 99.1 | [Press Release dated March 24, 2023, announcing financial results and operational results of the Company for the fourth quarter and fiscal year ended December 31, 2022.](ea175701ex99-1_ittechpack.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

**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 hereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
|  | IT TECH PACKAGING, INC. | IT TECH PACKAGING, INC. | IT TECH PACKAGING, INC. |
| Date: March 24, 2023 | By: | /s/ Zhenyong Liu | /s/ Zhenyong Liu |
|  |  | Name: | Zhenyong Liu |
|  |  | Title: | Chief Executive Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

**IT Tech Packaging, Inc. Announces Fourth Quarter and Fiscal Year 2022 Financial Results**

BAODING, China, March 24, 2023 /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, 2022.

Mr. Zhenyong Liu, Chairman and Chief Executive Officer of the Company, commented, "In fiscal year 2022, our business execution was reflected as we generated approximately $100.35 million in revenue and approximately $4.75 million in gross profit. With the domestic business and markets resumption in an orderly manner as the pandemic is gradually under control in China, we expect that the market demand for our products will recover gradually. "

**Fourth Quarter 2022 Financial Results**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended December 31,** | **For the Three Months Ended December 31,** | **For the Three Months Ended December 31,** |  |
| *($ millions)* | **2021** | **2022** | **% Change** |  |
| Revenues | 45.05 | 21.37 | -52.6 | % |
| &nbsp;&nbsp;&nbsp;Regular Corrugating Medium Paper ("CMP")\* | 32.66 | 17.28 | 47.1 | % |
| &nbsp;&nbsp;&nbsp;Light-Weight CMP\*\* | 7.00 | 3.77 | 46.1 | % |
| &nbsp;&nbsp;&nbsp;Offset Printing Paper | 2.97 |  | -100 | % |
| &nbsp;&nbsp;&nbsp;Tissue Paper Products | 2.28 | 0.25 | -88.9 | % |
| &nbsp;&nbsp;&nbsp;Face Masks | 0.15 | 0.06 | -60.7 | % |
| Gross profit | 4.34 | 1.03 | -76.3 | % |
| Gross profit (loss) margin | 9.6% | 4.8% | -4.8 | pp\*\*\*\* |
| &nbsp;&nbsp;&nbsp;Regular Corrugating Medium Paper ("CMP")\* | 9.6% | 8.3% | -1.3 | pp\*\*\*\* |
| &nbsp;&nbsp;&nbsp;Light-Weight CMP\*\* | 12.2% | 10.3% | -1.9 | pp\*\*\*\* |
| &nbsp;&nbsp;&nbsp;Offset Printing Paper | 21.5% |  |  |  |
| &nbsp;&nbsp;&nbsp;Tissue Paper Products\*\*\* | -13.9% | -315.2% | -301.3 | pp\*\*\*\* |
| &nbsp;&nbsp;&nbsp;Face Masks | 25.2% | 27.5% | 2.3 | pp\*\*\*\* |
| Operating income (loss) | 1.95 | -0.49 | -125.2 | % |
| Net income (loss) | 4.16 | -11.91 | -386.6 | % |
| EBITDA | 8.66 | 3.77 | -56.5 | % |
| Basic and Diluted earnings (loss) per share | 0.45 | -1.19 | -364.4 | % |

---

*\** *Products from PM6*

*\*\** *Products from PM1*

*\*\*\** *Products from PM8 and PM9*

---

| | |
|:---|:---|
| *\*\*\*\** | *pp represents percentage points* |

---

&nbsp;&nbsp;&nbsp;&nbsp;· Revenue decreased by 52.6% to approximately $21.37 million, primarily attributable to an decrease in sales volume of all categories
of products and decrease in ASP of CMP.

&nbsp;&nbsp;&nbsp;&nbsp;· Gross profit decreased by 76.3% to approximately $1.03 million. Total gross margin decreased by 4.8 percentage point to 4.8%.

&nbsp;&nbsp;&nbsp;&nbsp;· Loss from operations was approximately $0.49 million, compared to operation income of approximately $1.95 million for
the same period of last year.

&nbsp;&nbsp;&nbsp;&nbsp;· Net loss was approximately $11.91 million, or loss of $1.19 per basic and diluted share, compared to net income of approximately
$4.16 million, or earnings of $0.45 per basic and diluted share, for the same period of last year.

&nbsp;&nbsp;&nbsp;&nbsp;· Earnings before interest, taxes, depreciation and amortization ("EBITDA") decreased by 56.5% to approximately $3.77million.

*Revenue*

For the fourth quarter of 2022, total revenue decreased by approximately $23.7 million, or 52.6%, to approximately $21.4 million from approximately $45.0 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 and the decrease in ASP of CMP and offset printing paper.

The following table summarizes revenue, volume and ASP by product for the fourth quarter of 2022 and 2021, respectively:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended December 31,** | **For the Three Months Ended December 31,** | **For the Three Months Ended December 31,** | **For the Three Months Ended December 31,** | **For the Three Months Ended December 31,** | **For the Three Months Ended December 31,** |
|  | **2021** | **2021** | **2021** | **2022** | **2022** | **2022** |
|  | **Revenue<br> ($'000)** | **Volume<br> (tonne)** | **ASP<br> ($/tonne)** | **Revenue<br> ($'000)** | **Volume<br> (tonne)** | **ASP<br> ($/tonne)** |
| Regular CMP | 32662 | 57410 | 569 | 17281 | 41941 | 412 |
| Light-Weight CMP | 6996 | 12543 | 558 | 3768 | 9365 | 402 |
| Offset Printing Paper | 2967 | 3911 | 759 |  |  |  |
| Tissue Paper Products | 2278 | 2292 | 994 | 253 | 234 | 1083 |
| **Total** | **44903** | **76156** | **590** | **21302** | **51540** | **413** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Revenue ($'000)** | **Volume (thousand pieces)** | **ASP ($/thousand pieces)** | **Revenue ($'000)** | **Volume ($/thousand pieces)** | **ASP ($/thousand pieces)** |
| Face Masks | 146 | 3014 | 49 | 57 | 1330 | 43 |

---

Revenue from CMP, including both regular CMP and light-Weight CMP, decreased by $18.6 million, or 46.9%, to approximately $21.1 million and accounted for 98.5 % of total revenue for the fourth quarter of 2022, compared to approximately $39.7 million, or 88.0% of total revenue, for the same period of last year. The Company sold 51,306 tonnes of CMP at an ASP of $410/tonne in the fourth quarter of 2022, compared to 69,953 tonnes at an ASP of $567/tonne in the same period of last year.

Of the total CMP sales, revenue from regular CMP decreased by approximately $15.4 million, or 47.1%, to approximately $17.3 million, resulting from sales of 41,941 tonnes at an ASP of $412/tonne, during the fourth quarter of 2022, compared to revenue of approximately$32.7 million, resulting from sales of 57,410 tonnes at an ASP of $569/tonne, for the same period of last year. Revenue from light-weight CMP decreased by approximately $3.2 million, or 46.1%, to approximately $3.8 million, resulting from sales of 9,365 tonnes at an ASP of $402/tonne for the fourth quarter of 2022, compared to revenue of approximately $7.0 million, resulting from sales of 12,543 tonnes at an ASP of $558/tonne for the same period of last year.

Revenue from offset printing paper was $nil for the three months ended December 31, 2022, due to COVID-19, offset printing paper was suspended in 2022. Revenue from offset printing paper was approximately $3.0 million for the fourth quarter of 2021, with 3,911 tonnes sold at an ASP of $759/tonne.

Revenue from tissue paper products decreased by $2.0 million, or 88.9%, to approximately $0.3 million, resulting from sales of 234 tonnes at an ASP of $1,083/tonne, for the fourth quarter of 2022, compared to revenue of approximately$2.3million, resulting from sales of 2,292 tonnes at an ASP of $994/tonne for the same period of last year.

Revenue from face masks decreased by $89,508, or 61.2%, to approximately $56,774 for the fourth quarter ended December 31, 2022, from $146,282 for the same period of 2021. The Company sold 1,330 thousand pieces of face masks for the fourth quarter ended December 31, 2022, compared to 3,014 thousand pieces of face masks for the same period of 2021.

*Gross Profit and Gross Margin*

Total cost of sales decreased by $20.3 million, or 49.9%, to approximately $20.4 million for the fourth quarter of 2022 from approximately $40.7 million for the same period of last year. For paper products, overall cost of sales per tonne was $394 for the fourth quarter of 2022, compared to $533 for the same period of last year. The decrease in overall cost of sales was mainly due to the decrease in sales volume of CMP and offset printing paper and decrease of material costs of CMP in the fourth quarter of 2022. Costs of sales per tonne for regular CMP, light-weight CMP, offset printing paper, and tissue paper products were $378, $361, $nil and $4,494, respectively, for the fourth quarter of 2022, compared to $514, $490, $596, and $1,132, respectively, for the same period of last year.

Total gross profit was approximately $1.0 million for the fourth quarter of 2022, compare to the gross profit of approximately$4.3 million for the same period of last year as a result of factors described above. Overall gross margin was 4.8% for the fourth quarter of 2022, compared to 9.6% 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 8.3%, 10.3%, n/a, -315.2% and 27.5%, respectively, for the fourth quarter of 2022, compared to 9.6%, 12.2%, 21.5%, -13.9% and 25.2%, respectively, for the same period of last year.

*Selling, General and Administrative Expenses*

Selling, general and administrative expenses ("SG&A") decreased by $0.9million, or 36.4%, to approximately $1.5 million for the fourth quarter of 2022 from approximately$2.4 million for the same period of last year.

*Income (Loss) from Operations*

Loss from operations was approximately $0.5million for the fourth quarter of 2022, a decrease of $2.4 million, or 125.2%, from income from operations of approximately $2.0 million for the same period of last year. Operating loss margin was -2.3% for the fourth quarter of 2022, compared to operating margin of 4.3% for the same period of last year.

*Net Income (Loss)*

Net loss was approximately $11.9 million, or $1.19 loss per basic and diluted share for the fourth quarter of 2022, representing a decrease of $16.1 million, or 386.6%, from net income of approximately $4.2 million, or $0.45 earnings per basic and diluted share, for the same period of last year.

*EBITDA*

EBITDA was approximately $3.8 million for the fourth quarter of 2022, compared to approximately $8.7 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.

**Reconciliation of Net Income to EBITDA**

**(Amounts expressed in US$)**

---

| | | |
|:---|:---|:---|
| | **For the Three Months Ended December 31,** | **For the Three Months Ended December 31,** |
| <br>*($ millions)* | **2021** | **2022** |
| Net income (loss) | 4.16 | -11.91 |
| &nbsp;&nbsp;&nbsp;Add: Income tax | 0.60 | 11.87 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest expense | 0.28 | 0.24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 3.62 | 3.57 |
| EBITDA | **8.66** | **3.77** |

---

**Full Year Ended December 31, 2022 Financial Results**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Twelve Months Ended December 31,** | **For the Twelve Months Ended December 31,** | **For the Twelve Months Ended December 31,** |  |
| *($ millions)* | **2021** | **2022** | **% Change** |  |
| Revenues | 160.88 | 100.35 | -37.62 | % |
| &nbsp;&nbsp;&nbsp;Regular Corrugating Medium Paper ("CMP")\* | 111.08 | 82.30 | -25.91 | % |
| &nbsp;&nbsp;&nbsp;Light-Weight CMP\*\* | 23.43 | 16.43 | -29.89 | % |
| &nbsp;&nbsp;&nbsp;Offset Printing Paper | 17.06 | 0 | -100 | % |
| &nbsp;&nbsp;&nbsp;Tissue Paper Products | 8.77 | 1.36 | -84.53 | % |
| &nbsp;&nbsp;&nbsp;Face Masks | 0.54 | 0.26 | -52.1 | % |
| Gross profit | 11.02 | 4.75 | -56.9 | % |
| Gross profit (loss) margin | 6.9% | 4.7% | -2.2 | pp\*\*\*\* |
| &nbsp;&nbsp;&nbsp;Regular Corrugating Medium Paper ("CMP")\* | 6.3% | 7.4% | 1.1 | pp\*\*\*\* |
| &nbsp;&nbsp;&nbsp;Light-Weight CMP\*\* | 8.7% | 9.4% | 0.7 | pp\*\*\*\* |
| &nbsp;&nbsp;&nbsp;Offset Printing Paper | 18.2% |  |  |  |
| &nbsp;&nbsp;&nbsp;Tissue Paper Products\*\*\* | -14.3% | -216.3% | -202.1 | pp\*\*\*\* |
| &nbsp;&nbsp;&nbsp;Face Masks | 19.2% | 26.1% | 6.9 | pp\*\*\*\* |
| Operating income (loss) | 1.46 | -5.30 | -463.5 | % |
| Net income | 0.91 | -16.57 | -1930.0 | % |
| EBITDA | 22.94 | 10.96 | -52.2 | % |
| Basic and Diluted earnings (loss) per share | 0.10 | -1.66 | -1760.0 | % |

---

*\** *Products from PM6*

*\*\** *Products from PM1*

*\*\*\** *Products from PM8 and PM9*

---

| | |
|:---|:---|
| *\*\*\*\** | *pp represents percentage points* |

---

*Revenue*

For the year ended December 31, 2022, total revenue decreased by $60.5 million, or 37.6%, to approximately $100.4 million from approximately$160.9 million for 2021. The decrease in total revenue was mainly due to the decrease in sales volume of CMP, offset printing paper and tissue paper and the decrease in ASP of CMP.

The following table summarizes revenue, volume and ASP by product for the years ended December 31, 2021 and 2022, respectively:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Twelve Months Ended December 31,** | **For the Twelve Months Ended December 31,** | **For the Twelve Months Ended December 31,** | **For the Twelve Months Ended December 31,** | **For the Twelve Months Ended December 31,** | **For the Twelve Months Ended December 31,** |
|  | **2021** | **2021** | **2021** | **2022** | **2022** | **2022** |
|  | **Revenue<br> ($'000)** | **Volume<br> (tonne)** | **ASP<br> ($/tonne)** | **Revenue<br> ($'000)** | **Volume<br> (tonne)** | **ASP<br> ($/tonne)** |
| Regular CMP | 111079 | 213490 | 520 | 82297 | 180977 | 455 |
| Light-Weight CMP | 23432 | 46201 | 507 | 16428 | 37354 | 440 |
| Offset Printing Paper | 17063 | 24513 | 696 |  |  |  |
| Tissue Paper Products | 8770 | 8255 | 1062 | 1356 | 1273 | 1065 |
| **Total** | **160344** | **292459** | **548** | **100082** | **219604** | **456** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Revenue ($'000)** | **Volume (thousand pieces)** | **ASP ($/thousand pieces)** | **Revenue ($'000)** | **Volume ($/thousand pieces)** | **ASP ($/thousand pieces)** |
| Face Masks | 538 | 12664 | 42 | 258 | 5625 | 46 |

---

Revenue from CMP, including both regular CMP and light-Weight CMP decreased by $35.8 million, or 26.6%, to approximately $98.7 million, and accounted for 98.4% of total revenue for the year ended December 31, 2022, compared to approximately$134.5 million, or 83.6% of total revenue for 2021. The Company sold 218,331tonnes of CMP at an ASP of $452/tonne in the year ended December 31, 2022, compared to 259,691tonnes at an ASP of $518/tonne in 2021.

Of the total CMP sales, revenue from regular CMP decreased by $28.8 million, or 25.9%, to approximately $82.3 million, resulting from sales of 180,977 tonnes at an ASP of $455/tonne during the year ended December 31, 2022, compared to revenue of approximately$111.1 million, resulting from sales of 213,490 tonnes at an ASP of $520/tonne for 2021. Revenue from light-weight CMP decreased by $7.0 million, or 29.9%, to approximately$16.4 million, resulting from sales of 37,354 tonnes at an ASP of $440/tonne for the year ended December 31, 2022, compared to revenue of approximately$23.4million, resulting from sales of 46,201tonnes at an ASP of $507/tonne for 2021.

Revenue from offset printing paper was $nil for the year ended December 31, 2022 compared to the revenue of $17.1 for the year ended December 31, 2021. Due to COVID-19, our paper production was restricted and production of offset printing paper was suspended in 2022.

Revenue from tissue paper products decreased by $7.4 million, or 84.5%, to approximately $1.4 million, resulting from sales of 1,273 tonnes at an ASP of $1,065/tonne, for the year ended December 31, 2022, compared to revenue of approximately $8.8 million, resulting from sales of 8,255 tonnes at an ASP of $1,062/tonne for 2021.

Revenue from face masks decreased by $0.3 million, or 52.1%, to approximately $0.3 million for the year ended December 31, 2022, from approximately $0.5 million for 2021. The Company sold 5,625 thousand pieces of face masks for the year ended December 31, 2022, compared to 12,664 thousand pieces of face masks for 2021.

*Gross Profit and Gross Margin*

Total cost of sales decreased by $54.2 million, or 36.1%, to approximately $95.6 million for the year ended December 31, 2022 from approximately $149.9 million for 2021. The decrease in overall cost of sales was mainly due to the decreased sales volume of CMP and offset printing paper and decreased material costs of CMP in the year ended December 31, 2022. Costs of sales per tonne for regular CMP, light-weight CMP, offset printing paper, tissue paper products were, $421, $398, $nil, and $3,370, respectively, for the year ended December 31, 2022 compared to $487, $463, $570, and $1,214, respectively, for 2021.

Total gross profit decreased by $6.3 million, or 56.9%, to approximately $4.8 million for the year ended December 31, 2022 from approximately $11.0 million for 2021. Overall gross margin decreased by 2.2 percentage points to 4.7% for the year ended December 31, 2022 from 6.9% for 2021. Gross margins for regular CMP, light-weight CMP, offset printing paper, tissue paper products and face mask products were 7.4%, 9.4%, nil, -216.3% and 26.1%, respectively, for the year ended December 31, 2022, compared to 6.3%, 8.7%, 18.2%, 14.3% and 19.2%, respectively, for 2021.

*Selling, General and Administrative Expenses*

SG&A expenses increased by $0.5 million, or 5.24%, to approximately $10.1 million for the year ended December 31, 2022 from approximately $9.6 million for 2021. As a percentage of total revenue, SG&A expenses was 10.0% for the year ended December 31, 2022, compared to 5.9% for 2021.

*Income (Loss) from Operations*

Loss from operations decreased by $6.8 million, or 463.5% to approximately $5.3 million for the year ended December 31, 2022 from income from operations of approximately $1.5 million for 2021. Operating loss margin was -5.3% for the year ended December 31, 2022, compared to operating margin of 0.9% for 2021.

*Net Income (Loss)*

 

Net loss decreased by $17.5 million, or 1930.0%, to approximately $16.6 million, or losses per basic and diluted share of $1.66, for the year ended December 31, 2022, compared to net income of approximately $0.9 million, or earnings per basic and diluted share of $0.10 for 2021.

*EBITDA*

 

EBITDA decreased by $12.0 million, or 52.2%, to approximately $11.0 million for the year ended December 31, 2022 from approximately $22.9 million for 2021.

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.

**Reconciliation of Net Income to EBITDA**

**(Amounts expressed in US$)**

---

| | | |
|:---|:---|:---|
| | **For the Twelve Months Ended December 31,** | **For the Twelve Months Ended December 31,** |
| <br>*($ millions)* | **2021** | **2022** |
| Net income (loss) | 0.91 | -16.57 |
| &nbsp;&nbsp;&nbsp; Add: Income tax | 5.55 | 11.71 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest expense | 1.12 | 1.03 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 15.36 | 14.79 |
| EBITDA | **22.94** | **10.96** |

---

**Cash, Liquidity and Financial Position**

As of December 31, 2022, 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 approximately $9.5 million, $11.2 million and $4.2 million, respectively, compared to approximately $11.2 million, $13.5 million and $3.0 million, respectively, at the end of 2021.

Net accounts receivable was approximately $0.9 million as of December 31, 2022, compared to approximately $4.9 million as of December 31, 2021. Net inventory was approximately $2.9 million as of December 31, 2022, compared to approximately $5.8 million at the end of 2021. As of December 31, 2022, the Company had current assets of approximately $47.2 million and current liabilities of approximately $17.6 million, resulting in a working capital of approximately $29.6 million. This was compared to current assets of approximately $55.5 million and current liabilities of approximately $20.4 million, resulting in a working capital of approximately $35.1 million at the end of 2021.

Net Cash provided by operating activities was approximately $10.7 million for the year ended December 31, 2022, compared to net cash used in operating activities of approximately $2.4 million for 2021. Net cash used in investing activities was approximately $10.9 million for the year ended December 31, 2022, compared to approximately $25.1 million for 2021. Net cash used in financing activities was approximately $0.9 million for the year ended December 31, 2022, compared to net cash provided by financing activities of approximately $34.2 million for 2021.

**About IT Tech Packaging, Inc.**

Founded in 1996, IT Tech Packaging, Inc. is a leading manufacturer and distributor of diversified paper products and single-use face masks 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: https://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<br> Email: ir@itpackaging.cn

Tel: +86 0312 8698215

**IT TECH PACKAGING, INC.**

 **CONSOLIDATED BALANCE SHEETS**

 **AS OF DECEMBER 31, 2022 AND 2021**

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| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2022** | **December 31,**<br>**2021** |
| **ASSETS** |  |  |
| Current Assets |  |  |
| Cash and bank balances | $9524868 | $11201612 |
| Accounts receivable (net of allowance for doubtful accounts of $881,878 and $69,053 as of December 31, 2022 and December 31, 2021, respectively) |  | 4868934 |
| Inventories | 2872622 | 5844895 |
| Prepayments and other current assets | 27207127 | 25796640 |
| Due from related parties | 7561858 | 7804068 |
| **Total current assets** | 47166475 | 55516149 |
| Prepayment on property, plant and equipment | 1031502 | 43446210 |
| Operating lease right-of-use assets, net | 672722 |  |
| Finance lease right-of-use assets, net | 1939970 | 2286459 |
| Property, plant, and equipment, net | 151569898 | 126587428 |
| Value-added tax recoverable | 2066666 | 2430277 |
| Deferred tax asset non-current | - | 11268679 |
| **Total Assets** | $204447233 | $241535202 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current Liabilities |  |  |
| Short-term bank loans | $5598311 | $5958561 |
| Current portion of long-term loans | 4835884 | 6838465 |
| Lease liability | 224497 | 210161 |
| Accounts payable | 5025 | 10255 |
| Advance from customers |  | 39694 |
| Due to related parties | 727462 | 727433 |
| Accrued payroll and employee benefits | 165986 | 291206 |
| Other payables and accrued liabilities | 5665558 | 5250539 |
| Income taxes payable | 417906 | 1108038 |
| **Total current liabilities** | 17640629 | 20434352 |
| Long-term loans | 4204118 | 2980065 |
| Deferred gain on sale-leaseback | 52314 | 155110 |
| Lease liability - non-current | 579997 | 152233 |
| Derivative liability | 646283 | 2063534 |
| Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $16,784,878 and $17,924,475 as of December 31, 2022 and 2021, respectively) | 23123341 | 25785294 |
| **Commitments and Contingencies** |  |  |
| **Stockholders' Equity** |  |  |
| Common stock, 50,000,000 shares authorized, $0.001 par value per share, 10,065,920 and 9,915,920 shares issued and outstanding as of December 31, 2022 and December, 31, 2021, respectively. | 10066 | 9916 |
| Additional paid-in capital | 89172771 | 89016921 |
| Statutory earnings reserve | 6080574 | 6080574 |
| Accumulated other comprehensive (loss) income | (7514540) | 10496168 |
| Retained earnings | 93575021 | 110146329 |
| **Total stockholders' equity** | 181323892 | 215749908 |
| **Total Liabilities and Stockholders' Equity** | $204447233 | $241535202 |

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**IT TECH PACKAGING, INC.**

 **CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)**

 **FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

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| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Revenues | $100352434 | $160881720 |
| Cost of sales | (95598238) | (149864161) |
| **Gross Profit** | 4754196 | 11017559 |
| Selling, general and administrative expenses | (10058723) | (9558190) |
| **(Loss) Income from Operations** | (5304527) | 1459369 |
| **Other Income (Expense):** |  |  |
| Interest income | 24264 | 38766 |
| Subsidy income |  | 198530 |
| Interest expense | (1027951) | (1124702) |
| Gain on acquisition | 30994 |  |
| Gain (Loss) on derivative liability | 1417251 | 5880526 |
| **(Loss) Income before Income Taxes** | (4859969) | 6452489 |
| **Provision for Income Taxes** | (11711339) | (5546954) |
| **Net (Loss) Income** | (16571308) | 905535 |
| **Other Comprehensive (Loss) Income** |  |  |
| Foreign currency translation adjustment | (18010708) | 4755448 |
| **Total Comprehensive (Loss) Income** | $(34582016) | $5660983 |
| **(Losses) Earnings Per Share:** |  |  |
| **Basic and Diluted (Losses) Earnings per Share** | $(1.66) | $0.10 |
| **Outstanding – Basic and Diluted** | 9972788 | 9133440 |

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**IT TECH PACKAGING, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

 **FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

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| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| **Cash Flows from Operating Activities:** |  |  |
| Net income | $(16571308) | $905535 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| Depreciation and amortization | 14788036 | 15358452 |
| (Gain) Loss on derivative liability | (1417251) | (5880526) |
| Gain on acquisition | (30992) |  |
| (Recovery from) for bad debts | 843779 | 33480 |
| Share-based compensation and expenses | 156000 |  |
| Deferred tax | 10261104 | 2730050 |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivable | 3750196 | (2430495) |
| Prepayments and other current assets | (3976010) | (8350716) |
| Inventories | 2554072 | (4531263) |
| Accounts payable | (4496) | (589371) |
| Advance from customers | (37452) | (44366) |
| Related parties | 444291 | (785097) |
| Accrued payroll and employee benefits | (103683) | 60334 |
| Other payables and accrued liabilities | 677840 | 254966 |
| Income taxes payable | (614738) | 832946 |
| **Net Cash (Used in) Provided by Operating Activities** | 10719388 | (2436071) |
| **Cash Flows from Investing Activities:** |  |  |
| Purchases of property, plant and equipment | (4534092) | (25071372) |
| Proceeds from sale of property, plant and equipment |  |  |
| Acquisition of land | (6364439) | - |
| **Net Cash Used in Investing Activities** | (10898531) | (25071372) |
| **Cash Flows from Financing Activities:** |  |  |
| Proceeds from issuance of shares and warrants, net |  | 41837553 |
| Proceeds from short term bank loans | 6214020 | 5892298 |
| Proceeds from long term loans | 59195 |  |
| Repayment of bank loans | (6071952) | (6512703) |
| Payment of capital lease obligation | (206114) | (185050) |
| Loan to a related party (net) | (874745) | (6838274) |
| **Net Cash Provided by (Used in) Financing Activities** | (879596) | 34193824 |
| **Effect of Exchange Rate Changes on Cash and Cash Equivalents** | (618005) | 372794 |
| **Net (Decrease) Increase in Cash and Cash Equivalents** | (1676744) | 7059175 |
| **Cash, Cash Equivalents - Beginning of Year** | 11201612 | 4142437 |
| **Cash, Cash Equivalents - End of Year** | $9524868 | $11201612 |
| **Supplemental Disclosure of Cash Flow Information:** |  |  |
| Cash paid for interest, net of capitalized interest cost | $320568 | $577194 |
| Cash paid for income taxes | $2049911 | $1970984 |

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