IT TECH PACKAGING, I

ANNUAL REPORT 2020

Dear Shareholders,

I'd like to take this opportunity to provide you with an update on key achievements of IT Tech Packaging Inc. in 2020, as well as provide an update for 2021 to date. We made a successful turnaround in 2020. We also started off the year 2021 with remarkable improvement of revenues, profits and growth of sales volume.

Total sales volume of CMP, offset printing paper and tissue paper products during the period decreased slightly by 9.12% to 227,331 tonnes. The Company also sold over 10 million pieces of face masks during fiscal year 2020, effectively diversifying our sources of revenues. We officially obtained FDA approval for surgical mask products in May, 2021.

We took a quick recovery from the impact caused by the 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, respectively.

Looking ahead, as a leading papermaking enterprise situated in Hebei Province which surrounds Beijing-Tianjin, the largest metropolitan area in North China, we have a large market for our products and easy access to lower costs of raw materials and logistics. Thus we will continue take such advantages to improve our capabilities to deliver sustainable growth and create long-term value to our shareholders. We are also expanding the business to high and new technology business such as combined heat and power generation project utilizing bio mass technology project ("Biomass CHP Project") and expect to diversify our sources of revenue and ensure our stable modes of profit-making.

Performance

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 CMP, offset printing paper and a decrease in ASPs over all paper products categories. 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. 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. The Company had cash and bank balances of $4.14 million at the end of 2020, compared to $5.84 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.

In the first half of 2021, total revenue increased by $35.64 million, or 101.5%, to $70.74 million from $35.11 million for the same period of last year. The increase in total revenue was mainly due to the increase in sales volume of CMP and offset printing paper and average selling prices of CMP and tissue paper products. Our new surgical mask production line has now completed all preparation and testing works and is expected to have an annual estimated production capacity of 45 million pieces of masks, potentially creating promising financial returns. The Company also obtained the first batch of new utility patents to keep its great work on technology innovation in the future during the first half of 2021.

Key Progresses and Initiatives

We are making progress with our strategic plans, focusing on several initiatives, including: 1) expanding the business to high and new technology business such as combined heat and power generation project utilizing bio mass technology project ("Biomass CHP Project"); 2) seeking sustained partnership with world-leading raw material suppliers to enhance competitiveness of paper products over prices and qualities; and 3) seeking ways to maximize the use of existing resources through penetrating into healthcare sectors with the launch of our production line of non-medicalsingle-use face masks and 4) improving our balance sheet and being properly capitalized to achieve our growth objectives is crucial to our future success. As previously disclosed, the Company's tissue paper research and development center has received a Level B scale-above Certification as an industrial R&D enterprise institution in Hebei province after on-site inspection by governmental regulators. This signals our achievements in technology innovation that is protected and recognized as intellectual properties. Such recognition will provide new motivation for ITP to keep its great work on technology innovation in the future.

Finally, I would like to thank you for your trust and support of ITP and reiterate our commitment to you, our shareholders. We will remain focused on operating the business and delivering outstanding results for our shareholders and we are committed to upholding the highest standards throughout our business and operations. We plan to continue updating you on the trends we observe and the progress of our business as appropriate. We believe we will emerge well positioned to grow and capture the large opportunity in China's high-growth paper markets in which our company operates.

Sincerely,

Mr. Zhenyong Liu

Chairman and Chief Executive Officer

IT Tech Packaging, Inc.

September, 2021

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(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, 2020

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)

Science Park, Juli Road,

Xushui District, Baoding City

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  xNo 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  xNo

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. xYes  ¨No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.¨

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 ☒ No

The aggregate market value of the voting and non-voting common stock of the registrant held by non-affiliates as of June 30, 2020 was approximately $14,089,570 based upon 23,097,655 shares of common stock held by non-affiliates and the closing price of the common stock of $0.61 on June 30, 2020.

As of March 23, 2021, there were 99,045,900 shares of the registrant's common stock, par value $0.001, outstanding. DOCUMENTS INCORPORATED BY REFERENCE: None.

This is an excerpt of the original content. To continue reading it, access the original document here.