What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-03-23 compared with 2020-03-23 · 406 added, 199 removed, 350 unchanged (63% of the section changed)

37 unchanged sentences

to transfer the control of Dongfang Paper over to Baoding Shengde.

On June 24, 2009,

24, 2009, the Company consummated a number of restructuring transactions pursuant to which it acquired all of the issued and outstanding

15 unchanged sentences

(i) Exclusive Technical Service and Business Consulting

The exclusive technical

service and business consulting agreement, entered into by and between Baoding Shengde and Dongfang Paper, 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.

The agreement is terminable upon

mutual written agreement.

The exclusive

technical service and business consulting agreement, entered into by and between Baoding Shengde and Dongfang Paper, 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.

The agreement is terminable

upon mutual written agreement.

(ii) Call Option Agreement

34 unchanged sentences

Baoding Shengde under the agreement.

The Dongfang Paper shareholders also promise to comply with the laws and regulations

relevant to the pledges under the agreement and to facilitate in good faith the protection of the ability of Baoding Shengde to

exercise its rights under the agreement.

The terms of the share pledge agreement remains in effect until all the obligations

under the other management agreements have been fulfilled, whether or not the terms of the other management agreements have expired.

The Dongfang Paper shareholders also promise to comply with the laws and regulations relevant

to the pledges under the agreement and to facilitate in good faith the protection of the ability of Baoding Shengde to exercise

its rights under the agreement.

The terms of the share pledge agreement remains in effect until all the obligations under the other

management agreements have been fulfilled, whether or not the terms of the other management agreements have expired.

(iv) Proxy Agreement

11 unchanged sentences

shares representing 100% of the issued and outstanding shares of Shengde Holdings Inc.

As a result of this assignment and

the restructuring transactions described above, Shengde Holdings Inc., Baoding Shengde, and Dongfang Paper became directly and

indirectly controlled by the Company, and Dongfang Paper continued to function as the Company’s operating entity.

As a result of this assignment and the restructuring

transactions described above, Shengde Holdings Inc., Baoding Shengde, and Dongfang Paper became directly and indirectly controlled

by the Company, and Dongfang Paper continued to function as the Company’s operating entity.

In addition to controlling

12 unchanged sentences

to 2010 and thereafter, as dividend.

The following diagram

sets forth the current corporate structure of IT Tech Packaging:

The following diagram sets forth the current corporate

structure of IT Tech Packaging:

100% ownership

Controlled by contractual arrangements

Recent Developments

March 2021 Public

1, 2021, the Company offered and sold to the public investors an aggregate of 29,277,866 shares of common stock and

14,638,933 warrants to purchase up to 14,638,933 shares of common stock in a firm commitment underwritten public offering

for gross proceeds of approximately $21.9 million.

The purchase price for each share of common stock and accompanying warrant

sold in the offering was $0.75.

The warrants are exercisable commencing on March 1, 2021 at an exercise price of $0.75 and

will expire on March 1, 2026.

In the event of a stock split, stock dividend, combination, subsequent right offering or

reclassification of the outstanding shares of Common Stock, the exercise price and the number of shares issuable upon

exercise of the warrants shall be proportionately adjusted.

The Company intends to use the net proceeds from the offering for

general corporate and working capital purposes.

January 2021 Public

On January 20, 2021,

the Company offered and sold to certain institutional investors an aggregate of 26,181,818 shares of common stock and 26,181,818

warrants to purchase up to 26,181,818 shares of common stock in a best-efforts public offering for gross proceeds of approximately

$14.4 million.

The purchase price for each share of common stock and the corresponding warrant sold in the offering was $0.55.

The warrants are exercisable commencing on January 20, 2021 at an exercise price of $0.55 and will expire on January 20, 2026.

In the event of a stock split, stock dividend, combination, subsequent right offering or reclassification of the outstanding shares

of Common Stock, the exercise price and the number of shares issuable upon exercise of the warrants shall be proportionately adjusted.

The Company intends to use the net proceeds from the offering for general corporate and working capital purposes.

Cogenerating Project

In November 2020,

we completed inviting bids for the 75 tonne per hour biomass boiler procurement for our biomass cogeneration project.

well-known enterprises in the biomass industry participated in tendering opening bids.

In February 2021, we completed evaluation

on the bidding proposals and announced that Tai Shan Group Co., Ltd., a top manufacturer in the biomass industry in China, has

Installation of the boilers is expected to commence in the near future.

We expect to participate in the bidding process

for urban central heating projects.

Summary of Risk Factors

Investing in our securities

involves significant risks and uncertainties.

You should carefully consider all of the information in this prospectus before making

an investment in our securities.

Below please find a summary of the principal risks we face, organized under relevant headings.

These risks are discussed more fully in the section titled “Risk Factors.”

Risks Related to Our Business

Risks and uncertainties

related to our business include, but are not limited to, the following:

● Our business, financial condition and results of operations

may be materially adversely affected by global health epidemics, including the recent COVID-19 outbreak;

● In order to comply with PRC regulatory requirements,

we operate our businesses through companies with which we have contractual relationships but in which we do not have controlling

● Because we rely on the consulting services agreement

with Dongfang Paper for essentially all of our revenue and cash flows, any difficulty for Dongfang Paper to pay consulting fees

to Baoding Shengde under the consulting agreement may have a material adverse effect on our operations.;

● If the PRC government determines that our agreements

with these companies are not in compliance with applicable regulations, our business in the PRC could be materially adversely

● Our arrangements with Dongfang Paper and its shareholders

may be subject to a transfer pricing adjustment by the PRC tax authorities which could have an adverse effect on our income and

● The exercise of our option to purchase part or all

of the equity interests in Dongfang Paper under the Call Option Agreement might be subject to approval by the PRC government.

Our failure to obtain this approval may impair our ability to substantially control Dongfang Paper and could result in actions

by Dongfang Paper that conflict with our interests;

● We are dependent on certain key personnel and loss

of these key personnel could have a material adverse effect on our business, financial condition and results of operations;

● Our certificates, permits, and licenses related to our paper making operations are subject to

governmental control and renewal and failure to obtain renewal will cause all or part of our operations to be

● Compliance with environmental regulations is expensive,

and noncompliance may result in adverse publicity and potentially significant monetary damages and fines or suspension of our

business operations.

● Our failure to protect our intellectual property rights

may undermine our competitive position, and external infringements of our intellectual property rights may adversely affect our

● We may be subject to intellectual property infringement

claims or other allegations, which may materially and adversely affect our business, financial condition and prospects;

● We may have to bear unanticipated tax liabilities which

may cause serious adverse effects to our financial conditions and business operations.

Risks Related to Doing Business in the PRC

We face risks and uncertainties

related to doing business in China in general, including, but not limited to, the following:

● Changes in the policies of the PRC government could

have a significant impact upon the business we may be able to conduct in the PRC and the profitability of such business;

● The PRC laws and regulations governing our current

business operations are sometimes vague and uncertain.

Any changes in such PRC laws and regulations may harm our business;

● A slowdown, inflation or other adverse developments

in the PRC economy may harm our customers and the demand for our services and products;

● Governmental control of currency conversion may affect

the value of your investment and the fluctuation of the Renminbi may harm your investment;

● Failure to comply with PRC regulations relating to

the establishment of offshore special purpose companies by PRC residents may materially adversely affect us;

● The PRC’s legal and judicial system may not adequately

protect our business and operations and the rights of foreign investors;

● It may be difficult for overseas regulators to conduct

investigation or collect evidence within China;

● The current tensions in international trade and rising

political tensions, particularly between U.S.

and China, may adversely impact our business, financial condition, and results of

Risks Related to Our Corporate Structure

We are also subject

to risks and uncertainties related to our corporate structure, including, but not limited to, the following:

● Our current corporate structure and business operations

may be affected by the newly enacted Foreign Investment Law;

● Any failure by our consolidated VIEs or their shareholders

to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business;

● We may lose the ability to use and enjoy assets held

by our consolidated VIEs that are material to the operation of our business if the entity goes bankrupt or becomes subject to

a dissolution or liquidation proceeding.

General Risks Related to Our Common Stock

In addition to the risks

described above, we are subject to general risks and uncertainties related to our common stock, including, but not limited to,

the following:

● If we fail to comply with Section 404 of the Sarbanes-Oxley Act

of 2002 in a timely manner, our business could be harmed and our stock price could decline;

● Our common stock may be affected by limited trading

volume and may fluctuate significantly;

● If we become directly subject to the scrutiny involving

listed Chinese companies, we may have to expend significant resources to investigate and/or defend the matter, which could

harm our business operations, stock price and reputation.

Impact of COVID-19 on Our Operations

and Financial Performance

Outbreaks of epidemic,

pandemic, or contagious diseases such as COVID-19, could have an adverse effect on our business, financial condition, and results

of operations.

The spread of COVID-19 has resulted in the World Health Organization declaring the outbreak of COVID-19 as

a global pandemic.

Substantially all of our revenues and workforce are concentrated in China.

In response to the intensifying efforts

to contain the spread of COVID-19, the Chinese government took a number of actions, which included extending the Chinese New Year

holiday, quarantining individuals suspected of having COVID-19, asking residents in China to stay at home and to avoid public gathering,

among other things.

During the early part of 2020, COVID-19 caused temporary closure of our CMP production, and as a result,

our revenue of CMP decreased by 49.89 % in the first quarter of 2020.

It is, however, still unclear how the pandemic will evolve

going forward, and we cannot assure you whether the COVID-19 pandemic will again bring about significant negative impact on

our business operations, financial condition and operating results, including but not limited to negative impact to our total revenues.

While we have resumed

business operations, there remain significant uncertainties surrounding the COVID-19 outbreak and its further development

as a global pandemic.

Hence, the extent of the business disruption and the related impact on our financial results and outlook

for 2021 cannot be reasonably estimated at this time.

The extent to which the COVID-19 impacts our results will depend on

future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning

the severity of the coronavirus and the actions taken globally to contain the coronavirus or treat its impact, among others.

insurance coverage may not provide protection for all costs that may arise from all such possible events.

We are still assessing

our business operations and the total impact COVID-19 may have on our results and financial condition, but there can be no

assurance that this analysis will enable us to avoid part or all of any impact from the spread of COVID-19 or its consequences,

including downturns in business sentiment generally.

We engage in production

and distribution of three categories of paper products:

corrugating medium paper, offset printing paper and tissue paper products.

From late January

2018 to mid-March 2018, the Company temporarily suspended its production due to a government-mandated restriction on the supply

of natural gas, which is the energy resource we need for production.

On March 14, 2018, the Company resumed production at its manufacturing

Our principal executive

offices are located at Science Park, Juli Road, Xushui District, Baoding City, Hebei Province, People’s Republic of China.

corrugating medium paper, offset printing paper, tissue paper products

and non-medical face masks.

Our principal executive offices are located at Science

Park, Juli Road, Xushui District, Baoding City, Hebei Province, People’s Republic of China.

Our telephone number is (86) 312-869-8215.

Our website is located at http://www.itpackaging.cn.

Our website is located

at http://www.itpackaging.cn.

Manufacturing Process

4 unchanged sentences

and (2) treating the pulp and molding it into the desired types of paper products.

A brief overview of the pulp and

papermaking process is provided below.

A brief overview of the pulp and papermaking

process is provided below.

The recycled waste

4 unchanged sentences

any impurities or inconsistencies, such as sand, in the pulp.

The pulp is sieved

to remove the excess water and molded into a specific size.

The moisture content is further reduced by applying hydraulic pressure

sieved to remove the excess water and molded into a specific size.

The moisture content is further reduced by applying hydraulic

pressure to the pulp.

The pulp then enters the drying section where it is rolled over by heated cylinders.

8 unchanged sentences

Base Tissue Paper

While we make tissue

paper products, we currently purchase paper pulp from suppliers and use it to manufacture base tissue paper directly.

While we make tissue paper products, we currently purchase

paper pulp from suppliers and use it to manufacture base tissue paper directly.

Corrugating medium paper

5 unchanged sentences

corrugating medium paper comprised approximately 86.61% of our total paper production quantities and roughly 78.42% of our total

Raw materials used in the production of corrugating medium paper include recycled paper board (or Old Corrugating

Cardboard or “OCC,”

Raw materials used in the production of corrugating medium paper include recycled paper board (or Old Corrugating Cardboard

or “OCC,”

as it is commonly referred to in the United States) and certain supplementary agents.

2013, we suspended the operation of our PM1 production line for renovation, which was then used to produce corrugating medium

In May 2014, we launched the commercial production of a renovated PM1 production line.

The renovated PM1 production line

produces light-weight corrugating medium paper with a specification of 40 to 80 grams per square meter (“g/s/m”).

PM1’s light-weight corrugating medium paper products have a wide range of commercial applications.

For example, they can

be used as a construction material for wall and floor insulation or to manufacture moisture-proof packaging materials for the

transportation of books and magazines by the publishing industry.

It can also be used as corrugating medium to make corrugating

cardboard for packaging that requires light-weight boxes.

The manufacturing process of light-weight corrugating medium paper is

similar to that of the regular corrugating medium paper and also uses recycled paper boards as a major source of raw material.

We now have two corrugating medium paper production lines, PM6 and PM1.

We refer to products produced from the PM6 production

line as Regular CMP and products produced from the PM1 production line as Light-Weight CMP.

In January 2013, we

suspended the operation of our PM1 production line for renovation, which was then used to produce corrugating medium paper.

May 2014, we launched the commercial production of a renovated PM1 production line.

The renovated PM1 production line produces

light-weight corrugating medium paper with a specification of 40 to 80 grams per square meter (“g/s/m”).

light-weight corrugating medium paper products have a wide range of commercial applications.

For example, they can be used as a

construction material for wall and floor insulation or to manufacture moisture-proof packaging materials for the transportation

of books and magazines by the publishing industry.

It can also be used as corrugating medium to make corrugating cardboard for

packaging that requires light-weight boxes.

The manufacturing process of light-weight corrugating medium paper is similar to that

of the regular corrugating medium paper and also uses recycled paper boards as a major source of raw material.

We now have two

corrugating medium paper production lines, PM6 and PM1.

We refer to products produced from the PM6 production line as Regular CMP

and products produced from the PM1 production line as Light-Weight CMP.

Offset printing paper

1 unchanged sentence

is used for offset printing in the publishing industry.

Offset printing paper comprised approximately 11.68% of our

total paper production quantities and approximately 17.38% of our total sales revenue for the year ended December 31, 2019.

materials used in making offset printing paper include recycled white scrap paper, fluorescent whitening agent and sizing

We currently have two production lines, PM2 and PM3, for the production of offset printing paper.

Offset printing paper comprised approximately 8.96% of our total paper

production quantities and approximately 12.15% of our total sales revenue for the year ended December 31, 2020.

Raw materials used

in making offset printing paper include recycled white scrap paper, fluorescent whitening agent and sizing agent.

have two production lines, PM2 and PM3, for the production of offset printing paper.

Tissue Paper Products

We began the commercial

production of tissue paper products in Wei County Industry Park in June 2015.

We process base tissue paper purchased from long-term

cooperative third party and produce finished tissue paper products, including toilet paper, boxed and soft-packed tissues, handkerchief

tissues and paper napkins, as well as bathroom and kitchen paper towels that are marketed and sold under the Dongfang Paper brand.

In December 2018 and November 2019, we completed the construction, installation and test of operation of PM8 and PM9, respectively,

and commercially launched tissue paper production of PM8 and PM9 at such time.

Tissue paper products comprised approximately 2.71%

of our total paper production quantities and approximately 5.4% of our total sales revenue for the year ended December 31, 2019.

the commercial production of tissue paper products in Wei County Industry Park in June 2015.

We process base tissue paper

purchased from long-term cooperative third party and produce finished tissue paper products, including toilet paper, boxed

and soft-packed tissues, handkerchief tissues and paper napkins, as well as bathroom and kitchen paper towels that are

marketed and sold under the Dongfang Paper brand.

In December 2018 and November 2019, we completed the construction,

installation and test of operation of PM8 and PM9, respectively, and commercially launched tissue paper production of PM8 and

PM9 at such time.

On May 5, 2020, the Company announced it planned the commercial launch of a new tissue paper production

line PM10 and the Company signed an agreement to purchase paper machine with paper machine supplier.

The Company expected the

new tissue paper production line to be launched after the completion of trial run.

Tissue paper products comprised

approximately 4.43% of our total paper production quantities and approximately 8.34% of our total sales revenue for the year

ended December 31, 2020.

April 29, 2020, we launched a production line of non-medical single-use face masks, following the completion

of raw materials preparation, trial run of the equipment and the sample products inspection.

In January 2021, the Company

announced it has submitted an application for the license for its new single-use surgical masks from local

food and drug administration in Hebei province.

Market for our Products

The PRC Paper Making Industry

According to the 2018

China Paper Industry Annual Report, issued by the China Paper Association, there were approximately 2,700 paper and paper board

manufacturers (down from 3,700 in 2010) in China, with a total output of 104.35 million tonnes, down by 6.24% from 111.30 million

tonnes in 2017.

Total domestic consumption was 104.39 million tonnes in 2018, down by 4.20% from 108.97 million tonnes in 2017.

Compared with 2009,

output in 2018 increased by approximately 20.78% and consumption grew by approximately 21.82%.

The output of paper and paper board

maintained an average growth rate of approximately 2.12% during the ten-year period from 2009 to 2018, while consumption increased

at an average annual rate of 2.22%.

to the 2019 China Paper Industry Annual Report, issued by the China Paper Association, there were approximately 2,700 paper

and paper board manufacturers (down from 3,700 in 2010) in China, with a total output of 107.65 million tonnes, up by 3.16%

from 104.35 million tonnes in 2018.

Total domestic consumption was 107.04 million tonnes in 2019, up by 2.54% from 104.39

million tonnes in 2018.

with 2010, output in 2019 increased by approximately 3.16% and consumption grew by approximately 2.54%.

The output of paper

and paper board maintained an average growth rate of approximately 1.68% during the ten-year period from 2010 to 2019, while

consumption increased at an average annual rate of 1.73%.

The growth is expected to continue.

It is estimated that China currently has the largest paper

and paper board products output and consumption in the world.

It is estimated that China

currently has the largest paper and paper board products output and consumption in the world.

(Data source:

2018 Annual Report of China Paper Manufacturing,

September 2019, China Paper Association)

Annual Report of China’s Paper Industry, September 2019, China Paper Association

Report of China Paper Manufacturing, May 2020, China Paper Association)

2019Annual Report of China’s

Paper Industry, May 2020, China Paper Association

Corrugating medium

paper production in China totaled 21.05 million tonnes in 2018, a 9.85% decrease from 2017.

paper production in China totaled 22.20 million tonnes in 2019, a 5.46% increase from 2018.

Consumption of corrugating medium paper

in China amounted to 22.13 million tonnes in 2018, a decrease of 7.64% as compared to 2017.

Uncoated offset printing

paper production in China totaled 17.50 million tonnes in 2018, a 2.23% decrease from 2017.

Consumption of uncoated offset printing

paper in China amounted to 17.51 million tonnes in 2018, an increase of 0.40% as compared to 2017.

in China amounted to 23.74 million tonnes in 2019, an increase of 7.28% as compared to 2018.

Uncoated offset

printing paper production in China totaled 17.80 million tonnes in 2019, a 1.71% increase from 2018.

Consumption of uncoated offset

printing paper in China amounted to 17.49 million tonnes in 2019, a decrease of 0.11% as compared to 2018.

The paper making industry

9 unchanged sentences

Data Sources:

Annual Report of China’s Paper Industry, September 2019, China Paper Association

We generally sell

our corrugating medium paper to companies making corrugating cardboards and offset printing paper to printing companies.

customer is a packaging company in Tianjin City.

Our total corrugating medium and offset printing paper revenue in 2019 was primarily

derived from customers in Tianjin, Hebei Province and Shandong Province.

For the year ended

December 31, 2019, four major customers who individually accounted for more than 5% of our total sales revenue are as follows:

(USD$, net of applicable VAT)

Total Revenue

Company A (Tianjin)

Company B (Hebei)

Company C (Shandong)

2019 Annual Report of China’s

Paper Industry, May 2020, China Paper Association

generally sell our corrugating medium paper to companies making corrugating cardboards and offset printing paper to printing

Our largest customer is a packaging company in Tianjin City.

Our total corrugating medium and offset printing

paper revenue in 2020 was primarily derived from customers in Tianjin, Hebei Province and Shandong Province.

year ended December 31, 2020, five major customers who individually accounted for more than 5% of our total sales revenue are

(USD$, net of

Company A (Baoding)

Company B (Tianjin)

Company C (Tianjin)

Company D (Hebei)

Company E(Shandong)

Total Major Customers

Nine of our top-ten

customers of 2019 are also in the top-ten customer list in 2018, representing 35% of the 2019 top-ten customer sales.

our top-ten customers of 2020 are also in the top-ten customer list in 2019, representing 78.6% of the 2019 top-ten customer

Target Market

8 unchanged sentences

These production lines include the followings:

Paper Product Produced

Designed Capacity (tonnes/year)

Paper Product

(tonnes/year)

Status as of December 31, 2020

Corrugating Medium Paper

Corrugating Medium

Dongfang Paper

12 unchanged sentences

Baoding Shengde

Suspended in June 2016 due to low market demand

Suspended in June 2016 due to low market

Digital Photo Paper

1 unchanged sentence

Baoding Shengde

Suspended in June 2016 due to low market demand

Corrugating Medium Paper

Suspended in June 2016 due to low market

Corrugating Medium

Baoding Shengde

4 unchanged sentences

Dongfang Paper

Under renovation and preparing for launch by the end of 2020

Under renovation and preparing for launch by the

Dongfang Paper

4 unchanged sentences

In production.

Paper machines under renovation, under construction, or in the planning stage.

Dongfang Paper

In construction

Paper machines under renovation, under construction, or in

the planning stage.

PM6 is funded and owned by Baoding Shengde;

ancillary facilities that support the PM6 operation are built and owned by Dongfang

On December 31, 2009,

we acquired a digital photo paper production line, including two coating lines that are designated as PM4 and PM5 and ancillary

equipment, for a total purchase price of approximately $13.6 million.

ancillary facilities

that support the PM6 operation are built and owned by Dongfang Paper.

31, 2009, we acquired a digital photo paper production line, including two coating lines that are designated as PM4 and PM5 and

ancillary equipment, for a total purchase price of approximately $13.6 million.

We suspended production of photo paper in June

13 unchanged sentences

marketing team and launch the renovated production line as PM7 by the end of 2021.

On November 27, 2012,

we signed a 15-year lease relating to approximately 49.4 acres of land in the Economic Development Zone in Wei County, Hebei Province,

China for the purpose of developing a new tissue paper production plant.

We plan to build two tissue paper production lines, each

with 15,000 tonnes/year capacity, and other packaging facilities and infrastructures on the leased land.

In December 2012, we signed

a contract with an equipment contractor in Shanghai to build PM8, the first of our two tissue paper production lines in Wei County.

In December 2018 and November 2019, we completed the construction,installation and test of operation of PM8 and PM9, respectively

and commercially launched tissue paper productions of PM8 and PM9 at such time.

November 27, 2012, we signed a 15-year lease relating to approximately 49.4 acres of land in the Economic Development Zone in

Wei County, Hebei Province, China for the purpose of developing a new tissue paper production plant.

We planned to build two

tissue paper production lines, each with 15,000 tonnes/year capacity, and other packaging facilities and infrastructures on

the leased land.

In December 2012, we signed a contract with an equipment contractor in Shanghai to build PM8, the first of

our two tissue paper production lines in Wei County.

In December 2018 and November 2019, we completed the construction,

installation and test of operation of PM8 and PM9, respectively and commercially launched tissue paper productions of PM8 and

PM9 at such time.

On May 5, 2020, the Company announced it planned the commercial launch of a new tissue paper production

line PM10 and the Company signed an agreement to purchase paper machine with paper machine supplier.

The Company expected the

new tissue paper production line to be launched after the completion of trial run.

We voluntarily renovated

15 unchanged sentences

from nearby suppliers.

Ongoing inflationary pressures and higher demand for recycled paper could lead to an increase

in our costs of raw materials and production, which we may or may not be able to pass to our customers.

Ongoing inflationary pressures and higher demand for recycled paper could lead to an increase in our costs

of raw materials and production, which we may or may not be able to pass to our customers.

We sign annual raw

materials supplier contracts with our suppliers.

Although we have contracts with our suppliers, these contracts do not

lock-in the purchase price of our raw materials or provide hedge against the fluctuation in the market price of these raw materials.

For the year ended December 31, 2019, we had two large suppliers which accounted for approximately 74% and 12% of our total

purchases, respectively.

For the year ended

December 31, 2019, two major suppliers who individually accounted for more than 5% of our total purchase are as follows:

Purchase Amount

(USD$, net of applicable VAT)

Total Purchase

Although we have contracts with our suppliers, these contracts do not lock-in

the purchase price of our raw materials or provide hedge against the fluctuation in the market price of these raw materials.

the year ended December 31, 2020, we had two large suppliers which accounted for approximately 72% and 12% of our total purchases,

respectively.

For the year ended December 31, 2020, two major suppliers

who individually accounted for more than 5% of our total purchase are as follows:

(USD$, net of

Company A (Baoding)

4 unchanged sentences

Chenming Paper Group Limited, Huatai Group Limited, Nine Dragons Paper (Holdings) Limited and Sun Paper Group

A number of our competitors are public entities with larger capacities, broader customer bases and greater financial

resources than those available to us.

A number of our competitors are public entities with larger capacities, broader customer bases and greater financial resources

than those available to us.

The businesses of our primary competitors are briefly described below:

Chenming Paper Group,

(“Chenming”), based in Shandong Province (located in northeast China), produces primarily newsprint paper and

art paper (high quality, heavy and two-side coated printing paper).

Chenming is believed to be the first company to

have listed on all three stock exchanges in China:

Renminbi A-shares and foreign currency B-shares in Shenzhen, the smaller of

the mainland’s two stock exchanges, and H-shares in Hong Kong.

Chenming has annual production capacity of 8.5 million

tonnes for its coated wood-free paper product and is believed to rank among the top 500 enterprises in China.

Paper Group, Ltd.

(“Chenming”), based in Shandong Province (located in northeast China), produces primarily news

print paper and art paper (high quality, heavy and two-side coated printing paper).

Chenming is believed to be the first

company to have listed on all three stock exchanges in China:

Renminbi A-shares and foreign currency B-shares in Shenzhen,

the smaller of the mainland’s two stock exchanges, and H-shares in Hong Kong.

Chenming has annual production capacity

of 8.5 million tonnes for its coated wood-free paper product and is believed to rank among the top 500 enterprises in

Huatai Group, Ltd.

1 unchanged sentence

produces newsprint, fine paper, special printing paper, coated board and tissue paper.

Huatai is the first Shandong

papermaker to publicly list its stock and has become a famous brand in China.

Its annual paper production is estimated to have

reached 4 million tonnes.

Huatai is the first Shandong papermaker

to publicly list its stock and has become a famous brand in China.

Its annual paper production is estimated to have reached 4 million

Nine Dragons Paper

3 unchanged sentences

producing products such as kraft paper, high strength corrugating medium paper and grey-back duplex board.

Sun Paper Group, Ltd.,

based in Shandong Province, primarily produces card paper, whiteboard paper and art paper.

It also produces alkaline

peroxide mechanical pulp, sourced in part from woodchips harvested by the company’s poplar plantations.

has reported that it has an aggregate annual production capacity of paper and pulp of approximately 5.7 million tonnes and has

been listed on the Shenzhen Stock Exchange since 2006.

Group, Ltd., based in Shandong Province, primarily produces card paper, whiteboard paper and art paper.

It also produces

alkaline peroxide mechanical pulp, sourced in part from wood chips harvested by the company’s poplar plantations.

company has reported that it has an aggregate annual production capacity of paper and pulp of approximately 5.7 million

tonnes and has been listed on the Shenzhen Stock Exchange since 2006.

With the exceptions

5 unchanged sentences

Our Competitive Edge

Regional advantage

(Northern China) .

We believe that Dongfang Paper is one of the leading papermaking enterprises in Hebei Province.

proximity to large urban centers in northern China, Beijing and Tianjin, gives us access to a large market to sell our products.

advantage (Northern China) .

We believe that Dongfang Paper is one of the leading papermaking enterprises in Hebei

Our proximity to large urban centers in northern China, Beijing and Tianjin, gives us access to a large market to

sell our products.

There are other paper

4 unchanged sentences

We believe that we have cost and geographical advantages over these larger

Cost advantage .

some of our out-of-province competitors who must set up interim warehouses and ship products from their production base to such

interim warehouses close to their customer base in Beijing, there is no need for us to set up interim warehouses, because we are

approximately 60 miles (100 kilometers) from Beijing, the cultural center of China and our largest target market.

While we do not

separately pay for transportation cost on raw material purchases, the transportation cost included in the raw material purchase

prices from our recycled paper suppliers is lower than the transportation cost paid by our competitors in the province of Shandong.

We also enjoy lower transportation costs for coal, a major source of energy used in our production process.

Similarly, our customers

pay lower transportation cost to pick up their orders from our finished goods warehouse in Baoding than what they would pay if

they had to pick up goods from locations further away from Beijing.

Tianjin, another large urban center, is also approximately

60 miles from our facilities.

Baoding city itself is also home to numerous printing and packaging companies.

Our geographical

advantage and easy access to low-cost raw materials allow us to implement a more flexible inventory purchase policy, lower our

purchase prices and inventory management expenses and reduce our production cost.

As such, we have lower freight costs and other

associated costs of sales, which enable us to charge lower prices, if necessary, for our products.

Additionally, because we buy

all recycled paper raw materials from Beijing and Tianjin, rather than from the United States or Japan, our purchase lead time

is shorter as compared to manufacturers who rely on imported recycled paper.

Unlike some of our out-of-province competitors who must set up interim warehouses and ship products from their

production base to such interim warehouses close to their customer base in Beijing, there is no need for us to set up interim

warehouses, because we are approximately 60 miles (100 kilometers) from Beijing, the cultural center of China and our largest

target market.

While we do not separately pay for transportation cost on raw material purchases, the transportation cost

included in the raw material purchase prices from our recycled paper suppliers is lower than the transportation cost paid by

our competitors in the province of Shandong.

We also enjoy lower transportation costs for coal, a major source of energy used

in our production process.

Similarly, our customers pay lower transportation cost to pick up their orders from our finished

goods warehouse in Baoding than what they would pay if they had to pick up goods from locations further away from Beijing.

Tianjin, another large urban center, is also approximately 60 miles from our facilities.

Baoding city itself is also home to

numerous printing and packaging companies.

Our geographical advantage and easy access to low-cost raw materials allow us to

implement a more flexible inventory purchase policy, lower our purchase prices and inventory management expenses and reduce

our production cost.

As such, we have lower freight costs and other associated costs of sales, which enable us to charge

lower prices, if necessary, for our products.

Additionally, because we buy all recycled paper raw materials from Beijing and

Tianjin, rather than from the United States or Japan, our purchase lead time is shorter as compared to manufacturers who rely

on imported recycled paper.

Research and Development

Our R&D activities

are carried out by a task force led by a group of senior managers (in charge of product development and quality control) and by

a group of selected engineers and technicians.

The Company charged the time spent on the R&D projects (manufacturing

waste discharge recycling, digital photo paper and tissue paper manufacturing) to R&D expenses.

Our R&D efforts in 2019

has focused on evaluating and developing new products that are in the pipeline for 2019 and included developing and improving the

manufacturing process of Light-Weight CMP and the production and packaging technology of tissue paper.

R&D activities are carried out by a task force led by a group of senior managers (in charge of product development and

quality control) and by a group of selected engineers and technicians.

The Company charged the time spent on the R&D

projects (manufacturing waste discharge recycling, digital photo paper and tissue paper manufacturing) to R&D expenses.

Our R&D efforts in 2020 has focused on evaluating and developing new products that are in the pipeline for 2020 and

included developing and improving the manufacturing process of Light-Weight CMP and the production and packaging technology

of tissue paper.

One of our production

7 unchanged sentences

Intellectual Property

Dongfang Paper has

registered three trademarks with the Trademark Bureau under the State of Administration for Industry & Commerce.

company has registered nine trademarks with the Trademark Bureau under the State of Administration for Industry &

Certificate No.

Fax paper, thermal paper, blueprint paper, sensitized paper, spectrum sensitized paper, blueprint cloth, photographic paper, cyanotype solution, diazo paper

7 unchanged sentences

December 28, 2014 through December 27, 2024

IT Tech Packaging

has registered the internet domain name, http://www.itpackaging.cn.

Xuan Paper (for traditional Chinese painting and calligraphy), Paper, tissue paper, watercolor paper, writing paper, printing publications, ink, painting brush, packaging plastic film, color box,

Baoding Shengde

July 28, 2017 through July 27, 2027

Drying blueprint solution, diazo paper, photographic paper, sensitive paper, blueprint paper, blueprint canvas, spectral photographic plate, heliographic paper

Baoding Shengde

June 14, 2011 through June 13, 2021

Paper table cover, paper pinafore, drawer lining (with flavor or not)

Hebei Tengsheng

November 21, 2016 through November 20, 2026

paper, paper handkerchief, paper napkin, facial paper, grained paper, cardboard, white board, container board, kraft liner,

corrugated medium paper (board)

Hebei Tengsheng

January 7, 2016 through January 6, 2026

Paper, tissue paper, paper handkerchief, paper napkin, facial paper, paper billboard, cleansing tissue, packaging paper or plastic bag (envelop, sachet), carton, paper box

Hebei Tengsheng

July 14, 2017 through July 13, 2027

Coasters, paper table cover, paper costers, cleansing paper

Hebei Tengsheng

February 28, 2016 through February 27, 2026

IT Tech Packaging has registered the internet domain

name, http://www.itpackaging.cn.

Government Regulation

5 unchanged sentences

Environmental Regulation

Our operations and

facilities are subject to environmental laws and regulations stipulated by the national and the local environment protection bureaus

Our operations

and facilities are subject to environmental laws and regulations stipulated by the national and the local environment protection

bureaus in the PRC.

Since the implementation

15 unchanged sentences

added to the waste water, and the waste water is fed into a biogas reactor and filtering pools, producing purified water and depositing

Most of the purified water is recycled to produce corrugating medium paper and the sludge is pumped into a sludge

pool, condensed and dehydrated.

Most of the purified water is recycled to produce corrugating medium paper and the sludge is pumped into a sludge pool,

condensed and dehydrated.

We then use the sludge as a raw material in the manufacture of corrugating medium paper.

5 unchanged sentences

the existing environmental requirements of the PRC.

Human Capital Resources

Employee Profiles

As of December 31,

2019, we have approximately 428 full time employees.

The Company provides private insurance coverage for any workplace accident

2020, we have approximately 333 full time employees, all of whom were based in PRC.

As of December 31, 2020, approximately 24.3%

of our current workforce is female and 75.7% male.

These employees are organized into a labor union under the labor laws of the

PRC and have collective bargain power against us.

We generally maintain good relations with our employees and the labor union.

Total Rewards

Our compensation program

is designed to attract and reward talented individuals who possess the skills necessary to support our business objectives, assist

in the achievement of our strategic goals and create long-term value for our stockholders.

We provide employees with compensation

packages that include base salary and annual incentive bonuses.

We also provide private insurance coverage for any workplace accident

or injury for all the operators of paper milling machinery in the workshops.

These employees are organized into a labor union under

the labor laws of the PRC and have collective bargain power against us.

We generally maintain good relations with our

employees and the labor union.

Health and Safety

The success of our

business is fundamentally connected to the well-being of our people.

Accordingly, we are committed to the health, safety and wellness

of our employees.

We provide our employees and their families with access to a variety of flexible and convenient health and welfare

programs, including benefits that support their physical and mental health by providing tools and resources to help them improve

or maintain their health status;

and that offer choice where possible so they can customize their benefits to meet their needs

and the needs of their families.

In response to the COVID-19 pandemic, we implemented significant operating environment changes

that we determined were in the best interest of our employees, as well as the communities in which we operate, and which comply

with government regulations.

This includes having the vast majority of our employees work from home, while implementing additional

safety measures for employees continuing critical on-site work.

A core tenet of our

talent system is to both develop talent from within and supplement with external hires.

This approach has yielded loyalty and commitment

in our employee base which in turn grows our business, our products, and our customers, while adding new employees and external

ideas supports a continuous improvement mindset and our goals of a diverse and inclusive workforce.

Our human resources team uses

internal and external resources to recruit highly skilled and talented workers in the PRC, and we encourage employee referrals

for open positions.

Available Information

18 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business