What changed in this filing

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Item 1A. Risk Factors

2023-03-24 compared with 2022-03-15 · 1006 added, 779 removed, 429 unchanged (81% of the section changed)

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business, financial condition and results of operations may be materially adversely affected by global health epidemics, including the

COVID-19 outbreak.

COVID-19 pandemic.

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.

The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected the economies and

financial markets worldwide..

Government efforts to contain the spread of the coronavirus including lockdowns of cities, business closures,

restrictions on travel and emergency quarantines, and responses by businesses and individuals to reduce the risk of exposure to infection,

including reduced travel, cancellation of meetings and events, and implementation of work-at-home policies, have caused significant disruptions

to the global economy and normal business operations.

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 corona virus or treat its impact, among others.

Existing 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.

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.

For the year 2022, COVID-19 caused temporary closure of our CMP production and offset printing

paper was suspended for the whole year, and as a result, our revenue of CMP decreased by 26.60% for 2022.

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.

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 2023

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 corona virus or treat its impact, among others.

Existing insurance coverage may not provide

protection for all costs that may arise from all such possible events.

We continue to assess the related risks and impacts that the COVID-19

pandemic might have on our business and financial performance.

Until such time as the COVID-19 pandemic is contained or eradicated and

global business return to more customary levels, our business and financial results might be materially adversely affected.

the basis of scientific assessment of the characteristics of the virus and the pandemic situation, as well as reference to the prevention

practices of other countries, at the end of 2022, the Chinese government refined its COVID-19 prevention and control measures and stopped

conducting nucleic acid testing for all residents.

By the end of 2022, vaccination rate has exceeded 90%.

And normal life is returning.

Under such circumstances, the government has taken positive service measures, including tax incentives, bank loan and financial support,

etc, to support domestic enterprises to overcome difficulties.

The market consolidation will be expedited eventually.

We have been actively

cooperating with the government in implementing corresponding epidemic control measures to fulfill our social responsibility, by early

prevention and control, to ensure the minimize adverse impact of the epidemic.

operating history may not serve as an adequate basis to judge our future prospects and results of operations.

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including our potential failure to:

raise adequate capital

for expansion and operations;

implement our business

model and strategy and adapt and modify them as needed;

increase awareness of our

brand name, protect our reputation and develop customer loyalty;

manage our expanding operations

and service offerings, including the integration of any future acquisitions;

maintain adequate control

of our expenses;

anticipate and adapt to

changing conditions in paper markets in which we operate as well as the impact of any changes in government regulations, mergers

and acquisitions involving our competitors, technological developments and other significant competitive and market dynamics.

adequate capital for expansion and operations;

our business model and strategy and adapt and modify them as needed;

awareness of our brand name, protect our reputation and develop customer loyalty;

our expanding operations and service offerings, including the integration of any future acquisitions;

adequate control of our expenses;

and adapt to changing conditions in paper markets in which we operate as well as the impact

of any changes in government regulations, mergers and acquisitions involving our competitors,

technological developments and other significant competitive and market dynamics.

we are not successful in addressing any or all of these risks, our business may be materially and adversely affected.

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In the event of any future acquisitions,

issue equity securities

which would dilute current stockholders’ percentage ownership;

incur substantial debt;

assume contingent liabilities;

expend significant cash.

equity securities which would dilute current stockholders’ percentage ownership;

substantial debt;

contingent liabilities;

significant cash.

actions could have a material adverse effect on our operating results or the price of our common stock.

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Acquisitions and investment activities also entail numerous risks, including:

difficulties in the assimilation

of acquired operations, technologies and/or products;

unanticipated costs associated

with the acquisition or investment transaction;

the diversion of management’s

attention from other business concerns;

adverse effects on existing

business relationships with suppliers and customers;

risks associated with entering

markets in which Dongfang Paper has no or limited prior experience;

the potential loss of key

employees of acquired organizations;

substantial charges for

the amortization of certain purchased intangible assets, deferred stock compensation or similar items.

● difficulties

in the assimilation of acquired operations, technologies and/or products;

● unanticipated

costs associated with the acquisition or investment transaction;

diversion of management’s attention from other business concerns;

effects on existing business relationships with suppliers and customers;

associated with entering markets in which Dongfang Paper has no or limited prior experience;

potential loss of key employees of acquired organizations;

● substantial

charges for the amortization of certain purchased intangible assets, deferred stock compensation

or similar items.

cannot ensure that we will be able to successfully integrate any businesses, products, technology, or personnel that we might acquire

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are responsible for the indemnification of our officers and directors.

Our Articles of Incorporation

provides for the indemnification and/or exculpation of our directors, officers, employees, agents and other entities which deal with us

to the maximum extent provided, and under the terms provided, by the laws and decisions of the courts of the state of Nevada.

we do maintain professional error and omission insurance for the officers and directors, due to limitations of the insurance coverage

these indemnification provisions could still result in substantial expenditures which we may be unable to recoup through the insurance

and could adversely affect our business and financial conditions.

Zhenyong Liu, our Chairman of the Board and Chief Executive Officer,

Jing Hao, our Chief Financial Officer, Dahong Zhou, our Secretary, and Marco Ku Hon Wai, Wenbing Christopher Wang, Lusha Niu, and Fuzeng

Liu, our directors, are key personnel with rights to indemnification under our Articles of Incorporation.

Articles of Incorporation provides for the indemnification and/or exculpation of our directors, officers, employees, agents and other

entities which deal with us to the maximum extent provided, and under the terms provided, by the laws and decisions of the courts of

the state of Nevada.

Although we do maintain professional error and omission insurance for the officers and directors, due to limitations

of the insurance coverage these indemnification provisions could still result in substantial expenditures which we may be unable to recoup

through the insurance and could adversely affect our business and financial conditions.

Zhenyong Liu, our Chairman of the Board and Chief

Executive Officer, Jing Hao, our Chief Financial Officer, Dahong Zhou, our Secretary, and Marco Ku Hon Wai, Wenbing Christopher Wang,

Lusha Niu, and Fuzeng Liu, our directors, are key personnel with rights to indemnification under our Articles of Incorporation.

are dependent on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial

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These factors include:

the costs of paper products

and development;

the relative speed and

success with which we can obtain and maintain customers, merchants and vendors for our products;

capital expenditure for

marketing and promotional

activities and other costs;

changes in our pricing

policies, suppliers and competitors;

the ability of our suppliers

to provide products in a timely manner to their customers;

changes in operating expenses;

increased competition in

the paper markets;

other general economic

and seasonal factors.

costs of paper products and development;

relative speed and success with which we can obtain and maintain customers, merchants and

vendors for our products;

expenditure for equipment;

and promotional activities and other costs;

in our pricing policies, suppliers and competitors;

ability of our suppliers to provide products in a timely manner to their customers;

in operating expenses;

competition in the paper markets;

general economic and seasonal factors.

face risks related to product liability claims.

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were to substantially change creating a significant increase in the price of natural gas and recycled paper, we may not be able to find

alternative, comparable suppliers or suppliers capable of providing coal to us on terms or in amounts satisfactory to us.

alternative, comparable suppliers or suppliers capable of providing gas to us on terms or in amounts satisfactory to us.

replaced all the coal boilers with natural gas boiler in September 2017, but due to the gas consumption rise significantly, the government

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due to a number of events, including:

maintenance outages;

prolonged power failures;

an equipment failure, including

any malfunction of our waste water treatment facilities;

disruption in the supply

of raw materials, such as wood fiber, energy, or chemicals;

a chemical spill or release;

closure because of environmental-related

explosion of a boiler;

the effect of a drought

or reduced rainfall on our water supply;

disruptions in the transportation

infrastructure, including roads, bridges, railroad tracks, and tunnels;

fires, floods, earthquakes,

hurricanes, epidemic or other catastrophes;

terrorism or threats of

labor difficulties;

other operational problems.

● maintenance

power failures;

equipment failure, including any malfunction of our waste water treatment facilities;

in the supply of raw materials, such as wood fiber, energy, or chemicals;

chemical spill or release;

because of environmental-related concerns;

effect of a drought or reduced rainfall on our water supply;

● disruptions

in the transportation infrastructure, including roads, bridges, railroad tracks, and tunnels;

floods, earthquakes, hurricanes, epidemic or other catastrophes;

or threats of terrorism;

difficulties;

operational problems.

any of the abovementioned events were to occur, we may be unable to meet customer demand, which may adversely affect our sales and net

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On January 24, 2021, the State Council issued Regulations on the Administration of Pollutant Discharge Permits,

which has effected on March 1, 2022.Additionally, such companies were required to obtain and annually renew a Pollution Discharge Permit

which has effected on March 1, 2022.

Additionally, such companies were required to obtain and annually renew a Pollution Discharge Permit

in order to conduct their operations.

The PRC government has the authority to shut down a company’s operations for its failure

to maintain a valid permit.

We renewed our Pollution Discharge Permit in June 2020.

Our latest permit is effective from June 28, 2020

through June 27, 2025.

Pollution discharge Permit for Hebei Tengsheng was effective from August 10, 2021 through August 9, 2026.

An application

to renew will be filed by us with the local environment protection agency before the expiration.

On December 24, 2021, the Standing Committee of the National People’s Congress issued Law

of the People’s Republic of China on the Prevention and Control of Noise Pollution (the “Prevention and Control of Noise

Pollution Law”), which became effective on June 5, 2022.

According to the Prevention and Control of Noise Pollution Law, entities

subject to the pollutant discharge licensing management requirements shall not emit industrial noise without a pollutant discharge permit

and shall prevent and control noise pollution according to the requirements of the pollutant discharge permit.

The noise pollution has

been included in the Pollution Discharge Permit, and we conduct quarterly test on the noise through qualified testing institutions to

comply with the laws, which is required by laws.

PRC government has the authority to shut down a company’s operations for its failure to maintain a valid permit.

We renewed our

Pollution Discharge Permit in June 2020.

Our latest permit is effective from June 28, 2020 through June 27, 2025.

Pollution discharge

Permit for Tengsheng Paper was effective from August 10, 2021 through August 9, 2026.

An application to renew will be filed by us with

the local environment protection agency before the expiration.

failure by us to obtain any certificate, permit, and license necessary for our operations or the failure by us to obtain the renewal

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may materially and adversely affect our business, financial condition and prospects.

Related To Doing Business in the PRC

Risks Related To Doing Business in the PRC

PRC government has significant oversight and discretion over the conduct of a PRC company’s business operations or to exert control

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or other foreign exchange.

Our business may

be subject to a variety of PRC laws and other obligations regarding cyber security and data protection.

CSRC has released the Trial Measures for Administration of Overseas Securities Offerings and Listings by Domestic Companies (the “Trial

While such rules have not yet gone into effect, the Chinese government may exert more oversight and control over offerings

that are conducted overseas and foreign investment in China-based issuers, which could significantly limit or completely hinder our ability

to continue to offer our securities to investors and could cause the value of our securities to significantly decline or become worthless.

February 17, 2023, with the approval of the State Council, the CSRC released the Trial Measures and five supporting guidelines, which

will come into effect on March 31, 2023.

According to the Trial Measures, (1) domestic companies that seek to offer or list securities

overseas, both directly and indirectly, should fulfill the filing procedures and report relevant information to the CSRC;

if a domestic

company fails to complete the filing procedures or conceals any material fact or falsifies any major content in its filing documents,

such domestic company may be subject to administrative penalties by the CSRC,, such as order to rectify, warnings, fines, and its controlling

shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative

penalties, such as warnings and fines;

(2) if the issuer meets both of the following conditions, the overseas offerings and listings

shall be determined as an indirect overseas offerings and listings by a domestic company:

(i) 50% or more of the issuer’s operating

revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent

accounting year is accounted for by domestic enterprises;

(ii) its major operational activities are carried out in China or its

main places of business are located in China, or the senior managers in charge of its business operation and management are mostly Chinese

citizens or domiciled in China;

and (3) where a domestic company seeks to indirectly offer and list securities in an overseas market,

the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer

makes an application for initial public offerings or listings in an overseas market, the issuer shall submit filings with the CSRC within

three business days after such application is submitted;

if the issuer submits the application documents for offerings or listings in

secret or non-public ways overseas, it may submit an explanation at the time of filing, and the application shall be postponed until

the application documents are reported to the CSRC within three business days after the application documents are disclosed overseas.

Trial Measures, when coming into effect on March 31, 2023, may subject us to additional compliance requirements in the future, and we

cannot assure you that we will be able to get the clearance of filing procedures under the Trial Measures on a timely basis, or at all.

Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to continue

to offer our securities, cause significant disruption to our business operations, and severely damage our reputation, which would materially

and adversely affect our consolidated financial condition and results of operations and cause our securities to significantly decline

in value or become worthless.

We believe that we, our PRC Subsidiaries, the consolidated VIE and its subsidiary are not required to fulfill

filing procedures and obtain approvals from the CSRC to continue to offer our securities or operate the business of the consolidated

VIE and its subsidiary.

In addition, to date, none of us, our PRC Subsidiaries, consolidated VIE and its subsidiary have received any

filing or compliance requirements from CSRC for the listing of the Company at NYSE American and all of its overseas offerings.

on our understanding of the current PRC laws, we believe that the CSRC’s approval is not required to be obtained for ITP’s

listing on NYSE American;

however, there are substantial uncertainties regarding the interpretation and application of the M&A Rules,

other PRC Laws and future PRC laws and regulations, and there can be no assurance that any PRC governmental agency will not take a view

that is contrary to or otherwise different from our belief stated herein.

greater oversight by the Cyberspace Administration of China, or the “CAC,” over data security, particularly for companies

seeking to list on a foreign exchange, could adversely impact the business of us, the consolidated VIE and its subsidiary and investing

in our securities.

December 28, 2021, the CAC, together with 12 other governmental departments of the PRC, jointly promulgated the Cybersecurity Review

Measures, which became effective on February 15, 2022.

The Cybersecurity Review Measures provides that, in addition to critical information

infrastructure operators (“CIIOs”) that intend to purchase Internet products and services, data processing operators engaging

in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity

Review Office of the PRC.

According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security

risks that may be brought about by any procurement, data processing, or overseas listing.

The Cybersecurity Review Measures further requires

that CIIOs and data processing operators that possess personal data of at least one million users must apply for a review by the Cybersecurity

Review Office of the PRC before conducting listings in foreign countries.

November 14, 2021, the CAC published the Draft Regulations on the Network Data Security Administration (Draft for Comments) (the “Security

Administration Draft”), which provides that data processing operators engaging in data processing activities that affect or may

affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC.

to the Security Administration Draft, data processing operators who possess personal data of at least one million users or collect data

that affects or may affect national security must be subject to network data security review by the relevant Cyberspace Administration

The deadline for public comments on the Security Administration Draft was December 13, 2021.

Security Assessment Measures for Outbound Data Transfers which was released on May 19, 2022 at the 10th executive meeting of the Cybersecurity

Administration of China in 2022, and implemented on September 1, 2022, stipulates that a data processor shall declare security assessment

for its outbound data transfer to the CAC at the provincial level:

(i) where a data processor provides critical data abroad;

a CIIO or a data processor processing the personal information of more than one million people provides personal information abroad;

(iii) where a data processor has provided personal information of 100,000 people or sensitive personal information of 10,000 people in

total abroad since January 1 of the previous year;

and (iv) other circumstances prescribed by the CAC for which declaration for security

assessment for outbound data transfers is required.

believe none of us, our PRC Subsidiaries, the consolidated VIE or its subsidiaries is a CIIO, and we believe that we, all of our PRC

Subsidiaries, the consolidated VIE and its subsidiary are not required to go through cybersecurity review from the CAC to continue to

offer our securities or operate the business of the consolidated VIE and its subsidiary.

In addition, as of the date of this annual report,

we, our PRC Subsidiaries, consolidated VIE and its subsidiary have not received any notice from any authorities identifying us as a CIIO

or requiring us to go through cybersecurity review or network data security review by the CAC.

We, our PRC Subsidiaries, consolidated

VIE and its subsidiary have not been required to obtain any approvals or permits from CAC.

When the Cybersecurity Review Measures become

effective and if the Security Administration Draft is enacted as proposed, we believe that the operations of the consolidated VIE and

its subsidiary and our listing will not be affected and that we, the consolidated VIE and its subsidiary will not be subject to cybersecurity

review or network data security review by the CAC, given that:

(i) as a company that mainly engages in paper production and distribution,

our PRC Subsidiaries, the consolidated VIE and VIE’s subsidiaries are unlikely to be classified as CIIOs by the PRC regulatory

(ii) we, the consolidated VIE and its subsidiary possess personal data of fewer than one million individual clients in the

business operations as of the date of this annual report and do not anticipate that we, the consolidated VIE and its subsidiary will

be collecting over one million users’ personal information in the near future, which we understand might otherwise subject us,

the consolidated VIE and its subsidiary to the Cybersecurity Review Measures;

and (iii) data processed in the business of the consolidated

VIE and its subsidiary is unlikely to have a bearing on national security and therefore is unlikely to be classified as core or important

data by the authorities.

There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration

Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations,

rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft.

If any such new laws, regulations, rules, or implementation and interpretation come into effect, we will take all reasonable measures

and actions to comply and to minimize the adverse effect of such laws on us.

We cannot guarantee, however, that we, the consolidated

VIE and its subsidiary will not be subject to cybersecurity review and network data security review in the future.

During such reviews,

we, the consolidated VIE and its subsidiary may be required to suspend our operation or experience other disruptions to our operations.

Cybersecurity review and network data security review could also result in negative publicity with respect to our Company and diversion

of our managerial and financial resources, which could materially and adversely affect the business, financial conditions, and results

of operations of us, the consolidated VIE and its subsidiary.

business may be subject to a variety of PRC laws and other obligations regarding cyber security and data protection.

business may be subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private

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Non-compliance could result in penalties or other significant legal liabilities.

Pursuant to the PRC Cyber security Law, which was promulgated by the

Standing Committee of the National People’s Congress on November 7, 2016 and took effect on June 1, 2017, personal information and

important data collected and generated by a critical information infrastructure operator in the course of its operations in China must

be stored in China, and if a critical information infrastructure operator purchases internet products and services that affects or may

affect national security, it should be subject to cyber security review by the Cyberspace Administration of China (“CAC”).

Due to the lack of further interpretations, the exact scope of “critical information infrastructure operator” remains unclear.

to the PRC Cyber security Law, which was promulgated by the Standing Committee of the National People’s Congress on November 7,

2016 and took effect on June 1, 2017, personal information and important data collected and generated by a critical information infrastructure

operator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases

internet products and services that affects or may affect national security, it should be subject to cyber security review by the Cyberspace

Administration of China (“CAC”).

Due to the lack of further interpretations, the exact scope of “critical information

infrastructure operator” remains unclear.

April 13, 2020, twelve Chinese government agencies jointly promulgated the Measures for Cyber security Review (2020 version) (“Old

Measures”), which became effective on June 1, 2020, set forth the cyber security review mechanism for critical information

infrastructure operators, and provided that critical information infrastructure operators (“CIIOs”) who intend to procure

network products and services that affect or may affect national security shall be subject to a cyber security review.

2021, the Standing Committee of the National People’s Congress promulgated the PRC Data Security Law, which took effect in September 2021.

The Data Security Law provides for a security review procedure for the data activities that may affect national security.

the CAC issued the Measures of Cyber security Review (Revised Draft for Comments) on July 10, 2021, which requires operators with personal

information of more than one million users who want to list abroad to file a cyber security review with the CAC.

Furthermore, the

General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the

Opinions on Severe and Lawful Crackdown on Illegal Securities Activities, which was available to the public on July 6, 2021.

These opinions

emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based

These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal

with the risks and incidents facing China-based overseas-listed companies and the demand for cyber security and data privacy protection.

Measures”), which became effective on June 1, 2020, set forth the cyber security review mechanism for critical information infrastructure

operators, and provided that critical information infrastructure operators (“CIIOs”) who intend to procure network products

and services that affect or may affect national security shall be subject to a cyber security review.

On June 10, 2021, the Standing

Committee of the National People’s Congress promulgated the PRC Data Security Law, which took effect in September 2021.

Security Law provides for a security review procedure for the data activities that may affect national security.

Moreover, the CAC issued

the Measures of Cyber security Review (Revised Draft for Comments) on July 10, 2021, which requires operators with personal information

of more than one million users who want to list abroad to file a cyber security review with the CAC.

Furthermore, the General Office

of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe

and Lawful Crackdown on Illegal Securities Activities, which was available to the public on July 6, 2021.

These opinions emphasized the

need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies.

These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the

risks and incidents facing China-based overseas-listed companies and the demand for cyber security and data privacy protection.

Data Security Law also sets forth the data security protection obligations for entities and individuals handling personal data, including

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actions to be completed by companies like us, we face uncertainties as to whether such clearance can be timely obtained, or at all.

January 4, 2022, the CAC issued the revised Measures on Cyberspace Security Review (the “Revised Measures”)that has came into

effect on February 15, 2022, which required that, among others, in addition to “operator of critical information infrastructure,”

January 4, 2022, the CAC issued the revised Measures on Cyberspace Security Review (the “Revised Measures”)that has came

into effect on February 15, 2022, which required that, among others, in addition to “operator of critical information infrastructure,”

any “network platform operator data processor” controlling personal information of no less than one million users which seeks

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We do not believe we are among the “operator

of critical information infrastructure” or “network platform operator data processor” who control over one million personal

information as mentioned above;

of critical information infrastructure” or “network platform operator data processor” who control over one million

personal information as mentioned above;

however, the definition of “network platform operator” is unclear.

The revised draft of the

Measures for Cyber security Review is in the process of being formulated and it is also unclear on how it will be interpreted, amended

and implemented by the relevant PRC governmental authorities.

The Revised Measures also establish a Cyber security Review Office (the

“CRO”), an administrative body within the CAC, to formulate the regulations for cyber security review and to lead the cyber

security review process.

Applicable CIIOs and NP operators are required to submit an application to the CRO, and the CRO will assess whether

a cyber security review is required.

The revised draft

of the Measures for Cyber security Review is in the process of being formulated and it is also unclear on how it will be interpreted,

amended and implemented by the relevant PRC governmental authorities.

The Revised Measures also establish a Cyber security Review Office

(the “CRO”), an administrative body within the CAC, to formulate the regulations for cyber security review and to lead the

cyber security review process.

Applicable CIIOs and NP operators are required to submit an application to the CRO, and the CRO will assess

whether a cyber security review is required.

these laws, opinions and the measures were recently issued, official guidance and interpretation of these remain unclear in several respects

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regulations may harm our business.

The PRC laws and regulations

governing our current business operations are sometimes vague and uncertain.

The PRC’s legal system is a civil law system based

on written statutes, in which system decided legal cases have little value as precedents unlike the common law system prevalent in the

United States.

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including

but not limited to the laws and regulations governing our business, the enforcement and performance of our contractual arrangements with

our VIE, Dongfang Paper, and its shareholders, or the enforcement and performance of our arrangements with customers in the event of the

imposition of statutory liens, death, bankruptcy and criminal proceedings.

The Chinese government has been developing a comprehensive

system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such

as foreign investment, corporate organization and governance, commerce, taxation and trade.

However, because these laws and regulations

are relatively new, and because of the limited volume of published cases and judicial interpretation and their lack of force as precedents,

interpretation and enforcement of these laws and regulations involve significant uncertainties.

New laws and regulations that affect existing

and proposed future businesses may also be applied retroactively.

Our major operating entity, Dongfang Paper, conducts its operations

in China, and as a result, we are required to comply with PRC laws and regulations.

We cannot assure you that our current ownership and

operating structure would not be found in violation of any current or future PRC laws or regulations.

Any of these or similar actions

could significantly disrupt our business operations or restrict us from conducting a substantial portion of our business operations, which

could materially and adversely affect our business, financial condition and results of operations.

We cannot predict what effect the interpretation

of existing or new PRC laws or regulations may have on our business.

If the relevant authorities find that we are in violation of PRC

laws or regulations, they would have broad discretion in dealing with such a violation, including, without limitation:

levying fines;

revoking Dongfang Paper’s

business and other licenses;

requiring that we restructure

our ownership or operations;

requiring that we discontinue

any portion or all of our business.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain.

The PRC’s legal system is

a civil law system based on written statutes, in which system decided legal cases have little value as precedents unlike the common law

system prevalent in the United States.

There are substantial uncertainties regarding the interpretation and application of PRC laws and

regulations, including but not limited to the laws and regulations governing our business, the enforcement and performance of our contractual

arrangements with our VIE, Dongfang Paper, and its shareholders, or the enforcement and performance of our arrangements with customers

in the event of the imposition of statutory liens, death, bankruptcy and criminal proceedings.

The Chinese government has been developing

a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic

matters such as foreign investment, corporate organization and governance, commerce, taxation and trade.

However, because these laws

and regulations are relatively new, and because of the limited volume of published cases and judicial interpretation and their lack of

force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties.

New laws and regulations

that affect existing and proposed future businesses may also be applied retroactively.

Our major operating entity, Dongfang Paper, conducts

its operations in China, and as a result, we are required to comply with PRC laws and regulations.

We cannot assure you that our current

ownership and operating structure would not be found in violation of any current or future PRC laws or regulations.

Any of these or similar

actions could significantly disrupt our business operations or restrict us from conducting a substantial portion of our business operations,

which could materially and adversely affect our business, financial condition and results of operations.

We cannot predict what effect

the interpretation of existing or new PRC laws or regulations may have on our business.

If the relevant authorities find that we are

in violation of PRC laws or regulations, they would have broad discretion in dealing with such a violation, including, without limitation:

Dongfang Paper’s business and other licenses;

that we restructure our ownership or operations;

that we discontinue any portion or all of our business.

the material laws that we are subject to are the Price Law of The People’s Republic of China, Measurement Law of The People’s

18 unchanged sentences

Such an austere policy can lead to a slowing of economic growth.

may rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may

have, and any limitation on the ability of our PRC Subsidiary to make payments to us could have a material and adverse effect on our

PRC Subsidiaries, consolidated VIE and its subsidiary in China are subject to restrictions on making dividends and other payments to

us or any other affiliated company.

are a holding company and may receive dividends paid by our subsidiaries established in China for our cash needs, including the funds

necessary to pay dividends and other cash distributions to our shareholders to the extent we choose to do so, to service any debt we

may incur and to pay our operating expenses.

Baoding Shengde’s income in turn depends on the service and other fees paid by the

consolidated VIE.

In addition, ITP, its subsidiaries, the consolidated VIE and the VIE’s subsidiaries may also transfer cash to

each other as part of the group cash management.

If any of our subsidiaries, the consolidated VIE and VIE’s subsidiaries incurs

debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends or make other payments

Current PRC regulations permit our PRC Subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined

in accordance with Chinese accounting standards and regulations.

In addition, under the applicable requirements of PRC law, our PRC Subsidiaries,

consolidated VIE and its subsidiary incorporated as companies may only distribute dividends after they have made allowances to fund certain

statutory reserves.

These reserves are not distributable as cash dividends.

addition, under the Enterprise Income Tax Law of the PRC, which became effective on January 1, 2008 and its implementation rules, dividends

paid to us by our PRC Subsidiaries are subject to withholding tax.

The withholding tax on dividends may be exempted or reduced by the

PRC State Council.

Currently, the withholding tax rate is 10% unless reduced or exempted by treaty between the PRC and the tax residence

of the holder of the PRC Subsidiaries.

if our PRC Subsidiaries, consolidated VIE and its subsidiary in China incur debt on their own behalf in the future, the instruments governing

the debt may restrict their ability to pay dividends or make other payments to us.

In addition, the PRC tax authorities may require our

PRC Subsidiaries, consolidated VIE and its subsidiary to adjust their taxable income under the contractual arrangements we currently

have in place in a manner that would restrict our subsidiaries’ ability to pay dividends and make other distributions to us.

addition, the PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the

remittance of currency out of China.

If the foreign exchange control system prevents us from obtaining sufficient foreign currencies

to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders.

date, our PRC Subsidiaries have not paid dividends to us out of their accumulated profits.

In the near future, we do not expect to receive

dividends from our PRC subsidiaries because the accumulated profits of the PRC Subsidiaries are expected to be used for their own business

or expansions.

the year ended December 31, 2022, the cash flows occurred between IT Tech Packaging, its subsidiaries and the VIE included (i) funding

through Shengde Holdings Inc.

to Baoding Shengde, with an amount of $6,500,000 as capital contributions;

(ii) Baoding Shengde loans to

Dongfang Paper with total amount of $1,727,644;(iii) Baoding Shengde loans to Tengsheng Paper with total amount of $1,923,845;

funding through Shengde Holdings Inc.

to Qianrong, with an amount of $3,500,000 as capital contributions.

We do not have an established

cash management policy that dictates how funds are transferred between us, our PRC Subsidiaries, consolidated VIE and its subsidiary.

We do not, at this time, intend to distribute earnings or settle amounts owed under the VIE Agreements.

the future, cash proceeds raised from overseas financing activities may be transferred by ITP to our PRC Subsidiaries and other subsidiaries

or the consolidated VIE and its subsidiary via capital contributions or loans, as the case may be.

Amounts owed under the VIE Agreements

may be returned by Baoding Shengde or the consolidated VIE and its subsidiary through repayment of loans or payment of service fees according

to the exclusive technical service and business consulting agreement, subject to satisfaction of applicable government registration and

approval requirements.

To the extent cash in the business is in the PRC, the funds may not be available to fund operations or for other

use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of us, our PRC Subsidiaries,

or the consolidated VIE by the PRC government to transfer cash.

may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may

have, and any limitation on the ability of our PRC Subsidiaries to make payments to us could have a material and adverse effect on our

ability to conduct our business.

2 unchanged sentences

Packaging Inc.

relies principally on dividends and other distributions on equity from our PRC Subsidiary for cash requirements, including

relies principally on dividends and other distributions on equity from our PRC Subsidiaries for cash requirements, including

for services of any debt IT Tech Packaging Inc.

PRC Subsidiary’s ability to distribute dividends is based upon its distributable earnings.

Current PRC regulations permit our PRC

Subsidiary to pay dividends to its shareholders only out of its accumulated profits, if any, determined in accordance with PRC accounting

standards and regulations.

If our PRC Subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may

restrict its ability to pay dividends or make other payments to us.

Any limitation on the ability of our PRC Subsidiary to distribute

dividends or other payments to its shareholders could materially and adversely limit our ability to grow, make investments or acquisitions

that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.

PRC Subsidiaries’ ability to distribute dividends is based upon its distributable earnings.

Current PRC regulations permit our

PRC Subsidiaries to pay dividends to its shareholders only out of its accumulated profits, if any, determined in accordance with PRC

accounting standards and regulations.

If our PRC Subsidiaries incurs debt on its own behalf in the future, the instruments governing

the debt may restrict its ability to pay dividends or make other payments to us.

Any limitation on the ability of our PRC Subsidiaries

to distribute dividends or other payments to its shareholders could materially and adversely limit our ability to grow, make investments

or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.

addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable

7 unchanged sentences

Under our current corporate structure, our Nevada

holding company may rely on dividend payments from our PRC Subsidiary to fund any cash and financing requirements we may have.

holding company may rely on dividend payments from our PRC Subsidiaries to fund any cash and financing requirements we may have.

existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade

2 unchanged sentences

Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated

from the operations of our PRC subsidiary in China may be used to pay dividends to our Nevada holding company.

from the operations of our PRC subsidiaries in China may be used to pay dividends to our Nevada holding company.

approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency

1 unchanged sentence

As a result, we need

to obtain SAFE approval to use cash generated from the operations of our PRC subsidiary and VIE to pay off their respective debt in a

currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency

to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries and VIE to pay off their respective debt in

a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency

other than Renminbi.

7 unchanged sentences

satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders of our common stock.

regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion

may delay us from making loans or additional capital contributions to our PRC Subsidiary, which could materially and adversely affect

our liquidity and our ability to fund and expand our business.

funds IT Tech Packaging Inc.

transfers to its PRC Subsidiary, either as a shareholder loan or as an increase in registered capital, are

subject to approval by or registration with relevant governmental authorities in China.

According to the relevant PRC regulations on

foreign invested enterprises, or FIEs, in China, capital contributions to our PRC Subsidiary are subject to the approval of or report

investment information to the MOFCOM or their respective local branches and registration with a local bank authorized by the SAFE.

addition, any foreign loan procured by our PRC Subsidiary cannot exceed statutory limits and is required to be registered with SAFE or

its local branches.

Any medium or long-term loan to be provided by IT Tech Packaging Inc.

to the VIE must be registered with the National

Development and Reform Commission, or NDRC, and the SAFE or its local branches.

We may not be able to complete such registrations on

a timely basis, with respect to future capital contributions or foreign loans by IT Tech Packaging Inc.

to its PRC Subsidiary.

fail to complete such registrations, our ability to capitalize our PRC operations may be negatively affected, which could adversely affect

our liquidity and our ability to fund and expand business.

March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement

of Foreign-Invested Enterprises, or SAFE Circular 19, which took effect on June 1, 2015.

SAFE Circular 19 launched a nationwide

reform of the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange

capital at their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign exchange capital

for expenditure beyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises.

issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE

Circular 16, effective in June 2016.

Pursuant to SAFE Circular 16, enterprises registered in China may also convert their foreign

debts from foreign currency to Renminbi on a self-discretionary basis.

SAFE Circular 16 provides an integrated standard for conversion

of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary

basis which applies to all enterprises registered in China.

SAFE Circular 16 reiterates the principle that Renminbi converted from foreign

currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited

by PRC laws or regulations, while such converted Renminbi shall not be provided as loans to its non-affiliated entities.

As this circular

is relatively new, there remains uncertainty as to its interpretation and application and any other future foreign exchange related rules.

Violations of these Circulars could result in severe monetary or other penalties.

SAFE Circular 19 and SAFE Circular 16 may significantly

limit our ability to fund the establishment of new entities in China by the VIE, to invest in or acquire any other PRC companies through

our PRC Subsidiary, or to establish new consolidated VIE in China, which may adversely affect our business, financial condition and results

of operations.

October 23, 2019, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience

of Cross-border Trade and Investment, or the SAFE Circular 28, which, among other things, allows all foreign-invested companies to use

Renminbi converted from foreign currency-denominated capital for equity investments in China, as long as the equity investment is genuine,

does not violate applicable laws, and complies with the negative list on foreign investment.

However, since the SAFE Circular 28 is newly

promulgated, it is unclear how SAFE and competent banks will carry this out in practice.

light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies,

we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals

on a timely basis, if at all, with respect to future loans by IT Tech Packaging to its PRC Subsidiary or with respect to future capital

contributions by IT Tech Packaging Inc.

to its PRC Subsidiary.

If we fail to complete such registrations or obtain such approvals, our

ability to to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect

our liquidity and our ability to fund and expand our business.

fluctuation of the Renminbi may harm your investment.

value of the Renminbi against the U.S.

dollar and other currencies may fluctuate and is affected by, among other things, changes in the

PRC’s political and economic conditions.

According to the Bureau of the Fiscal Service, as of December 31, 2021, $1 is converted

into 6.3757Yuan (RMB).

As we rely entirely on revenues earned in the PRC, any significant revaluation of the Renminbi may materially

and adversely affect our cash flows, revenues and financial condition.

PRC regulation of loans to and direct investment

in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from making loans or additional

capital contributions to our PRC Subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand

our business.

Any funds IT Tech Packaging

transfers to its PRC Subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval

by or registration with relevant governmental authorities in China.

According to the relevant PRC regulations on foreign invested enterprises,

or FIEs, in China, capital contributions to our PRC Subsidiaries are subject to the approval of or report investment information to the

MOFCOM or their respective local branches and registration with a local bank authorized by the SAFE.

In addition, any foreign loan procured

by our PRC Subsidiaries cannot exceed statutory limits and is required to be registered with SAFE or its local branches.

Any medium or

long-term loan to be provided by IT Tech Packaging Inc.

to the VIE must be registered with the National Development and Reform Commission,

or NDRC, and the SAFE or its local branches.

We may not be able to complete such registrations on a timely basis, with respect to future

capital contributions or foreign loans by IT Tech Packaging Inc.

to its PRC Subsidiaries.

If we fail to complete such registrations, our

ability to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund

and expand business.

On March 30, 2015, the SAFE

promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises,

or SAFE Circular 19, which took effect on June 1, 2015.

SAFE Circular 19 launched a nationwide reform of the administration of the settlement

of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital at their discretion, but continues to

prohibit FIEs from using the Renminbi fund converted from their foreign exchange capital for expenditure beyond their business scopes,

providing entrusted loans or repaying loans between nonfinancial enterprises.

The SAFE issued the Circular on Reforming and Regulating

Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, effective in June 2016.

SAFE Circular 16, enterprises registered in China may also convert their foreign debts from foreign currency to Renminbi on a self-discretionary

SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but

not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises registered in

SAFE Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated capital of a company may not

be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while such converted Renminbi

shall not be provided as loans to its non-affiliated entities.

As this circular is relatively new, there remains uncertainty as to its

interpretation and application and any other future foreign exchange related rules.

Violations of these Circulars could result in severe

monetary or other penalties.

SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to fund the establishment of new

entities in China by the VIE, to invest in or acquire any other PRC companies through our PRC Subsidiaries, or to establish new consolidated

VIE in China, which may adversely affect our business, financial condition and results of operations.

On October 23, 2019, the

SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade

and Investment, or the SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from

foreign currency-denominated capital for equity investments in China, as long as the equity investment is genuine, does not violate applicable

laws, and complies with the negative list on foreign investment.

However, since the SAFE Circular 28 is newly promulgated, it is unclear

how SAFE and competent banks will carry this out in practice.

In light of the various requirements

imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that

we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if

at all, with respect to future loans by IT Tech Packaging to its PRC Subsidiaries or with respect to future capital contributions by IT

Tech Packaging Inc.

to its PRC Subsidiaries.

If we fail to complete such registrations or obtain such approvals, our ability to to capitalize

or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability

to fund and expand our business.

The fluctuation of the Renminbi may harm your investment.

The value of the Renminbi

against the U.S.

dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political

and economic conditions.

According to the Bureau of the Fiscal Service, as of December 31, 2022, $1 is converted into 6.9646 Yuan (RMB).

As we rely entirely on revenues earned in the PRC, any significant revaluation of the Renminbi may materially and adversely affect our

cash flows, revenues and financial condition.

For example, to the extent that we need to convert U.S.

we receive from an offering of our securities into Renminbi for Dongfang Paper’s operations, appreciation of the Renminbi against

dollar would diminish the value of the proceeds of the offering and this could harm our business, financial condition and results

of operations because it would reduce the proceeds available to us for capital investment in proportion to the appreciation of the Renminbi.

Thus, if we raise 1,000,000 U.S.

dollars we receive from an offering

of our securities into Renminbi for Dongfang Paper’s operations, appreciation of the Renminbi against the U.S.

dollar would diminish

the value of the proceeds of the offering and this could harm our business, financial condition and results of operations because it would

reduce the proceeds available to us for capital investment in proportion to the appreciation of the Renminbi.

Thus, if we raise 1,000,000

dollars and the Renminbi appreciates against the U.S.

dollar by 15%, then the proceeds will be worth

only RMB5,544,087 as opposed to RMB 6,375,700 prior to the appreciation.

dollar by 15%, then the proceeds will be worth only RMB5,919,910 as opposed

to RMB 6,964,600 prior to the appreciation.

Conversely, if we decide to convert our Renminbi into U.S.

for the purpose of making payments for dividends on our common shares or for other business purposes and the U.S.

dollar appreciates

against the Renminbi, the U.S.

dollars for the purpose of making

payments for dividends on our common shares or for other business purposes and the U.S.

dollar appreciates against the Renminbi, the U.S.

dollar equivalent of the Renminbi we convert would be reduced in proportion to the amount the U.S.

In addition, the depreciation of significant RMB denominated assets could result in a charge to our income statement and

a reduction in the dollar value of these assets.

Thus, if Dongfang Paper has RMB1,000,000 in assets and Renminbi is depreciated against

dollar by 15%, then the assets will be valued at $136,387 as opposed to $156,846 prior to the depreciation.

July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S.

the new policy, the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies.

This change in policy resulted in an approximately 2.44% appreciation of the Renminbi against the U.S.

dollar appreciates.

In addition, the

depreciation of significant RMB denominated assets could result in a charge to our income statement and a reduction in the dollar value

of these assets.

Thus, if Dongfang Paper has RMB1,000,000 in assets and Renminbi is depreciated against the U.S.

dollar by 15%, then the

assets will be valued at $124,855 as opposed to $143,583 prior to the depreciation.

On July 21, 2005, the PRC

government changed its decade-old policy of pegging the value of the Renminbi to the U.S.

Under the new policy, the Renminbi is

permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies.

This change in policy resulted

in an approximately 8.20% appreciation of the Renminbi against the U.S.

dollar as of December 31, 2022.

While the international reaction to the Renminbi revaluation has generally been positive, there remains significant international pressure

on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant depreciation

of the Renminbi against the U.S.

to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may materially adversely

PRC State Administration of Foreign Exchange, or SAFE, has promulgated regulations, including the Notice on Relevant Issues Relating

to Domestic Residents’ Investment and Financing and Round-Trip Investment through Special Purpose Vehicles, or SAFE Circular No.

37, effective on July 14, 2014, and its appendixes, that require PRC residents, including PRC institutions and individuals, to register

with local branches of the SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose

of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises

or offshore assets or interests, referred to in SAFE Circular No.

While the international reaction

to the Renminbi revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt

an even more flexible currency policy, which could result in a further and more significant depreciation of the Renminbi against the U.S.

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 State Administration

of Foreign Exchange, or SAFE, has promulgated regulations, including the Notice on Relevant Issues Relating to Domestic Residents’

Investment and Financing and Round-Trip Investment through Special Purpose Vehicles, or SAFE Circular No.

37, effective on July 14, 2014,

and its appendixes, that require PRC residents, including PRC institutions and individuals, to register with local branches of the SAFE

in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing,

with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred

to in SAFE Circular No.

37 as a “special purpose vehicle.” SAFE Circular No.

further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such

as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event.

In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the

PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying

out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in their ability to contribute

additional capital into its PRC subsidiary.

Further, failure to comply with the various SAFE registration requirements described above

could result in liability under PRC law for foreign exchange evasion.

of uncertainty over the interpretation of Circular 37, we cannot assure you that, if challenged by government agencies, the structure

of our organization has fully complied with all applicable registrations or approvals required by Circular 37.

Moreover, because of uncertainty

over how Circular 37 will be interpreted and implemented, and how or whether SAFE will apply it to us, we cannot predict how it will

affect our business operations or future strategies.

A failure by such PRC resident beneficial holders or future PRC resident stockholders

to comply with Circular 37, if SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict

our overseas or cross-border investment activities, limit our subsidiaries’ ability to make distributions or pay dividends or affect

our ownership structure, which could adversely affect our business and prospects.

the approval and/or other requirements of the CSRC or other PRC governmental authorities are currently not required, they may be required,

in connection with our oversea listing under PRC rules, regulations or policies, and, if required, we cannot predict whether or how soon

we will be able to obtain such approval.

August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission (“CSRC”), promulgated the

Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors (“M&A Rules”), which became effective

on September 8, 2006 and then was further amended on June 22, 2009.

This regulation, among other things, has certain provisions that

purport to require offshore SPVs formed for the purpose of listing and controlled by PRC individuals or companies, to obtain the approval

of the CSRC prior to listing their securities on an overseas stock exchange.

On September 21, 2006, the CSRC published on its official

website a notice specifying the documents and materials that are required to be submitted for obtaining CSRC approval.

37 further requires amendment to the registration

in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed

by PRC individuals, share transfer or exchange, merger, division or other material event.

In the event that a PRC shareholder holding

interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle

may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange

activities, and the special purpose vehicle may be restricted in their ability to contribute additional capital into its PRC subsidiaries.

Further, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for

foreign exchange evasion.

Because of uncertainty over

the interpretation of Circular 37, we cannot assure you that, if challenged by government agencies, the structure of our organization

has fully complied with all applicable registrations or approvals required by Circular 37.

Moreover, because of uncertainty over how Circular

37 will be interpreted and implemented, and how or whether SAFE will apply it to us, we cannot predict how it will affect our business

operations or future strategies.

A failure by such PRC resident beneficial holders or future PRC resident stockholders to comply with

Circular 37, if SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas

or cross-border investment activities, limit our subsidiaries’ ability to make distributions or pay dividends or affect our ownership

structure, which could adversely affect our business and prospects.

While the approval and/or other requirements

of the CSRC or other PRC governmental authorities are currently not required, they may be required, in connection with our oversea listing

under PRC rules, regulations or policies, and, if required, we cannot predict whether or how soon we will be able to obtain such approval.

On August 8, 2006, six PRC

regulatory agencies, including the China Securities Regulatory Commission (“CSRC”), promulgated the Regulation on Mergers

and Acquisitions of Domestic Companies by Foreign Investors (“M&A Rules”), which became effective on September 8, 2006

and then was further amended on June 22, 2009.

This regulation, among other things, has certain provisions that purport to require offshore

SPVs formed for the purpose of listing and controlled by PRC individuals or companies, to obtain the approval of the CSRC prior to listing

their securities on an overseas stock exchange.

On September 21, 2006, the CSRC published on its official website a notice specifying

the documents and materials that are required to be submitted for obtaining CSRC approval.

In addition, the PRC government

11 unchanged sentences

recently issued and there remain substantial uncertainties about their interpretation and implementation.

December 24, 2021, CSRC issued Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic

Companies (Draft for Comments) (the “Administration Provisions”), and the Administrative Measures for the Filing of Overseas

Securities Offering and Listing by Domestic Companies (the “Measures”), which are open for public comments by January 23,

The Administration Provisions and Measures for overseas listings lay out specific requirements for filing documents and include

unified regulation management, strengthening regulatory coordination, and cross-border regulatory cooperation.

Domestic companies seeking

to list abroad must carry out relevant security screening procedures if their businesses involve supervisions such as foreign investment

security and cyber security reviews.

On December 24, 2021, CSRC

issued Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft

for Comments) (the “Administration Provisions”), and the Administrative Measures for the Filing of Overseas Securities Offering

and Listing by Domestic Companies (the “Measures”), which are open for public comments by January 23, 2022.

The Administration

Provisions and Measures for overseas listings lay out specific requirements for filing documents and include unified regulation management,

strengthening regulatory coordination, and cross-border regulatory cooperation.

Domestic companies seeking to list abroad must carry out

relevant security screening procedures if their businesses involve supervisions such as foreign investment security and cyber security

Companies endangering national security are among those off-limits for overseas listings.

to Relevant Officials of the CSRC Answered Reporter Questions (“CSRC Answers”), after the Administration Provisions and Measures

are implemented upon completion of public consultation and due legislative procedures, the CSRC will formulate and issue guidance for

filing procedures to further specify the details of filing administration and ensure that market entities could refer to clear guidelines

for filing, which means it will still take time to put the Administration Provisions and Measures into effect.

As the Administration

Provisions and Measures have not yet come into effect, we are currently unaffected by them.

However, according to CSRC Answers, only

new initial public offerings and refinancing by existing overseas listed Chinese companies will be required to go through the filing

other existing overseas listed companies will be allowed a sufficient transition period to complete their filing procedure.

However, it is uncertain when the Administration Provision and the Measures will take effect or if they will take effect as currently

According to Relevant Officials of

the CSRC Answered Reporter Questions (“CSRC Answers”), after the Administration Provisions and Measures are implemented upon

completion of public consultation and due legislative procedures, the CSRC will formulate and issue guidance for filing procedures to

further specify the details of filing administration and ensure that market entities could refer to clear guidelines for filing, which

means it will still take time to put the Administration Provisions and Measures into effect.

As the Administration Provisions and Measures

have not yet come into effect, we are currently unaffected by them.

However, according to CSRC Answers, only new initial public offerings

and refinancing by existing overseas listed Chinese companies will be required to go through the filing process;

other existing overseas

listed companies will be allowed a sufficient transition period to complete their filing procedure.

However, it is uncertain when the

Administration Provision and the Measures will take effect or if they will take effect as currently drafted.

We believe that, as of the

11 unchanged sentences

ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

of the date of this annual report, we have not received any inquiry, notice, warning, sanctions or regulatory objection to our operations

from the CSRC, CAC or any other PRC governmental authorities, and our PRC Subsidiary and the VIE have obtained all requisite permissions

from PRC governmental authorities to operate our business as currently conducted under relevant PRC laws and regulations and no permissions

have been denied by governmental authorities.

M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors,

which could make it more difficult for us to pursue growth through acquisitions in China.

other things, the M&A Rules established additional procedures and requirements that could make merger and acquisition activities

by foreign investors more time consuming and complex.

Such regulation requires, among other things, that the Ministry of Commerce be

notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise or a

foreign company with substantial PRC operations, if certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations

of Undertakings, issued by the State Council in 2008, are triggered.

Moreover, the Anti-Monopoly Law requires that the anti-monopoly

law enforcement authority shall be notified in advance of any concentration of undertaking if certain thresholds are triggered.

the security review rules issued by the State Council that became effective in March 2011 specify that mergers and acquisitions

by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign

investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict

review by the Ministry of Commerce, and the rules prohibit any activities attempting to bypass a security review, including by structuring

the transaction through a proxy or contractual control arrangement.

the future, we may grow our business by acquiring complementary businesses.

Complying with the requirements of the above-mentioned regulations

and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including obtaining

approval from the Ministry of Commerce or its local counterparts may delay or inhibit our ability to complete such transactions, which

could affect our ability to expand our business or maintain our market share.

PRC’s legal and judicial system may not adequately protect our business and operations and the rights of foreign investors.

PRC legal and judicial system may negatively impact foreign investors.

In 1982, the National People’s Congress amended the Constitution

of China to authorize foreign investment and guarantee the “lawful rights and interests” of foreign investors in the PRC.

However, the PRC’s system of laws is not yet comprehensive.

The legal and judicial systems in the PRC are still rudimentary, and

enforcement of existing laws is inconsistent.

Many judges in the PRC lack the depth of legal training and experience that would be expected

of a judge in a more developed country.

Because the PRC judiciary is relatively inexperienced in enforcing the laws that do exist, anticipation

of judicial decision-making is more uncertain than would be expected in a more developed country.

It may be impossible to obtain swift

and equitable enforcement of laws that do exist, or to obtain enforcement of the judgment of one court by a court of another jurisdiction.

The PRC’s legal system is based on the civil law regime, that is, it is based on written statutes;

a decision by one judge does

not set a legal precedent that is required to be followed by judges in other cases.

In addition, the interpretation of Chinese laws may

be varied to reflect domestic political changes.

trend of legislation over the last 20 years has significantly enhanced the protection of foreign investment and allowed for more control

by foreign parties of their investments in Chinese enterprises.

However, the promulgation of new laws, changes to existing laws and the

pre-emption of local regulations by national laws may adversely affect foreign investors.

A change in leadership, social or political

disruption, or unforeseen circumstances affecting the PRC’s political, economic or social life, may affect the PRC government’s

ability to continue to support and pursue these reforms.

As of the date of this annual

report, we have not received any inquiry, notice, warning, sanctions or regulatory objection to our operations from the CSRC, CAC or any

other PRC governmental authorities, and our PRC Subsidiaries and the VIE have obtained all requisite permissions from PRC governmental

authorities to operate our business as currently conducted under relevant PRC laws and regulations and no permissions have been denied

by governmental authorities.

The M&A Rules and certain other

PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more

difficult for us to pursue growth through acquisitions in China.

Among other things, the M&A

Rules established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time

consuming and complex.

Such regulation requires, among other things, that the Ministry of Commerce be notified in advance of any change-of-control

transaction in which a foreign investor takes control of a PRC domestic enterprise or a foreign company with substantial PRC operations,

if certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, issued by the State

Council in 2008, are triggered.

Moreover, the Anti-Monopoly Law requires that the anti-monopoly law enforcement authority shall be notified

in advance of any concentration of undertaking if certain thresholds are triggered.

In addition, the security review rules issued by the

State Council that became effective in March 2011 specify that mergers and acquisitions by foreign investors that raise “national

defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic

enterprises that raise “national security” concerns are subject to strict review by the Ministry of Commerce, and the rules

prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual

control arrangement.

In the future, we may grow

our business by acquiring complementary businesses.

Complying with the requirements of the above-mentioned regulations and other relevant

rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the

Ministry of Commerce or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our

ability to expand our business or maintain our market share.

The PRC’s legal and judicial system may not adequately

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

The PRC legal and judicial

system may negatively impact foreign investors.

In 1982, the National People’s Congress amended the Constitution of China to authorize

foreign investment and guarantee the “lawful rights and interests” of foreign investors in the PRC.

However, the PRC’s

system of laws is not yet comprehensive.

The legal and judicial systems in the PRC are still rudimentary, and enforcement of existing

laws is inconsistent.

Many judges in the PRC lack the depth of legal training and experience that would be expected of a judge in a more

developed country.

Because the PRC judiciary is relatively inexperienced in enforcing the laws that do exist, anticipation of judicial

decision-making is more uncertain than would be expected in a more developed country.

It may be impossible to obtain swift and equitable

enforcement of laws that do exist, or to obtain enforcement of the judgment of one court by a court of another jurisdiction.

legal system is based on the civil law regime, that is, it is based on written statutes;

a decision by one judge does not set a legal

precedent that is required to be followed by judges in other cases.

In addition, the interpretation of Chinese laws may be varied to reflect

domestic political changes.

The trend of legislation

over the last 20 years has significantly enhanced the protection of foreign investment and allowed for more control by foreign parties

of their investments in Chinese enterprises.

However, the promulgation of new laws, changes to existing laws and the pre-emption of local

regulations by national laws may adversely affect foreign investors.

A change in leadership, social or political disruption, or unforeseen

circumstances affecting the PRC’s political, economic or social life, may affect the PRC government’s ability to continue

to support and pursue these reforms.

Such a shift could have a material adverse effect on our business and prospects.

practical effect of the PRC legal system on our business operations in the PRC can be viewed from two separate but intertwined considerations.

First, as a matter of substantive law, the foreign invested enterprise laws provide significant protection from government interference.

In addition, these laws guarantee the full enjoyment of the benefits of corporate articles and contracts to foreign invested enterprise

participants.

These laws, however, do impose standards concerning corporate formation and governance, which are qualitatively different

from the general corporation laws of the United States.

Similarly, the PRC accounting laws mandate accounting practices, which are not

consistent with U.S.

generally accepted accounting principles.

PRC’s accounting laws require that an annual “statutory audit”

be performed in accordance with PRC accounting standards and that the books of account of foreign invested enterprises are maintained

in accordance with Chinese accounting laws.

Article 14 of the People’s Republic of China Wholly Foreign-Owned Enterprise Law requires

a wholly foreign-owned enterprise to submit certain periodic fiscal reports and statements to designated financial and tax authorities,

at the risk of business license revocation.

While the enforcement of substantive rights may appear less clear than United States procedures,

foreign invested enterprises and wholly foreign-owned enterprises are Chinese registered companies, which enjoy the same status as other

Chinese registered companies in business-to-business dispute resolution.

Any award rendered by an arbitration tribunal is enforceable

in accordance with the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958).

Therefore, as

a practical matter, although no assurances can be given, the Chinese legal infrastructure, while different in operation from its United

States counterpart, should not present any significant impediment to the operation of foreign invested enterprises.

our principal assets are located outside of the United States and most of our directors and officers reside outside of the United States,

it may be difficult for you to effect service of legal process, enforce your rights based on U.S.

federal securities laws against us

and our officers or to enforce U.S.

The practical effect of the

PRC legal system on our business operations in the PRC can be viewed from two separate but intertwined considerations.

First, as a matter

of substantive law, the foreign invested enterprise laws provide significant protection from government interference.

In addition, these

laws guarantee the full enjoyment of the benefits of corporate articles and contracts to foreign invested enterprise participants.

laws, however, do impose standards concerning corporate formation and governance, which are qualitatively different from the general corporation

laws of the United States.

Similarly, the PRC accounting laws mandate accounting practices, which are not consistent with U.S.

accepted accounting principles.

PRC’s accounting laws require that an annual “statutory audit” be performed in accordance

with PRC accounting standards and that the books of account of foreign invested enterprises are maintained in accordance with Chinese

accounting laws.

Article 14 of the People’s Republic of China Wholly Foreign-Owned Enterprise Law requires a wholly foreign-owned

enterprise to submit certain periodic fiscal reports and statements to designated financial and tax authorities, at the risk of business

license revocation.

While the enforcement of substantive rights may appear less clear than United States procedures, foreign invested

enterprises and wholly foreign-owned enterprises are Chinese registered companies, which enjoy the same status as other Chinese registered

companies in business-to-business dispute resolution.

Any award rendered by an arbitration tribunal is enforceable in accordance with

the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958).

Therefore, as a practical matter,

although no assurances can be given, the Chinese legal infrastructure, while different in operation from its United States counterpart,

should not present any significant impediment to the operation of foreign invested enterprises.

Because our principal assets are located

outside of the United States and most of our directors and officers reside outside of the United States, it may be difficult for you to

effect service of legal process, enforce your rights based on U.S.

federal securities laws against us and our officers or to enforce U.S.

court judgment against us or them in the PRC.

of our directors and officers reside outside the United States.

In addition, our operating company is located in the PRC and substantially

all of our assets are located outside of the United States.

It may therefore be difficult for investors in the United States to enforce

their legal rights based on the civil liability provisions of the U.S.

Federal securities laws against us in the courts of either the

or the PRC and, even if civil judgments are obtained in U.S.

All of our directors and

officers reside outside the United States.

In addition, our operating company is located in the PRC and substantially all of our assets

are located outside of the United States.

It may therefore be difficult for investors in the United States to enforce their legal rights

based on the civil liability provisions of the U.S.

Federal securities laws against us in the courts of either the U.S.

or the PRC and,

even if civil judgments are obtained in U.S.

courts, to enforce such judgments in PRC courts.

Further, it is unclear

if extradition treaties now in effect between the United States and the PRC would permit effective enforcement against us or our officers

and directors of criminal penalties, under the U.S.

Further, it is unclear if extradition treaties

now in effect between the United States and the PRC would permit effective enforcement against us or our officers and directors of criminal

penalties, under the U.S.

Federal securities laws or otherwise.

may be difficult for overseas regulators to conduct investigation or collect evidence within China.

claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or

practicality in China.

For example, in China, there are significant legal and other obstacles to providing information needed for regulatory

investigations or litigations initiated outside China.

Although the authorities in China may establish a regulatory cooperation mechanism

with the securities regulatory authorities of another country or region to implement cross-border supervision and administration,

such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical

cooperation mechanism.

Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020,

no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory

While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for

an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase

difficulties faced by our investors in protecting their interests.

may be required to broaden the coverage of the mandatory social security insurance programs under the Labor Law of the PRC.

PRC Labor Law, effective January 1, 2008, requires that employers enroll in the following social security insurance programs and offer

certain employer-sponsored premium benefits to eligible employees:

(1) retirement endowment, (2) healthcare insurance, (3) unemployment

insurance, (4) workers’ compensation insurance, and (5) pregnancy insurance.

Of these insurance programs, the retirement endowment

fund requires employee withholdings of 4% to 8% of the gross compensation, while the employer’s matching contribution varies from

16% to 20% of such compensation.

While the Company is enrolled in the retirement endowment fund and is withholding employees’ portion

and the employer’s portion of the endowment contribution, many of the Company’s employees have elected to waive their coverage

under these mandatory social security insurance programs in favor of certain other low-cost, local government-sponsored social security

insurance programs for residents in non-urban districts.

Although we have verified with the local government agencies for the validity

of the employee waivers and reasonably believe that we are not required to cover the employees who waived the benefits, the local government

may change its policy and ask us to broaden our insurance coverage to those who have specifically waived their rights.

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 operations.

It may be difficult for overseas regulators to conduct investigation

or collect evidence within China.

Shareholder claims or regulatory

investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China.

example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigations

initiated outside China.

Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory

authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities

regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism.

according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator

is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC.

While detailed interpretation

of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly

conduct investigation or evidence collection activities within China may further increase difficulties faced by our investors in protecting

their interests.

We may be required to broaden the coverage of the mandatory social

security insurance programs under the Labor Law of the PRC.

The PRC Labor Law, effective

January 1, 2008, requires that employers enroll in the following social security insurance programs and offer certain employer-sponsored

premium benefits to eligible employees:

(1) retirement endowment, (2) healthcare insurance, (3) unemployment insurance, (4) workers’

compensation insurance, and (5) pregnancy insurance.

Of these insurance programs, the retirement endowment fund requires employee withholdings

of 4% to 8% of the gross compensation, while the employer’s matching contribution varies from 16% to 20% of such compensation.

the Company is enrolled in the retirement endowment fund and is withholding employees’ portion and the employer’s portion

of the endowment contribution, many of the Company’s employees have elected to waive their coverage under these mandatory social

security insurance programs in favor of certain other low-cost, local government-sponsored social security insurance programs for residents

in non-urban districts.

Although we have verified with the local government agencies for the validity of the employee waivers and reasonably

believe that we are not required to cover the employees who waived the benefits, the local government may change its policy and ask us

to broaden our insurance coverage to those who have specifically waived their rights.

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 operations.

Although cross-border business

11 unchanged sentences

by imposing, and proposing to impose additional, new, or higher tariffs on certain products imported from the United States.

mutual retaliatory actions for months, on January 15, 2020, the United States and China entered into the Economic and Trade

Agreement between the United States of America and the People’s Republic of China as a phase one trade deal, effective on February 14,

addition, political tensions between the United States and China have escalated due to, among other things, trade disputes, the

COVID-19 outbreak, sanctions imposed by the U.S.

Department of Treasury on certain officials of the Hong Kong Special Administrative

Region and the PRC central government and the executive orders issued by U.S.

mutual retaliatory actions for months, on January 15, 2020, the United States and China entered into the Economic and Trade Agreement

between the United States of America and the People’s Republic of China as a phase one trade deal, effective on February 14, 2020.

In addition, political tensions

between the United States and China have escalated due to, among other things, trade disputes, the COVID-19 outbreak, sanctions imposed

Department of Treasury on certain officials of the Hong Kong Special Administrative Region and the PRC central government

and the executive orders issued by U.S.

President Donald J.

Trump in August 2020 that prohibit

certain transactions with certain Chinese companies and their applications.

Rising political tensions could reduce levels of trades,

investments, technological exchanges and other economic activities between the two major economies, which would have a material adverse

effect on global economic conditions and the stability of global financial markets.

Any of these factors could have a material adverse

effect on our business, prospects, financial condition and results of operations.

the direct impact of the current international trade tensions and political tensions between the United States and China, and any

escalation of such tensions, on the paper making industry in China is uncertain, the negative impact on general, economic, political

and social conditions may adversely impact our business, financial condition and results of operations.

Related to Our Corporate Structure

current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.

March 15, 2019, the National People’s Congress, China’s national legislative body (the “NPC”) approved the

Foreign Investment Law, which became effective on January 1, 2020.

Since it is relatively new, uncertainties exist in relation to

its interpretation and its implementation rules that are yet to be issued.

The Foreign Investment Law does not explicitly classify whether

variable interest entities that are controlled through contractual arrangements would be deemed as foreign-invested enterprises

if they are ultimately “controlled” by foreign investors.

However, it has a catch-all provision under the definition

of “foreign investment” that includes investments made by foreign investors in China through other means as provided by laws,

administrative regulations or the State Council.

Therefore, it still leaves leeway for future laws, administrative regulations or provisions

of the State Council to provide for contractual arrangements as a form of foreign investment.

There can be no assurance that our control

over our consolidated VIEs through contractual arrangements will not be deemed as a foreign investment in the future.

Foreign Investment Law grants national treatment to foreign-invested entities, except for those foreign-invested entities that

operate in industries specified as either “restricted” or “prohibited” from foreign investment in the Special

Administrative Measures for Market Access of Foreign Investment (Negative List), which was approved by the CPC Central Committee and

the State Council and issued by the State Development and Reform Commission and the Ministry of Commerce with an effective date of July 30,

2019and renew on January 1, 2022.

The Foreign Investment Law provides that foreign-invested entities operating in “restricted”

or “prohibited” industries will require market entry clearance and other approvals from relevant PRC government authorities.

If our control over our consolidated VIEs through contractual arrangements are deemed as foreign investment in the future, and any business

of our consolidated VIEs is considered “restricted” or “prohibited” from foreign investment under the “negative

list” effective at the time, we may be deemed to be in violation of the Foreign Investment Law, the contractual arrangements that

allow us to have control over our consolidated VIEs may be deemed as invalid and illegal, and we may be required to unwind such contractual

arrangements and/or restructure our business operations, any of which may have a material adverse effect on our business operation.

if future laws, administrative regulations or provisions mandate further actions to be taken by companies with respect to existing contractual

arrangements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all.

to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely

affect our current corporate structure and business operations.

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.

through our wholly foreign-owned enterprise in the PRC, have entered into a series of contractual arrangements with our consolidated

VIEs and their shareholders.

For a description of these contractual arrangements, see “Overview and Corporation History.”

If our consolidated VIEs or their shareholders fail to perform their respective obligations under these contractual arrangements, we

may incur substantial costs and expend additional resources to enforce such arrangements.

We may also have to rely on legal remedies

under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assure you will be

effective under PRC laws.

For example, if the shareholders of our consolidated VIEs were to refuse to transfer their equity interests

in the consolidated VIEs to us or our designee when we exercise the purchase option pursuant to these contractual arrangements, or if

they were otherwise to act in bad faith toward us, then we may have to take legal actions to compel them to perform their contractual

In addition, if there are any disputes or governmental proceedings involving any interest in such shareholders’ equity

interests in our VIEs, our ability to exercise shareholders’ rights or foreclose the equity interest pledges according to the contractual

arrangements may be impaired.

If these disputes or proceedings were to impair our control over our VIEs, we may not be able to maintain

effective control over our business operations in the PRC and thus would not be able to continue to consolidate our VIEs’ financial

results, which would in turn result in a material adverse effect on our business, operations and financial condition.

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 ownership.

do not have direct or indirect equity ownership of Dongfang Paper which operates a majority of our business.

Although we have entered

into contractual arrangements with Dongfang Paper and its individual owners pursuant to which we receive an economic interest in Dongfang

Paper, and exert a controlling influence over Dongfang Paper, in a manner substantially similar to a controlling equity interest, these

contractual arrangements are not as effective in providing control over Dongfang Paper as direct ownership.

For example, Dongfang Paper

may be unwilling or unable to perform their contractual obligations under our commercial agreements, including payment of consulting

fees under the Exclusive Technical Service and Business Consulting Agreement as they become due.

If that were to occur, we would not

be able to conduct our operations in the manner currently planned.

In addition, we may not succeed in enforcing our rights under the

contractual arrangements insofar as our contractual rights and legal remedies under Chinese law may be inadequate.

Furthermore, Dongfang

Paper may seek to renew their agreements on terms that are disadvantageous to us.

If we are unable to renew these agreements on favorable

terms when these agreements expire, or to enter into similar agreements with other parties, we will lose control of Dongfang Paper.

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.

are a holding company and currently conduct business through Dongfang Paper in China.

As a result, we rely on payments from the consulting

services agreement which forms a part of the contractual arrangements between Baoding Shengde and Dongfang Paper.

Since Baoding Shengde

is not a legal shareholder of Dongfang Paper under PRC statutes, the arrangement for Dongfang Paper to pay a substantial portion of its

net income to Baoding Shengde may be challenged by the PRC government, which could prevent us from receiving required funds or making

required payments to some of our service providers.

If the PRC government determines that the contractual agreements

constituting part of our VIE structure do not comply with applicable PRC regulations , or if these regulations change or are interpreted

differently in the future, we may be unable to assert our contractual rights over the assets of the VIE, and our common stock may decline

Trump in August 2020 that prohibit certain transactions with certain Chinese

companies and their applications.

Rising political tensions could reduce levels of trades, investments, technological exchanges and other

economic activities between the two major economies, which would have a material adverse effect on global economic conditions and the

stability of global financial markets.

Any of these factors could have a material adverse effect on our business, prospects, financial

condition and results of operations.

Although the direct impact

of the current international trade tensions and political tensions between the United States and China, and any escalation of such tensions,

on the paper making industry in China is uncertain, the negative impact on general, economic, political and social conditions may adversely

impact our business, financial condition and results of operations.

Risks Related to Our Corporate Structure

Our current corporate structure and business operations may be

affected by the newly enacted Foreign Investment Law.

On March 15, 2019, the National

People’s Congress, China’s national legislative body (the “NPC”) approved the Foreign Investment Law, which became

effective on January 1, 2020.

Since it is relatively new, uncertainties exist in relation to its interpretation and its implementation

rules that are yet to be issued.

The Foreign Investment Law does not explicitly classify whether variable interest entities that are controlled

through contractual arrangements would be deemed as foreign-invested enterprises if they are ultimately “controlled” by foreign

However, it has a catch-all provision under the definition of “foreign investment” that includes investments made

by foreign investors in China through other means as provided by laws, administrative regulations or the State Council.

Therefore, it

still leaves leeway for future laws, administrative regulations or provisions of the State Council to provide for contractual arrangements

as a form of foreign investment.

There can be no assurance that our control over our consolidated VIE through contractual arrangements

will not be deemed as a foreign investment in the future.

The Foreign Investment Law

grants national treatment to foreign-invested entities, except for those foreign-invested entities that operate in industries specified

as either “restricted” or “prohibited” from foreign investment in the Special Administrative Measures for Market

Access of Foreign Investment (Negative List), which was approved by the CPC Central Committee and the State Council and issued by the

State Development and Reform Commission and the Ministry of Commerce with an effective date of July 30, 2019and renew on January 1, 2022.

The Foreign Investment Law provides that foreign-invested entities operating in “restricted” or “prohibited” industries

will require market entry clearance and other approvals from relevant PRC government authorities.

If our control over our consolidated

VIE through contractual arrangements are deemed as foreign investment in the future, and any business of our consolidated VIE is considered

“restricted” or “prohibited” from foreign investment under the “negative list” effective at the time,

we may be deemed to be in violation of the Foreign Investment Law, the contractual arrangements that allow us to have control over our

consolidated VIE may be deemed as invalid and illegal, and we may be required to unwind such contractual arrangements and/or restructure

our business operations, any of which may have a material adverse effect on our business operation.

Furthermore, if future laws,

administrative regulations or provisions mandate further actions to be taken by companies with respect to existing contractual arrangements,

we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all.

Failure to take timely

and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our

current corporate structure and business operations.

Any failure by our consolidated VIE or its

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

We, through our wholly foreign-owned

enterprise in the PRC, have entered into a series of contractual arrangements with our consolidated VIE and its shareholders.

For a description

of these contractual arrangements, see “Overview and Corporation History.” If our consolidated VIE or its shareholders fail

to perform their respective obligations under these contractual arrangements, we may incur substantial costs and expend additional resources

to enforce such arrangements.

We may also have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive

relief, and claiming damages, which we cannot assure you will be effective under PRC laws.

For example, if the shareholders of our consolidated

VIE were to refuse to transfer their equity interests in the consolidated VIE to us or our designee when we exercise the purchase option

pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward us, then we may have to take legal actions

to compel them to perform their contractual obligations.

In addition, if there are any disputes or governmental proceedings involving

any interest in such shareholders’ equity interests in our VIE, our ability to exercise shareholders’ rights or foreclose

the equity interest pledges according to the contractual arrangements may be impaired.

If these disputes or proceedings were to impair

our control over our VIE, we may not be able to maintain effective control over our business operations in the PRC and thus would not

be able to continue to consolidate our VIE’s financial results, which would in turn result in a material adverse effect on our business,

operations and financial condition.

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

We do not have direct or

indirect equity ownership of Dongfang Paper which operates a majority of our business.

Although we have entered into contractual arrangements

with Dongfang Paper and its individual owners pursuant to which we receive an economic interest in Dongfang Paper, and exert a controlling

influence over Dongfang Paper, in a manner substantially similar to a controlling equity interest, these contractual arrangements are

not as effective in providing control over Dongfang Paper as direct ownership.

For example, Dongfang Paper may be unwilling or unable

to perform their contractual obligations under our commercial agreements, including payment of consulting fees under the Exclusive Technical

Service and Business Consulting Agreement as they become due.

If that were to occur, we would not be able to conduct our operations in

the manner currently planned.

In addition, we may not succeed in enforcing our rights under the contractual arrangements insofar as our

contractual rights and legal remedies under Chinese law may be inadequate.

Furthermore, Dongfang Paper may seek to renew their agreements

on terms that are disadvantageous to us.

If we are unable to renew these agreements on favorable terms when these agreements expire, or

to enter into similar agreements with other parties, we will lose control of Dongfang Paper.

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.

We are a holding company

and currently conduct business through Dongfang Paper in China.

As a result, we rely on payments from the consulting services agreement

which forms a part of the contractual arrangements between Baoding Shengde and Dongfang Paper.

Since Baoding Shengde is not a legal shareholder

of Dongfang Paper under PRC statutes, the arrangement for Dongfang Paper to pay a substantial portion of its net income to Baoding Shengde

may be challenged by the PRC government, which could prevent us from receiving required funds or making required payments to some of our

service providers.

If the PRC government determines that the contractual

agreements constituting part of our VIE structure do not comply with applicable PRC regulations , or if these regulations change or are

interpreted differently in the future, we may be unable to assert our contractual rights over the assets of the VIE, and our common stock

may decline in value.

Recently, the PRC government

8 unchanged sentences

Additionally, our common stock may decline in value or become worthless if we are unable to assert our contractual control rights over

the assets of our PRC Subsidiary that conducts all or substantially all of our business operations.

contractual arrangements under a VIE Structure may not be as effective as direct ownership in respect of our relationship with the VIE,

and thus, we may incur substantial costs to enforce the terms of the arrangements, which we may not be able to enforce at all.

contractual arrangements may not be as effective as direct ownership in respect of our relationship with the VIE.

For example, the VIE

and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations

in an acceptable manner or taking other actions that are detrimental to our interests.

If we had direct ownership of the VIE, we would

be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement

changes, subject to any applicable fiduciary obligations, at the management and operational level.

However, under the VIE Agreements,

we rely on the performance by the VIE and its shareholders of their obligations under the contracts to exercise control over the VIE.

The shareholders of the consolidated VIE may not act in the best interests of our company or may not perform their obligations under

these contracts.

Such risks exist throughout the period in which we intend to operate certain portions of our business through the contractual

arrangements with the VIE.

the VIE or its shareholders fail to perform their respective obligations under the contractual arrangements, we may have to incur substantial

costs and expend additional resources to enforce such arrangements.

For example, if the shareholders of the VIE refuse to transfer their

equity interest in the VIE to us or our designee if we exercise the purchase option pursuant to the contractual arrangements, or if they

otherwise act in bad faith toward us, then we may have to take legal actions to compel them to perform their contractual obligations.

In addition, if any third parties claim any interest in such shareholders’ equity interests in the VIE, our ability to exercise

shareholders’ rights or foreclose the share pledge according to the contractual arrangements may be impaired.

If these or other

disputes between the shareholders of the VIE and third parties were to impair our relationship with the VIE, our ability to consolidate

the financial results of the VIE would be affected, which would in turn result in a material adverse effect on the business, operations

and financial condition.

shareholders of Dongfang Paper may have actual or potential conflicts of interests with us, which may adversely affect our business.

the assets of our PRC Subsidiaries that conduct all or substantially all of our business operations.

The contractual arrangements under

a VIE Structure may not be as effective as direct ownership in respect of our relationship with the VIE, and thus, we may incur substantial

costs to enforce the terms of the arrangements, which we may not be able to enforce at all.

The contractual arrangements

may not be as effective as direct ownership in respect of our relationship with the VIE.

For example, the VIE and its shareholders could

breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking

other actions that are detrimental to our interests.

If we had direct ownership of the VIE, we would be able to exercise our rights as

a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes, subject to any applicable

fiduciary obligations, at the management and operational level.

However, under the VIE Agreements, we rely on the performance by the VIE

and its shareholders of their obligations under the contracts to exercise control over the VIE.

The shareholders of the consolidated VIE

may not act in the best interests of our company or may not perform their obligations under these contracts.

Such risks exist throughout

the period in which we intend to operate certain portions of our business through the contractual arrangements with the VIE.

If the VIE or its shareholders

fail to perform their respective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional

resources to enforce such arrangements.

For example, if the shareholders of the VIE refuse to transfer their equity interest in the VIE

to us or our designee if we exercise the purchase option pursuant to the contractual arrangements, or if they otherwise act in bad faith

toward us, then we may have to take legal actions to compel them to perform their contractual obligations.

In addition, if any third parties

claim any interest in such shareholders’ equity interests in the VIE, our ability to exercise shareholders’ rights or foreclose

the share pledge according to the contractual arrangements may be impaired.

If these or other disputes between the shareholders of the

VIE and third parties were to impair our relationship with the VIE, our ability to consolidate the financial results of the VIE would

be affected, which would in turn result in a material adverse effect on the business, operations and financial condition.

The shareholders of Dongfang Paper may have actual or potential

conflicts of interests with us, which may adversely affect our business.

As of the date of this annual

10 unchanged sentences

We cannot assure you that when conflicts of interest arise any or all of these shareholders will act

in the best interests of IT Tech Packagingor such conflicts will be resolved in IT Tech Packaging’s favor.

in the best interests of IT Tech Packaging or such conflicts will be resolved in IT Tech Packaging’s favor.

Currently, IT Tech Packaging

3 unchanged sentences

uncertainty as to the outcome of any such legal proceedings.

Chairman, Chief Executive Officer and 5.4% shareholder, Zhenyong Liu, owns 93.39% of the equity interest in Dongfang Paper.

of interests between his duties to IT Tech and to Dongfang Paper may arise.

We cannot assure you that when conflicts of interest arise,

he will act in the best interests of IT Tech or that any conflict of interest will be resolved in our favor.

These conflicts may result

in management decisions that could negatively affect our operations and potentially result in the loss of opportunities.

may lose the ability to use and enjoy assets held by the VIE that are material to the operation of its business if the entity goes bankrupt

or becomes subject to a dissolution or liquidation proceeding.

part of our contractual arrangements with the VIE, the entity holds certain assets that are material to the operation of our business,

including permits, domain names and IP rights.

If the VIE goes bankrupt and all or part of its assets become subject to liens or rights

of third-party creditors, we may be unable to continue some or all of its business activities, which could adversely affect our business,

financial condition and results of operations.

Under the contractual arrangements, the VIE may not, in any manner, sell, transfer, mortgage

or dispose of its assets or legal or beneficial interests in the business without our prior consent.

If the VIE undergoes a voluntary

or involuntary liquidation proceeding, the independent third party creditors may claim rights to some or all of these assets, thereby

hindering our ability to operate our business, which could adversely affect our business, financial condition and results of operations.

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 expenses.

could face material and adverse tax consequences if the PRC tax authorities determine that our contracts with Dongfang Paper and its

shareholders were not entered into based on arm’s length negotiations.

If the PRC tax authorities determine that these contracts

were not entered into on an arm’s length basis, they may adjust our income and expenses for PRC tax purposes in the form of a transfer

pricing adjustment.

Such an adjustment may require that we pay additional PRC taxes plus applicable penalties and interest, if any.

may lose the ability to use, or otherwise benefit from, the licenses, approvals and assets held by the VIE, which could severely disrupt

our business, render us unable to conduct some of our business operations and constrain our growth.

Tech Packaging relies on contractual arrangements with the VIE to use, or otherwise benefit from, certain foreign restricted licenses

and permits that it needs or may need in the future as its business continues to expand.

The contractual arrangements contain terms that

specifically obligate the VIE’s shareholders to ensure the valid existence of the VIE and restrict the disposal of material assets

However, in the event the VIE’s shareholders breach the terms of these contractual arrangements and voluntarily

liquidate the VIE, or the VIE declares bankruptcy and all or part of its assets become subject to liens or rights of third-party creditors,

or is otherwise disposed of without IT Tech’s consent, IT Tech may be unable to conduct its business operations or otherwise benefit

from the assets held by the VIE, which could have an adverse effect on IT Tech’s business, financial condition and results of operations.

Furthermore, if the VIE undergoes a voluntary or involuntary liquidation proceeding, its shareholders or unrelated third-party creditors

may claim rights to some or all of the assets of the VIE, thereby hindering IT Tech’s ability to operate its business.

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.

Call Option Agreement with Dongfang Paper and its shareholders gives our Chinese subsidiary, Baoding Shengde or its designated entity

or natural person, the option to purchase all or part of the equity interests in Dongfang Paper.

The option may not be exercised by Baoding

Shengde if the exercise would violate any applicable laws and regulations in China or cause any license or permit held by, and necessary

for the operation of Dongfang Paper, to be cancelled or invalidated.

Under the laws of China, if a foreign entity, through a foreign

investment company that it invests in, acquires a domestic related company, China’s regulations regarding mergers and acquisitions

may technically apply to the transaction.

If these regulations apply, an examination and approval of the transaction by China’s

Ministry of Commerce (“MOFCOM”), or its local counterparts would be required.

In addition, an appraisal of the equity interest

or the assets to be acquired would also be mandatory.

Since the scope of business activities (making of cultural paper products) as defined

in the business license of Baoding Shengde does not involve the MOFCOM approval and monitoring, we do not believe at this time that an

approval or an appraisal is required for Baoding Shengde to exercise its option to acquire Dongfang Paper.

In light of the different

views on this issue, however, it is possible that the central MOFCOM office in Beijing will issue a standardized opinion imposing the

approval and appraisal requirement.

If we are not able to purchase the equity of Dongfang Paper, then we will lose a substantial portion

of our ability to control Dongfang Paper and our ability to ensure that Dongfang Paper will act in our interests.

Related to Our Common Stock

recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable

Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of

their auditors, especially the non-U.S.

auditors who are not inspected by the PCAOB.

These developments could add uncertainties to investing

in our securities.

April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D.

Duhnke III, along with other senior SEC staff, released a joint

statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including

The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers

in China and higher risks of fraud in emerging markets.

May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply a minimum offering size requirement for companies primarily

operating in a “Restrictive Market,” (ii) adopt a new requirement relating to the qualification of management or the

board of directors for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or

listed company based on the qualifications of the company’s auditor.

We are very likely to be deemed as a company primarily

operating in a Restrictive Market under such proposed rules of Nasdaq.

Therefore, Nasdaq might apply the additional and more

stringent criteria for our initial and continued listing, which might cause delay or even denial of our listing

May 20, 2020, the U.S.

Senate passed the Holding Foreign Companies Accountable Act, or HFCAA, requiring a foreign company to certify

it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign

auditor not subject to PCAOB inspection.

If the PCAOB is unable to inspect the company’s auditors for three consecutive years,

the issuer’s securities are prohibited to trade on a national exchange.

On December 2, 2020, the U.S.

House of Representatives

approved the Holding Foreign Companies Accountable Act.

On December 18, 2020, the Holding Foreign Companies Accountable Act was signed

March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure

requirements of the Act.

The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report

on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction

and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that

jurisdiction.

The SEC will implement a process for identifying such a registrant and any such identified registrant will be required

to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction,

and will also require disclosure in the registrant’s annual report regarding the audit arrangements of, and governmental influence

on, such a registrant.

June 22, 2021, the U.S.

Senate passed Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which, if passed

House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering

the prohibitions under the Holding Foreign Companies Accountable Act from three years to two.

September 22, 2021, the PCAOB adopted rules to create a framework for the PCAOB to use when determining, as contemplated under the HFCAA,

whether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because

of a position taken by one or more authorities in that jurisdiction.

December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the Holding

Foreign Companies Accountable Act.

The rules apply to registrants that the SEC identifies as having filed an annual report with an audit

report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or

investigate completely because of a position taken by an authority in foreign jurisdictions.

December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely

registered public accounting firms headquartered in:

(1) mainland China of the People’s Republic of China, because of a position

taken by one or more authorities in mainland China;

and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because

of a position taken by one or more authorities in Hong Kong..

The PCAOB has made such designations as mandated under the HFCAA.

to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms

and thus are at risk of such suspensions in the future.

PCAOB is currently unable to conduct inspections in China without the approval of Chinese government authorities.

If it is later determined

that the PCAOB is unable to inspect or investigate our auditor completely, investors may be deprived of the benefits of such inspection.

Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken

in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result

in a lack of assurance that our financial statements and disclosures are adequate and accurate.

Our auditor, WWC, P.C., Certified

Public Accountants, is an independent registered public accounting firm with the PCAOB, and as an auditor of publicly traded companies

in the U.S., is subject to laws in the U.S.

pursuant to which the PCAOB conducts regular inspections to assess its compliance with the

applicable professional standards.

WWC, P.C., Certified Public Accountants, is based in the United States and has been inspected by the

PCAOB on a regular basis, with the last inspection in November 2021.

WWC, P.C., Certified Public Accountants, is not headquartered in

mainland China or Hong Kong and was not identified as a firm subject to the determinations announced by the PCAOB on December 16, 2021.

Should the PCAOB be unable to fully conduct inspection of our auditor’s work papers in China, it will make it difficult to evaluate

the effectiveness of our auditor’s audit procedures or equity control procedures.

Investors may consequently lose confidence in

our reported financial information and procedures or quality of the financial statements, which would adversely affect us and our securities.

Moreover, if trading in our securities is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect

or fully investigate our auditor at such future time, an exchange may determine to delist our securities.

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.

adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of U.S.

public companies’

internal control over financial reporting.

The standards that must be met for management to assess the internal control over financial

reporting as effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards.

While we have not detected any significant deficiency or material weakness in our internal control and with respect to the assessment

of the internal control for the year ended December 31, 2021, we cannot guarantee the implementation of controls and procedures in future

years to be without any significant deficiency or material weakness.

we become directly subject to the scrutiny involving U.S.

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.

public companies that have substantially all of their operations in China have been the subject of intense scrutiny by investors, financial

commentators and regulatory agencies.

Much of the scrutiny has centered around financial and accounting irregularities and mistakes,

a lack of effective internal controls over financial reporting and, in many cases, allegations of fraud.

As a result of the scrutiny,

the publicly traded stock of many U.S.

listed China-based companies that have been the subject of such scrutiny has sharply decreased

Many of these companies are now subject to shareholder lawsuits and/or SEC enforcement actions that are conducting internal

and/or external investigations into the allegations.

If we become the subject of any such scrutiny, whether any allegations are true

or not, we may have to expend significant resources to investigate such allegations and/or defend our company.

Such investigations or

allegations will be costly and time-consuming and distract our management from our business plan and could result in our reputation

being harmed and our stock price could decline as a result of such allegations, regardless of the truthfulness of the allegations.

officers and directors control us through their positions and stock ownership and their interests may differ from other stockholders.

of March 1, 2021, there were 96,968,400 shares of our common stock issued and outstanding.

Zhenyong Liu, our Chief Executive Officer,

beneficially owns approximately 4.7% of our common stock.

As a result, he is able to influence the outcome of stockholder votes on various

matters, including the election of directors and extraordinary corporate transactions including business combinations.

interests may differ from those of other stockholders.

Our Chairman, Chief Executive

Officer and 4.7% shareholder, Zhenyong Liu, owns 100% of the equity interest in Dongfang Paper.

Conflicts of interests between his duties

to IT Tech and to Dongfang Paper may arise.

We cannot assure you that when conflicts of interest arise, he will act in the best interests

of IT Tech or that any conflict of interest will be resolved in our favor.

These conflicts may result in management decisions that could

negatively affect our operations and potentially result in the loss of opportunities.

We may lose the ability to use and enjoy

assets held by the VIE that are material to the operation of its business if the entity goes bankrupt or becomes subject to a dissolution

or liquidation proceeding.

As part of our contractual

arrangements with the VIE, the entity holds certain assets that are material to the operation of our business, including permits, domain

names and IP rights.

If the VIE goes bankrupt and all or part of its assets become subject to liens or rights of third-party creditors,

we may be unable to continue some or all of its business activities, which could adversely affect our business, financial condition and

results of operations.

Under the contractual arrangements, the VIE may not, in any manner, sell, transfer, mortgage or dispose of its

assets or legal or beneficial interests in the business without our prior consent.

If the VIE undergoes a voluntary or involuntary liquidation

proceeding, the independent third party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate

our business, which could adversely affect our business, financial condition and results of operations.

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 expenses.

We could face material and

adverse tax consequences if the PRC tax authorities determine that our contracts with Dongfang Paper and its shareholders were not entered

into based on arm’s length negotiations.

If the PRC tax authorities determine that these contracts were not entered into on an arm’s

length basis, they may adjust our income and expenses for PRC tax purposes in the form of a transfer pricing adjustment.

Such an adjustment

may require that we pay additional PRC taxes plus applicable penalties and interest, if any.

We may lose the ability to use, or otherwise

benefit from, the licenses, approvals and assets held by the VIE, which could severely disrupt our business, render us unable to conduct

some of our business operations and constrain our growth.

IT Tech Packaging relies on

contractual arrangements with the VIE to use, or otherwise benefit from, certain foreign restricted licenses and permits that it needs

or may need in the future as its business continues to expand.

The contractual arrangements contain terms that specifically obligate the

VIE’s shareholders to ensure the valid existence of the VIE and restrict the disposal of material assets of the VIE.

the event the VIE’s shareholders breach the terms of these contractual arrangements and voluntarily liquidate the VIE, or the VIE

declares bankruptcy and all or part of its assets become subject to liens or rights of third-party creditors, or is otherwise disposed

of without IT Tech’s consent, IT Tech may be unable to conduct its business operations or otherwise benefit from the assets held

by the VIE, which could have an adverse effect on IT Tech’s business, financial condition and results of operations.

if the VIE undergoes a voluntary or involuntary liquidation proceeding, its shareholders or unrelated third-party creditors may claim

rights to some or all of the assets of the VIE, thereby hindering IT Tech’s ability to operate its business.

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.

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.

Our Call Option Agreement

with Dongfang Paper and its shareholders gives our Chinese subsidiary, Baoding Shengde or its designated entity or natural person, the

option to purchase all or part of the equity interests in Dongfang Paper.

The option may not be exercised by Baoding Shengde if the exercise

would violate any applicable laws and regulations in China or cause any license or permit held by, and necessary for the operation of

Dongfang Paper, to be cancelled or invalidated.

Under the laws of China, if a foreign entity, through a foreign investment company that

it invests in, acquires a domestic related company, China’s regulations regarding mergers and acquisitions may technically apply

to the transaction.

If these regulations apply, an examination and approval of the transaction by China’s Ministry of Commerce (“MOFCOM”),

or its local counterparts would be required.

In addition, an appraisal of the equity interest or the assets to be acquired would also

be mandatory.

Since the scope of business activities (making of cultural paper products) as defined in the business license of Baoding

Shengde does not involve the MOFCOM approval and monitoring, we do not believe at this time that an approval or an appraisal is required

for Baoding Shengde to exercise its option to acquire Dongfang Paper.

In light of the different views on this issue, however, it is possible

that the central MOFCOM office in Beijing will issue a standardized opinion imposing the approval and appraisal requirement.

not able to purchase the equity of Dongfang Paper, then we will lose a substantial portion of our ability to control Dongfang Paper and

our ability to ensure that Dongfang Paper will act in our interests.

Risks Related to Our Common Stock

Our common stock may be delisted from the NYSE American under

the Holding Foreign Companies Accountable Act if the PCAOB is unable to adequately inspect audit documentation located in China.

The delisting

of our common stock, or the threat of their being delisted, may materially and adversely affect the value of your investment.

The HFCAA, was enacted on December 18, 2020.

The HFCAA states if the

SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection

by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit such ordinary shares from being traded on a national

securities exchange or in the over the counter trading market in the U.S.

On March 24, 2021, the SEC

adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA.

will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to

be subsequently established by the SEC.

The SEC is assessing how to implement other requirements of the HFCAA, including the listing and

trading prohibition requirements described above.

Furthermore, on June 22, 2021, the U.S.

Senate passed the Accelerating Holding Foreign

Companies Accountable Act, which was signed into law on December 29, 2022 amends the HFCAA and requires the SEC to prohibit an issuer’s

securities from trading on any U.S.

stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead

On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use

when determining, as contemplated under the HFCAA Act, whether the PCAOB is unable to inspect or investigate completely registered public

accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

2, 2021, the SEC issued amendments to finalize the interim final rules previously adopted in March 2021 to implement the submission and

disclosure requirements in the HFCAA.

The rules apply to registrants that the SEC identifies as having filed an annual report with an

audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect

or investigate completely because of a position taken by an authority in a foreign jurisdiction.

On December 16, 2021, the PCAOB issued

a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered

(1) mainland China of the PRC, because of a position taken by one or more authorities in mainland China;

and (2) Hong Kong, a Special

Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.

The PCAOB has made

such designations as mandated under the HFCAA.

Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify

issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future.

On August 26, 2022, the PCAOB

signed the Protocol with the CSRC and the MOF of the People’s Republic of China, governing inspections and investigations of audit

firms based in mainland China and Hong Kong.

The Protocol remains unpublished and is subject to further explanation and implementation.

Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any

issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC.

On December 15, 2022, the

PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered

in China mainland and Hong Kong completely in 2022.

The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable

to inspect or investigate completely registered public accounting firms headquartered in China mainland and Hong Kong.

However, whether

the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in

China mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control.

The PCAOB is continuing to demand complete access in China mainland and Hong Kong moving forward and is already making plans to resume

regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as

The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed.

Therefore, the PCAOB may in the future determine that it is unable to inspect or investigate completely registered public accounting firms

in mainland China and Hong Kong.

Our auditor, WWC, P.C., Certified Public Accountants, the independent

registered public accounting firm that issued the audit report included in our annual report, an auditor of companies that are traded

publicly in the United States and an U.S.-based accounting firm registered with the PCAOB, is subject to laws in the United States pursuant

to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.

Our auditor is based

in the United States and is subject to inspection by the PCAOB on a regular basis with the last inspection in November 2021.

However, our auditor’s working papers related to us and the consolidated

VIE and its subsidiary are located in China.

If our auditor is not permitted to provide requested audit work papers located in China to

the PCAOB, investors would be deprived of the benefits of PCAOB’s oversight of our auditor through such inspections which could

result in limitation or restriction to our access to the U.S.

capital markets, and trading of our securities may be prohibited under the

HFCAA, which would result in the delisting of our securities from the NYSE American.

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.

Rules adopted by the SEC

pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of U.S.

public companies’ internal control over

financial reporting.

The standards that must be met for management to assess the internal control over financial reporting as effective

are complex, and require significant documentation, testing and possible remediation to meet the detailed standards.

While we have not

detected any significant deficiency or material weakness in our internal control and with respect to the assessment of the internal control

for the year ended December 31, 2022, we cannot guarantee the implementation of controls and procedures in future years to be without

any significant deficiency or material weakness.

If we become directly subject to the scrutiny

involving U.S.

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.

public companies that

have substantially all of their operations in China have been the subject of intense scrutiny by investors, financial commentators and

regulatory agencies.

Much of the scrutiny has centered around financial and accounting irregularities and mistakes, a lack of effective

internal controls over financial reporting and, in many cases, allegations of fraud.

As a result of the scrutiny, the publicly traded

stock of many U.S.

listed China-based companies that have been the subject of such scrutiny has sharply decreased in value.

Many of these

companies are now subject to shareholder lawsuits and/or SEC enforcement actions that are conducting internal and/or external investigations

into the allegations.

If we become the subject of any such scrutiny, whether any allegations are true or not, we may have to expend significant

resources to investigate such allegations and/or defend our company.

Such investigations or allegations will be costly and time-consuming

and distract our management from our business plan and could result in our reputation being harmed and our stock price could decline as

a result of such allegations, regardless of the truthfulness of the allegations.

Our officers and directors control us through their positions

and stock ownership and their interests may differ from other stockholders.

As of March 23, 2023, there

were 10,065,920 shares of our common stock issued and outstanding.

Zhenyong Liu, our Chief Executive Officer, beneficially owns approximately

4.7% of our common stock.

As a result, he is able to influence the outcome of stockholder votes on various matters, including the election

of directors and extraordinary corporate transactions including business combinations.

Liu’s interests may differ from those

of other stockholders.

Furthermore, ownership of 4.7% of our common stock by Mr.

Liu reduces the public

float and liquidity, and may affect the market price, of our common stock as traded on the NYSE American.

may not continue to pay cash dividends and any return on investment may be limited to the value of our common stock.

we intend to retain the majority of any future earnings for use in the operation and expansion of our business, we did declare four quarterly

cash dividends in April 2012 and November 2013.

Although it is likely that our Board of Directors will continue the quarterly cash dividend

as a regular dividend policy in the coming years, there is no guarantee that the cash dividend will not be discontinued or reduced.

we decide to continue the cash dividend, as a holding company, our ability to pay dividends and meet other obligations depends upon the

receipt of dividends or other payments from our operating subsidiaries.

In addition, our operating subsidiaries, from time to time, may

be subject to restrictions on their ability to make distributions to us, including restrictions on the conversion of local currency into

dollars or other hard currency and other regulatory restrictions.

common stock may be affected by limited trading volume and may fluctuate significantly.

common stock is traded on the NYSE American.

Although a trading market has developed for our common stock, there can be no assurance

that the trading market for our common stock will be sustained.

Failure to maintain a trading market for our common stock may adversely

affect our shareholders’ ability to sell our common stock in short time periods, or at all.

Our common stock has experienced, and

may experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our common

financings may dilute stockholders or impair our financial condition.

the future, we may need to raise additional funds through public or private financing, which might include the sale of equity securities.

The issuance of equity securities could result in financial and voting dilution to our existing stockholders.

The issuance of debt could

result in effective subordination of stockholders’ interests to the debt, create the possibility of default, and limit our financial

and business alternatives.

Liu reduces the public float and liquidity, and may affect

the market price, of our common stock as traded on the NYSE American.

We may not continue to pay cash dividends and any return on investment

may be limited to the value of our common stock.

While we intend to retain

the majority of any future earnings for use in the operation and expansion of our business, we did declare four quarterly cash dividends

in April 2012 and November 2013.

Although it is likely that our Board of Directors will continue the quarterly cash dividend as a regular

dividend policy in the coming years, there is no guarantee that the cash dividend will not be discontinued or reduced.

Should we decide

to continue the cash dividend, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt

of dividends or other payments from our operating subsidiaries.

In addition, our operating subsidiaries, from time to time, may be subject

to restrictions on their ability to make distributions to us, including restrictions on the conversion of local currency into U.S.

or other hard currency and other regulatory restrictions.

Our common stock may be affected by limited trading volume and

may fluctuate significantly.

Our common stock is traded

on the NYSE American.

Although a trading market has developed for our common stock, there can be no assurance that the trading market

for our common stock will be sustained.

Failure to maintain a trading market for our common stock may adversely affect our shareholders’

ability to sell our common stock in short time periods, or at all.

Our common stock has experienced, and may experience in the future,

significant price and volume fluctuations, which could adversely affect the market price of our common stock.

Future financings may dilute stockholders or impair our financial

In the future, we may need

to raise additional funds through public or private financing, which might include the sale of equity securities.

The issuance of equity

securities could result in financial and voting dilution to our existing stockholders.

The issuance of debt could result in effective

subordination of stockholders’ interests to the debt, create the possibility of default, and limit our financial and business alternatives.

Unresolved Staff Comments

Not applicable.

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 1A. Risk Factors