What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-09 compared with 2023-08-10 · 461 added, 421 removed, 718 unchanged (55% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

OF JUNE 30, 2023 AND DECEMBER 31, 2022

OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

and bank balances

Accounts receivable (net of allowance for doubtful accounts of $ 56,674 and $ 881,878 as of September 30, 2023 and December 31, 2022, respectively)

and other current assets

from related parties

current assets

Cash and bank balances

Restricted cash

Accounts receivable (net of allowance for doubtful accounts of $ 48,646 and $ 881,878 as of June 30, 2023 and December 31, 2022, respectively)

Prepayments and other current assets

Due from related parties

Total current assets

Prepayment on property, plant and equipment

Operating lease right-of-use assets, net

Finance lease right-of-use assets, net

Property, plant, and equipment, net

Value-added tax recoverable

Deferred tax asset non-current

on property, plant and equipment

lease right-of-use assets, net

plant, and equipment, net

tax recoverable

tax asset non-current

$ 188,997,707

$ 204,447,233

LIABILITIES AND STOCKHOLDERS’

AND STOCKHOLDERS’ EQUITY

portion of long-term loans

from customers

to related parties

payroll and employee benefits

payables and accrued liabilities

taxes payable

current liabilities

Short-term bank loans

Current portion of long-term loans

Lease liability

Accounts payable

Advance from customers

Due to related parties

Accrued payroll and employee benefits

Other payables and accrued liabilities

Income taxes payable

Total current liabilities

Long-term loans

Deferred gain on sale-leaseback

Lease liability - non-current

Derivative liability

Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $ 19,100,011 and $ 16,784,878 as of June 30, 2023 and December 31, 2022, respectively)

Commitments and Contingencies

Stockholders’ Equity

Common stock, 50,000,000 shares authorized, $ 0.001 par value per share, 10,065,920 shares issued and outstanding as of June 30, 2023 and December, 31, 2022.

Additional paid-in capital

Statutory earnings reserve

Accumulated other comprehensive loss

gain on sale-leaseback

liability - non-current

Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $ 12,010,014 and $ 16,784,878 as of September 30, 2023 and December 31, 2022, respectively)

and Contingencies

Stockholders’

Common stock, 50,000,000 shares authorized, $ 0.001 par value per share, 10,065,920 shares issued and outstanding as of September 30, 2023 and December, 31, 2022.

paid-in capital

earnings reserve

other comprehensive loss

( 12,931,871 )

( 7,514,540 )

Retained earnings

stockholders’ equity

4 unchanged sentences

TECH PACKAGING, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

Three Months Ended

Six Months Ended

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

Cost of sales

3 unchanged sentences

( 75,251,646 )

Gross (Loss) Profit

Selling, general and administrative expenses

3 unchanged sentences

( 8,541,224 )

Loss on impairment of assets

Loss on impairment of

Loss from Operations

6 unchanged sentences

Gain on acquisition

Gain (Loss) on derivative liability

Gain (Loss) on derivative

Loss before Income Taxes

1 unchanged sentence

( 1,455,031 )

Provision for Income Taxes

( 5,614,002 )

( 4,823,976 )

for Income Taxes

( 1,975,368 )

Other Comprehensive Loss

Foreign currency translation adjustment

( 1,887,318 )

1 unchanged sentence

( 4,663,445 )

Other Comprehensive Income

Foreign currency translation

( 11,171,156 )

Total Comprehensive Loss

( 5,417,331 )

( 21,769,765 )

Comprehensive Loss

$ ( 831,760 )

$ ( 13,058,474 )

$ ( 11,379,357 )

$ ( 26,433,210 )

Losses Per Share:

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

Six Months Ended

THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

Cash Flows from Operating Activities:

1 unchanged sentence

$ ( 4,663,445 )

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net

cash provided by operating activities:

Depreciation and amortization

(Gain) Loss on derivative liability

( 1,346,633 )

(Gain) Loss from disposal and impairment of property, plant and equipment

(Gain) Loss from disposal and impairment of

property, plant and equipment

Allowance for bad debts

Share-based compensation and expenses

Gain on acquisition

( 1,197,630 )

Changes in operating assets and liabilities:

3 unchanged sentences

( 2,631,661 )

( 1,111,160 )

Accounts payable

4 unchanged sentences

Income taxes payable

Net Cash Provided by Operating Activities

Cash Flows from Investing Activities:

Cash Provided by Operating Activities

Cash Flows from Investing

Purchases of property, plant and equipment

( 9,211,711 )

( 1,681,979 )

Acquisition of land

( 6,507,431 )

Net Cash Used in Investing Activities

Cash Used in Investing Activities

( 9,211,711 )

( 8,189,410 )

Cash Flows from Financing Activities:

Cash Flows from Financing

Proceeds from short term bank loans

1 unchanged sentence

Repayment of bank loans

( 5,549,150 )

Payment of capital lease obligation

Loan to a related party (net)

Net Cash Provided by Financing Activities

Effect of Exchange Rate Changes on Cash and Cash Equivalents

Net Increase in Cash and Cash Equivalents

Cash, Cash Equivalents and Restricted Cash - Beginning of Period

Cash, Cash Equivalents and Restricted Cash - End of Period

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest, net of capitalized interest cost

Cash paid for income taxes

Loan to a related party

Cash Provided by Financing Activities

of Exchange Rate Changes on Cash and Cash Equivalents

( 1,266,146 )

Net (Decrease) Increase

in Cash and Cash Equivalents

Cash Equivalents and Restricted Cash - Beginning of Period

Cash Equivalents and Restricted Cash - End of Period

Supplemental Disclosure

of Cash Flow Information:

Cash paid for interest,

net of capitalized interest cost

Cash paid for income

Cash and bank balances

Restricted cash

Total cash, cash equivalents and restricted cash shown in the statement of cash flows

cash, cash equivalents and restricted cash shown in the statement of cash flows

accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

Comprehensive

2 unchanged sentences

$ 215,749,908

of shares to officer and directors

currency translation adjustment

3 unchanged sentences

( 4,663,445 )

at June 30, 2022

Balance at Sep

$ ( 11,273,597 )

10 unchanged sentences

( 5,962,026 )

at June 30, 2023

at September 30, 2023

$ ( 12,931,871 )

3 unchanged sentences

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Organization and Business Background

(1) Organization

and Business Background

Tech Packaging, Inc.

9 unchanged sentences

of common stock, par value $ 0.001 per share (the “Common Stock”), at a ratio of 1-for-10 (the “Reverse Stock Split”).

The Reverse Stock Split became effective on July 7, 2022 (the “Effective Date”), and the shares began trading on the split-adjusted

The Reverse Stock Split become effective on July 7, 2022 (the “Effective Date”), and the shares began trading on the split-adjusted

basis on the NYSE American under the Company’s existing trading symbol “ITP” at market open on July 8, 2022.

86 unchanged sentences

of high quality material solutions for textile, cosmetics and paper production.

The Company has no direct equity interest in Dongfang

However, through the Contractual Agreements described above, the Company is found to be the primary beneficiary (the “Primary

Beneficiary”) of Dongfang Paper and is deemed to have the effective control over Dongfang Paper’s activities that most significantly

affect its economic performance, resulting in Dongfang Paper and its subsidiary, being treated as a controlled variable interest entity

of the Company in accordance with Topic 810 - Consolidation of the Accounting Standards Codification (the “ASC”) issued by

the Financial Accounting Standard Board (the “FASB”).

The revenue generated from Dongfang Paper and Tengsheng Paper for the

three months ended June 30, 2023 and 2022 was accounted for 99.72 % and 99.73 % of the Company’s total revenue, respectively.

revenue generated from Dongfang Paper and Tengsheng Paper for the six months ended June 30, 2023 and 2022 was accounted for 99.84 % and

99.70 % of the Company’s total revenue, respectively.Dongfang Paper and Tengsheng Paper also accounted for 91.04 % and 93.76 % of the

total assets of the Company as of June 30, 2023 and December 31, 2022, respectively.

Company has no direct equity interest in Dongfang Paper.

However, through the Contractual Agreements described above, the Company is

found to be the primary beneficiary (the “Primary Beneficiary”) of Dongfang Paper and is deemed to have the effective control

over Dongfang Paper’s activities that most significantly affect its economic performance, resulting in Dongfang Paper and its subsidiary,

being treated as a controlled variable interest entity of the Company in accordance with Topic 810 - Consolidation of the Accounting

Standards Codification (the “ASC”) issued by the Financial Accounting Standard Board (the “FASB”).

generated from Dongfang Paper and Tengsheng Paper for the three months ended September 30, 2023 and 2022 was accounted for 99.66 % and

99.83 % of the Company’s total revenue, respectively.

The revenue generated from Dongfang Paper and Tengsheng Paper for the nine

months ended September 30, 2023 and 2022 was accounted for 99.86 % and 99.75 % of the Company’s total revenue, respectively.

Paper and Tengsheng Paper also accounted for 90.71 % and 88.54 % of the total assets of the Company as of September 30, 2023 and December

31, 2022, respectively.

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of June 30, 2023 and December 31, 2022, details of the Company’s subsidiaries and variable interest entities are as follows:

of September 30, 2023 and December 31, 2022, details of the Company’s subsidiaries and variable interest entities are as follows:

Incorporation

Incorporation or

Percentage of

Establishment

Incorporation

Establishment

19 unchanged sentences

** Tengsheng Paper is 100 % subsidiary of Dongfang Paper.

*** Qianrong is a wholly owned subsidiary of ShengdeHolding.

uncertainties in the PRC legal system could cause the Company’s current ownership structure to be found to be in violation of any

17 unchanged sentences

assets and liabilities (after elimination of intercompany transactions and balances) in the Company’s condensed consolidated balance

sheets as of June 30, 2023 and December 31, 2022 are as follows:

sheets as of September 30, 2023 and December 31, 2022 are as follows:

Company and its consolidated subsidiaries are not required to provide financial support to the VIE, and no creditor (or beneficial interest

4 unchanged sentences

to statutory limits and restrictions, provide financial support to the VIE.

and bank balances

and other current assets

from related parties

Current Assets

on property, plant and equipment

lease right-of-use assets, net

plant, and equipment, net

Cash and bank balances

Restricted cash

Accounts receivable

Prepayments and other current assets

Due from related parties

Total current assets

Prepayment on property, plant and equipment

Operating lease right-of-use assets, net

Finance lease right-of-use assets, net

Property, plant, and equipment, net

Deferred tax asset non-current

$ 171,445,524

$ 181,011,814

portion of long-term loans

from customers

to related parties

payroll and employee benefits

payables and accrued liabilities

taxes payable

Current Liabilities

gain on sale-leaseback

liability - non-current

Short-term bank loans

Current portion of long-term loans

Lease liability

Accounts payable

Advance from customers

Due to related parties

Accrued payroll and employee benefits

Other payables and accrued liabilities

Income taxes payable

Total current liabilities

Long-term loans

Deferred gain on sale-leaseback

Lease liability - non-current

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation and Significant Accounting Policies

of Presentation and Significant Accounting Policies

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of

10 unchanged sentences

Such adjustments are of a normal recurring nature, unless otherwise

The balance sheet as of June 30, 2023 and the results of operations for the six months ended June 30, 2023 are not necessarily

indicative of the results to be expected for any future period.

The balance sheet as of September 30, 2023 and the results of operations for the nine months ended September 30, 2023 are not

necessarily indicative of the results to be expected for any future period.

unaudited condensed consolidated financial statements are prepared in accordance with GAAP.

22 unchanged sentences

are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

Value Measurements

Company has adopted ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring

19 unchanged sentences

Company could realize in a current market exchange.

As of June 30, 2023 and December 31, 2022, the carrying value of the Company’s

As of September 30, 2023 and December 31, 2022, the carrying value of the Company’s

short term financial instruments, such as cash and cash equivalents, accounts receivable, accounts and notes payable, short-term bank

28 unchanged sentences

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

( 3) Inventories

materials inventory includes mainly recycled paper board and recycled white scrap paper.

1 unchanged sentence

medium paper, offset printing paper and tissue paper products.

Inventories consisted of the following as of June 30, 2023 and December

Inventories consisted of the following as of September 30, 2023 and December

September 30,

Raw Materials

white scrap paper

paper and other raw materials

Recycled white scrap

Base paper and other

raw materials

Semi-finished Goods

1 unchanged sentence

Total inventory, gross

Total inventory,

Prepayments and other current assets

and other current assets consisted of the following as of June 30, 2023 and December 31, 2022:

Total inventory, net

(4) Prepayments

and other current assets

and other current assets consisted of the following as of September 30, 2023 and December 31, 2022:

September 30,

Prepaid land lease

Prepayment for purchase of

Prepayment for purchase of materials

Value-added tax recoverable

Property, plant and equipment, net

of June 30, 2023 and December 31, 2022, property, plant and equipment consisted of the following:

(5) Property,

plant and equipment, net

As of September

30, 2023 and December 31, 2022, property, plant and equipment consisted of the following:

September 30,

Property, Plant, and Equipment:

3 unchanged sentences

Construction in progress

accumulated depreciation and amortization

accumulated depreciation

and amortization

( 140,919,792 )

( 134,836,940 )

Property, Plant and Equipment, net

Property, Plant and Equipment,

$ 144,603,052

$ 151,569,898

of June 30, 2023 and December 31, 2022, land use rights represented twenty-three parcels of state-owned lands located in Xushui District

and Wei County of Hebei Province in China, with lease terms of 50 years expiring in 2061 and 2068, respectively.

of September 30, 2023 and December 31, 2022, land use rights represented twenty three parcels of state-owned lands located in Xushui

District and Wei County of Hebei Province in China, with lease terms of 50 years expiring in 2061 and 2068, respectively.

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of June 30, 2023 and December 31, 2022, certain property, plant and equipment of Dongfang Paper with net values of $ 59,048 and $ 280,466 ,

of September 30, 2023 and December 31, 2022, certain property, plant and equipment of Dongfang Paper with net values of $ 29,713 and $ 280,466 ,

respectively, have been pledged pursuant to a long-term loan from credit union of Dongfang Paper.

Land use right of Dongfang Paper with

net values of $ 4,098,523 and $ 4,301,204 , respectively, as of June 30, 2023 and December 31, 2022 was pledged for the bank loan from Industrial

& Commercial Bank of China (“ICBC”).

Land use right of Tengsheng Paper with net value of $4,869,528 and $5,111,014 , respectively,

as of June 30, 2023 and December 31, 2022 was pledged for a long-term loan from credit union of Baoding Shengde.

In addition, land use

right of Tengsheng Paper with net value of $ 3,756,342 and $ 3,948,953 , respectively, as of June 30, 2023 and December 31, 2022 was pledged

for another long-term loan from credit union of Baoding Shengde.

Land use right of Dongfang Paper with net value of $ 5,099,089 as of

June 30, 2023 was pledged for a long-term loan from credit union of Tengsheng Paper.

See “ Short-term bank loans ” under

Note (7), Loans Payable, for details of the transaction and asset collaterals.

An impairment loss of $ 375,136 was recognized for property, plant and

equipment of Baoding Shengde for the three and six months ended June 30, 2023.

and amortization of property, plant and equipment was $ 3,686,243 and $ 3,819,083 for the three months ended June 30, 2023 and 2022, respectively.

Depreciation and amortization of property, plant and equipment was $ 7,150,057 and $ 7,592,319 for the six months ended June 30, 2023 and

Land use right of Tengsheng Paper with

net value of $ 4,872,178 and $ 5,111,014 , respectively, as of September 30, 2023 and December 31, 2022 was pledged for a long-term loan

from credit union of Baoding Shengde.

In addition, land use right of Tengsheng Paper with net value of $ 3,755,317 and $ 3,948,953 , respectively,

as of September 30, 2023 and December 31, 2022 was pledged for another long-term loan from credit union of Baoding Shengde.

right of Dongfang Paper with net value of $ 5,098,721 as of September 30, 2023 was pledged for a long-term loan from credit union of Tengsheng

See “ Short-term bank loans ” under Note (7), Loans Payable, for details of the transaction and asset collaterals.

and amortization of property, plant and equipment was $ 3,423,231 and $ 3,609,985 for the three months ended September 30, 2023 and 2022,

respectively.

Depreciation and amortization of property, plant and equipment was $ 10,573,288 and $ 11,168,328 for the nine months ended

September 30, 2023 and 2022, respectively.

with Sale-Leaseback

2 unchanged sentences

Under the sale-leaseback

arrangement, Tengsheng Paper sold the Leased Equipment to TLCL for RMB 16 million (approximately US$ 2.5 million).

Concurrent with the

sale of equipment, Tengsheng Paper leases back the equipment sold to TLCL for a lease term of three years.

At the end of the lease term,

Tengsheng Paper may pay a nominal purchase price of RMB 100 (approximately US$ 16 ) to TLCL and buy back the Leased Equipment.

Equipment in amount of $ 2,349,452 was recorded as right of use assets and the net present value of the minimum lease payments was recorded

as lease liability and calculated with TLCL’s implicit interest rate of 15.6 % per annum and stated at $ 567,099 at the inception

of the lease on August 17, 2020.

arrangement, Tengsheng Paper sold the Leased Equipment to TLCL for 16 million (approximately US$ 2.5 million).

Concurrent with the sale

of equipment, Tengsheng Paper leases back the equipment sold to TLCL for a lease term of three years.

At the end of the lease term, Tengsheng

Paper may pay a nominal purchase price of RMB 100 (approximately $ 16 ) to TLCL and buy back the Leased Equipment.

The Leased Equipment

in amount of $ 2,349,452 was recorded as right of use assets and the net present value of the minimum lease payments was recorded as lease

liability and calculated with TLCL’s implicit interest rate of 15.6 % per annum and stated at $ 567,099 at the inception of the lease

on August 17, 2020.

Paper made payments due according to the schedule.

The balance of Leased Equipment net of amortization was $ 1,796,034 and $ 1,939,970

as of June 30, 2023 and December 31, 2022, respectively.

The lease liability was $ 18,854 and $ 131,772 , and its current portion in the

amount of $ 18,854 and $ 131,772 as of June 30, 2023 and December 31, 2022, respectively.

of the Leased Equipment was $ 37,661 and $ 39,972 for the three months ended June 30, 2023 and 2022.

Amortization of the Leased Equipment

was $ 76,526 and $ 81,978 for the six months ended June 30, 2023 and 2022.

Total interest expenses for the sale-leaseback arrangement was

$ 2,182 and $ 10,862 for the three months ended June 30, 2023 and 2022.

Total interest expenses for the sale-leaseback arrangement was

$ 6,671 and $ 24,369 for the six months ended June 30, 2023 and 2022.

a result of the sale and leaseback, a deferred gain in the amount of $ 430,695 was recorded.

The deferred gain is amortized over the lease

term and as an offset to amortization of the Leased Equipment.

future minimum lease payments of the capital lease as of June 30, 2023 were as follows:

unearned discount

Current portion lease liability

On July 17, 2023, the Company made a final payment on outstanding obligations and

bought back the Lease Equipment at nominal price according to the agreement.

The lease assets were reclassified as own assets and balance

of Leased Equipment net of amortization were $ nil and $ 1,939,970 as of September 30, 2023 and December 31, 2022, respectively.

Company leases space under non-cancelable operating leases for office and manufacturing locations.

12 unchanged sentences

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

components of the Company’s lease expense are as follows:

cash flow information related to its operating leases was as follows for the period ended June 30, 2023:

paid for amounts included in the measurement of lease liabilities:

cash outflow from operating leases

of its lease liabilities for all operating leases are as follows as of June 30, 2023:

Total operating lease payments

The components

of the Company’s lease expense are as follows:

Nine Months Ended

September 30,

Operating lease cost

Short-term lease cost

cash flow information related to its operating leases was as follows for the period ended September 30, 2023:

Nine Months Ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflow from operating leases

of its lease liabilities for all operating leases are as follows as of September 30, 2023:

Total operating lease

Present value of lease liabilities

2 unchanged sentences

Present value of lease liabilities

weighted average remaining lease terms and discount rates for all of its operating leases were as follows as of June 30, 2023:

lease term and discount rate:

average remaining lease term (years)

average discount rate

Loans Payable

and Commercial Bank of China (“ICBC”) Loan 1

Construction Bank Loan

short-term bank loans

weighted average remaining lease terms and discount rates for all of its operating leases were as follows as of September 30, 2023:

September 30,

Remaining lease term and discount rate:

Weighted average remaining lease

Weighted average discount rate

September 30,

Industrial and Commercial Bank

of China (“ICBC”) Loan 1

China Construction Bank Loan

Total short-term bank loans

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

November 10, 2022, the Company entered into a working capital loan agreement with the ICBC, with a balance of $ 4,773,174 and $ 5,023,978

as of June 30, 2023 and December 31, 2022, respectively.

The working capital loan was secured by the land use right of Dongfang Paper

as collateral for the benefit of the bank and guaranteed by Mr.

The loan bears a fixed interest rate of 4.785 % per annum.

repaid $ 71,743 in May 2023 and the balance of the loan will be due by November 13, 2023.

November 10, 2022, the Company entered into a working capital loan agreement with the ICBC.

The loan was secured by the land use right

of Dongfang Paper as collateral for the benefit of the bank and guaranteed by Mr.

The loan bore a fixed interest rate of 4.785 %

The Company repaid $ 71,743 in May 2023 and paid off the remaining balance of the loan in August 2023.

The balance of the loan

was $ nil and $ 5,023,978 as of September 30, 2023 and December 31, 2022, respectively.

November 30, 2022, the Company entered into a working capital loan agreement with the ICBC, with a balance of $ nil and $ 287,167 as of

June 30, 2023 and December 31, 2022, respectively.

September 30, 2023 and December 31, 2022, respectively.

The loan bore an interest rate of 4.25 % per annum.

The loan was repaid in May 2023.

The loan was fully repaid

November 30, 2022, the Company entered into a working capital loan agreement with the ICBC, with a balance of $ nil and $ 143,583 as of

June 30, 2023 and December 31, 2022, respectively.

September 30, 2023 and December 31, 2022, respectively.

The loan bore an interest rate of 4.25 % per annum.

The loan was repaid in May 2023.

May 29, 2023, the Company entered into a working capital loan agreement with the ICBC, with a balance of $ 415,179 as of June 30, 2023.

The loan was fully repaid

May 29, 2023, the Company entered into a working capital loan agreement with the ICBC, with a balance of $ 417,839 as of September 30,

The loan bears a fixed interest rate of 4.25 % per annum.

The loan will be due by November 25, 2023 .

July 29, 2022, the Company entered into a working capital loan agreement with the China Construction Bank, with a balance of $ 138,393

and $ 143,583 as of June 30, 2023 and December 31, 2022, respectively.

The loan bears a fixed interest rate of 3.95 % per annum.

will be due by July 29, 2023.

June 29, 2023, the Company entered into a working capital loan agreement with the ICBC, with a balance of $ 415,179 as of June 30, 2023.

July 29, 2022, the Company entered into a working capital loan agreement with the China Construction Bank, with a balance of $ nil and

$ 143,583 as of September 30, 2023 and December 31, 2022, respectively.

The loan bore a fixed interest rate of 3.95 % per annum.

was fully repaid in July 2023.

June 29, 2023, the Company entered into a working capital loan agreement with the ICBC, with a balance of $ 417,839 as of September 30,

The loan bears a fixed interest rate of 3.55 % per annum.

The loan will be due by June 28, 2024 .

of June 30, 2023, there were guaranteed short-term borrowings of $ 4,773,174 and unsecured bank loans of $ 968,751 .

of September 30, 2023, there were guaranteed short-term borrowings of $ nil and unsecured bank loans of $ 968,751 .

As of December 31, 2022,

there were guaranteed short-term borrowings of $ 5,023,978 and unsecured bank loans of $ 574,333 .

average short-term borrowing rates for the three months ended June 30, 2023 and 2022 were approximately 4.83 % and 4.79 %.

short-term borrowing rates for the six months ended June 30, 2023 and 2022 were approximately 4.77 % and 4.79 %.

of June 30, 2023 and December 31, 2022, long-term loans were $ 11,198,760 and $ 9,040,002 , respectively.

average short-term borrowing rates for the three months ended September 30, 2023 and 2022 were approximately 4.52 % and 4.28 %.

short-term borrowing rates for the nine months ended September 30, 2023 and 2022 were approximately 4.66 % and 4.6 %.

of September 30, 2023 and December 31, 2022, long-term loans were $ 11,270,053 and $ 9,040,002 , respectively.

September 30,

Rural Credit Union of Xushui District

7 unchanged sentences

( 4,835,884 )

of June 30, 2023, the Company’s long-term debt repayments for the next coming years were as follows:

As of September

30, 2023, the Company’s long-term debt repayments for the next coming years were as follows:

Remainder of 2023

April 16, 2014, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 5 years, which

was originally duein various installments from June 21, 2014 to November 18, 2018.

was originally due in various installments from June 21, 2014 to November 18, 2018.

The loan is guaranteed by an independent third party.

Interest payment is duequarterly and bore a rate of 7.68 % per annum.

Effective from November 15, 2022, the interest rate is reduced to

7 % per annum.

On November 6, 2018, the loan was renewed for additional 5 years and will be due and payable in various installments from

December 21, 2018 to November 5, 2023.

As of June 30, 2023 and December 31, 2022, total outstanding loan balance was $ 1,190,180 and$ 1,234,816 ,

respectively, which are presented as current liabilities in the consolidated balance sheet.

Interest payment is due quarterly and bore a rate of 7.68 % per annum.

Effective from November 15, 2022, the interest rate was reduced

to 7 % per annum.

On November 6, 2018, the loan was renewed for additional 5 years and will be due and payable in various installments

from December 21, 2018 to November 5, 2023.

As of September 30, 2023 and December 31, 2022, total outstanding loan balance was $ 1,197,805

and $ 1,234,816 , respectively, which are presented as current liabilities in the consolidated balance sheet.

TECH PACKAGING, INC.

3 unchanged sentences

On June 21, 2018, the loan was extended

for additional 5 years andwas due and payable in various installments from December 21, 2018 to June 20, 2023.

On June 19, 2023, the loan

was extended for another 5 years and will be due and payable on June 20, 2028.The loan is secured by certain of the Company’s manufacturing

equipment with net book value of $ 59,048 and $ 280,466 as of June 30, 2023 and December 31, 2022, respectively.

Interest payment is due

quarterly and bore arate of 7.68 % per annum.

Effective from November 15, 2022, the interest rate is reduced to 7 % per annum.

30, 2023 and December 31, 2022, the total outstanding loan balance was $ 3,459,824 and $ 3,589,582 , respectively, which are presented as

non-current liabilities and current liabilities in the consolidated balance sheet, respectively.

for additional 5 years and was due and payable in various installments from December 21, 2018 to June 20, 2023.

On June 19, 2023, the

loan was extended for another 5 years and will be due and payable on June 20, 2028.

The loan is secured by certain of the Company’s

manufacturing equipment with net book value of $ 29,713 and $ 280,466 as of September 30, 2023 and December 31, 2022, respectively.

payment is due quarterly and bore a rate of 7.68 % per annum.

Effective from November 15, 2022, the interest rate was reduced to 7 % per

As of September 30, 2023 and December 31, 2022, the total outstanding loan balance was $ 3,481,536 and $ 3,589,582 , which are presented

as non-current liabilities and current liabilities in the consolidated balance sheet as of September 30, 2023 and December 31, 2022,

respectively.

April 17, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which

5 unchanged sentences

and bore a rate of 7.68 % per annum.

Effective from November 15, 2022, the interest rate is reduced to 7 % per annum.

As of June 30, 2023

and December 31, 2022, the total outstanding loan balance was $ 2,214,288 and $ 2,297,332 , respectively, which are presented as current

liabilities and non-current liabilities in the consolidated balance sheet as of June 30, 2023 and December 31, 2022, respectively.

December 12, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which

is due and payable in various installments from June 21, 2020 to December 11, 2021.

The loan was renewed on March 22, 2021 and December

24, 2021 and extended for additional 3 years in total, which will be due on December 11, 2024 according to the new schedule.

is secured by Tengsheng Paper with its land use right as collateral for the benefit of the credit union.

Interest payment is due monthly

and bore a rate of 7.56 % per annum.

Effective from November 15, 2022, the interest rate is reduced to 7 % per annum.

As of June 30, 2023

and December 31, 2022, the total outstanding loan balance was $ 1,799,109 and $ 1,866,582 , respectively, which are presented as non-current

liabilities in the consolidated balance sheet as of June 30, 2023 and December 31, 2022, respectively.

Effective from November 15, 2022, the interest rate was reduced to 7 % per annum.

As of September

30, 2023 and December 31, 2022, the total outstanding loan balance was $ 2,228,474 and $ 2,297,332 , respectively, which are presented as

current liabilities and non-current liabilities in the consolidated balance sheet as of September 30, 2023 and December 31, 2022, respectively.

December 12, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years,

which is due and payable in various installments from June 21, 2020 to December 11, 2021.

The loan was renewed on March 22, 2021 and

December 24, 2021 and extended for additional 3 years in total, which will be due on December 11, 2024 according to the new

The loan is secured by Tengsheng Paper with its land use right as collateral for the benefit of the credit union.

payment is due monthly and bore a rate of 7.56 % per annum.

Effective from November 15, 2022, the interest rate was reduced to 7 % per

As of September 30, 2023 and December 31, 2022, the total outstanding loan balance was $ 1,810,635 and $ 1,866,582 ,

respectively, which are presented as non-current liabilities in the consolidated balance sheet as of September 30, 2023 and December

31, 2022, respectively.

February 26, 2023, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which

3 unchanged sentences

Interest payment is due monthly and bore a rate of 7 % per annum.

of June 30, 2023, the total outstanding loan balance was $ 2,491,073 .

Out of the total outstanding loan balance, current portion amounted

was $ 345,982 , which is presented as current liabilities in the consolidated balance sheet and the remaining balance of $ 2,145,092 is

presented as non-current liabilities in the consolidated balance sheet as of June 30, 2023.

of September 30, 2023, the total outstanding loan balance was $ 2,507,034 .

Out of the total outstanding loan balance, current portion

amounted was $ 1,267,445 , which is presented as current liabilities in the consolidated balance sheet and the remaining balance of $ 1,239,589

is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2023.

July 1, 2022, the Company entered into a loan agreement with Jiangna Yu, a customer of the Company, pursuant to which the Company borrowed

RMB 400,000 (approximately US$ 55,357 ) from Jiangna Yu for a term of five years.

The loan is payable in monthly installment of RMB 10,667

(approximately US$ 1,531 ) from July 2022 to July 2027.

As of June 30, 2023 and December 31, 2022, the total outstanding loan balance was

RMB 400,000 from Jiangna Yu for a term of five years.

The loan is payable in monthly installment of RMB 10,667 from July 2022 to July

As of September 30, 2023 and December 31, 2022, the total outstanding loan balance was $ 44,569 and $ 51,690 , respectively.

the total outstanding loan balance, current portion amounted $ 11,072 and $ 13,928 , respectively, which are presented as current liabilities

and the remaining balance of $ 30,641 and $ 40,204 are presented as non-current liabilities in the consolidated balance sheet as of September

30, 2023 and December 31, 2022, respectively.

interest expenses for the short-term bank loans and long-term loans for the three months ended September 30, 2023 and 2022 were $ 247,628

and $ 248,239 , respectively.

Out of the total outstanding loan balance, current portion amounted were $ 11,072 and $ 11,486 , which

are presented as current liabilities and the remaining balance of $ 33,214 and $ 40,204 are presented as non-current liabilities in the

consolidated balance sheet as of June 30, 2023 and December 31, 2022, respectively.

interest expenses for the short-term bank loans and long-term loans for the three months ended June 30, 2023 and 2022 were $ 268,499 and

$ 248,244 , respectively.

Total interest expenses for the short-term bank loans and long-term loans for the six months ended June 30, 2023

Total interest expenses for the short-term bank loans and long-term loans for the nine months ended September

30, 2023 and 2022 were $ 760,807 and $ 753,789 , respectively.

Related Party Transactions

Party Transactions

Zhenyong Liu, the Company’s CEO has loaned money to Dongfang Paper for working capital purposes over a period of time.

6 unchanged sentences

Zhenyong Liu, which

were recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of June

were recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of September

30, 2023 and December 31, 2022, respectively.

9 unchanged sentences

with interest of $ 20,400 .

As of June 30, 2023 and December 31, 2022, approximately $ 41,518 and $ 43,075 of interest, respectively were

outstanding to Mr.

Zhenyong Liu, which was recorded in other payables and accrued liabilities as part of the current liabilities in the

consolidated balance sheet.

As of September 30, 2023 and December 31, 2022, approximately $ 41,784 and $ 43,075 of interest, respectively

were outstanding to Mr.

Zhenyong Liu, which was recorded in other payables and accrued liabilities as part of the current liabilities

in the consolidated balance sheet.

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 1, 2015, the Company entered an agreement with Mr.

Zhenyong Liu which allows Dongfang Paper to borrow from Mr.

Zhengyong Liu an

amount up to $ 17,201,342 (RMB 120,000,000 ) for working capital purposes.

The advances or funding under the agreement are due three years

from the date each amount is funded.

The loan is unsecured and carries an annual interest rate set on the basis of the primary lending

rate of the People’s Bank of China at the time of the borrowing.

On July 13, 2015, an unsecured amount of $ 4,324,636 was drawn

from the facility.

Zhenyong Liu which allows Dongfang Paper to borrow from the CEO an amount up

to $ 17,201,342 (RMB 120,000,000 ) for working capital purposes.

The advances or funding under the agreement are due three years from the

date each amount is funded.

The loan is unsecured and carries an annual interest rate set on the basis of the primary lending rate of

the People’s Bank of China at the time of the borrowing.

On July 13, 2015, an unsecured amount of $ 4,324,636 was drawn from the

On October 14, 2016 an unsecured amount of $ 2,883,091 was drawn from the facility.

In February 2018, the company repaid $ 1,507,432

$ 1,507,432 to Mr.

Zhenyong Liu.

The loan would be originally due on July 12, 2018 .

Zhenyong Liu agreed to extend the loan for additional

3 years and the remaining balance was due on July 12, 2021.

Zhenyong Liu agreed to extend the loan for additional 3 years

and the remaining balance was due on July 12, 2021.

On November 23, 2018, the Company repaid $ 3,768,579 to Mr.

Zhenyong Liu,

together with interest of $ 158,651 .

Zhenyong Liu, together

with interest of $ 158,651 .

In December 2019, the Company paid off the remaining balance, together with interest of 94,636 .

of June 30, 2023 and December 31, 2022, the outstanding interest was $ 190,204 and $ 197,338 , respectively, which was recorded in other

payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of June 30, 2023 and December 31, 2022, total amount of loans due to Mr.

As of September

30, 2023 and December 31, 2022, the outstanding interest was $ 191,422 and $ 197,338 , respectively, which was recorded in other payables

and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

of September 30, 2023 and December 31, 2022, total amount of loans due to Mr.

Zhenyong Liu were $ nil .

The interest expense incurred for such

related party loans were $ nil for the three and six months ended June 30, 2023 and 2022.

The interest expense incurred for

such related party loans were $ nil for the three and nine months ended September 30, 2023 and 2022.

The accrued interest owing to Mr.

was approximately $ 586,470 and $ 608,465 as of June 30, 2023 and December 31, 2022, respectively, which was recorded in other payables

and accrued liabilities.

Zhenyong Liu was approximately $ 590,227 and $ 608,465 , as of September 30, 2023 and December 31, 2022, respectively, which was recorded

in other payables and accrued liabilities.

December 8, 2021, the Company entered into an agreement with Mr.

8 unchanged sentences

Zhenyong Liu to borrow

from theCompany an amount of $ 7,276,220 (RMB 50,000,000 ) in total.

from the Company an amount of $ 6,963,982 (RMB 50,000,000 ) in total.

The loans were unsecured and carried a fixed interest rate of 4.35 %

The loan will be repaid by the end of August 2023.

Interest income of the loan for the six months ended June 30, 2023 was

of June 30, 2023 and December 31, 2022, amount due to shareholder was $ 727,433 , which represents funds from shareholders to pay for various

expenses incurred in the U.S.

$ 4,264,938 (RMB 30,000,000 ) was repaid by Mr.

Zhengyong Liu in August 2023.

The remaining balance is expected to be repaid

by the end of November 2023.

Interest income of the loan for the nine months ended September 30, 2023 was $ 263,342 .

of September 30, 2023 and December 31, 2022, amount due to shareholders was $ 727,433 , which represents funds from shareholders to pay

for various expenses incurred in the U.S.

The amount is due on demand with interest free.

1 unchanged sentence

payables and accrued liabilities consist of the following:

interest to a related party

for purchase of equipment

commission to salesmen

bank loan interest

Derivative Liabilities

September 30,

Accrued electricity

Accrued rental

Value-added tax payable

Accrued interest to a related party

Payable for purchase of equipment

Accrued commission to salesmen

Accrued bank loan interest

(10) Derivative

Company analyzed the warrant for derivative accounting consideration under ASC 815, “Derivatives and Hedging, and hedging,”

3 unchanged sentences

the fair market value as other income or expense item.

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company determined its derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate

the fair value as of June 30, 2023.

the fair value as of September 30, 2023.

The Black-Scholes model requires six basic data inputs:

the exercise or strike price, time to expiration,

the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate.

the exercise or strike price, time to

expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the

dividend rate.

Changes to these inputs could produce a significantly higher or lower fair value measurement.

The fair value of each warrant is estimated

using the Black-Scholes valuation model.

The following weighted-average assumptions were used in the June 30, 2023:

average volatility

dividend yield

interest rate

The fair value of each warrant

is estimated using the Black-Scholes valuation model.

The following weighted-average assumptions were used in the September 30, 2023:

September 30,

Expected term

Expected average volatility

Expected dividend yield

Risk-free interest rate

0.19 % - 4.8 %

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2023:

following table summarizes the changes in the derivative liabilities during the nine months ended September 30, 2023:

Value Measurements Using Significant Observable Inputs (Level 3)

Balance at December 31, 2022

Addition of new derivatives

recognized as warrant

Addition of new derivatives

recognized as loss on derivatives

Addition of new derivatives recognized as warrant

Addition of new derivatives recognized as loss

on derivatives

Exercise of warrants

Change in fair value of derivative

Balance at June 30, 2023

Change in fair value

of derivative liability

Balance at September,

of common stock to investors

11 unchanged sentences

was $ 7.5 per share.

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 9, 2022, the Board of Directors of the Company approved the Reverse Stock Split, at a ratio of 1-for-10 , pursuant to Section 78.207

12 unchanged sentences

of the stock was calculated at $ 156,000 as of the date of grant.

(12) Warrants

April 29, 2020, the Company and certain institutional investors entered into a securities purchase agreement, as amended on May 4, 2020

5 unchanged sentences

88,000 May 2020 Warrants

were exercised in February 2021 at the exercise price of $7.425 per share and 352,000 May 2020 Warrants were outstanding as of June 30,

The Company classified warrant as liabilities and accounted for the issuance of the May 2020 Warrants as a derivative.

were exercised in February 2021 at the exercise price of $ 7.425 per share and 352,000 May 2020 Warrants were outstanding as of September

January 20, 2021, the Company offered and sold to certain institutional investors an aggregate of 2,618,182 shares of common stock and

5 unchanged sentences

1,207,492 January 2021 Warrants were outstanding

as of June 30, 2023.

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

as of September 30, 2023.

March 1, 2021, the Company offered and sold to the public investors an aggregate of 2,927,786 shares of common stock and 1,463,893 warrants

3 unchanged sentences

6,750 March 2021 Warrants were exercised in January and

March 2021 at the exercise price of $7.5 per share and 1,457,143 March 2021 Warrants were outstanding as of June 30, 2023.

Company classified warrants as liabilities and accounted for the issuance of the warrants as a derivative.

summary of stock warrant activities is as below:

June 30, 2023

March 2021 at the exercise price of $ 7.5 per share and 1,457,143 March 2021 Warrants were outstanding as of September 30, 2023.

classified warrants as liabilities and accounted for the issuance of the warrants as a derivative.

of stock warrant activities is as below:

Outstanding and exercisable at

1 unchanged sentence

Issued during the period

Exercised during the period

Outstanding and exercisable at end of the period

following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2023.

Exercised during the

Outstanding and exercisable

at end of the period

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following

table summarizes information relating to outstanding and exercisable warrants as of September 30, 2023.

Average Remaining

3 unchanged sentences

intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of

the warrants at June 30, 2023 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money”

The intrinsic value of the warrants as of June 30, 2023 and December 31, 2022 are nil.

Earnings Per Share

the three months ended June 30, 2023 and 2022, basic and diluted net income per share are calculated as follows:

Three Months Ended

the warrants at September 30, 2023 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money”

The intrinsic value of the warrants as of September 30, 2023 and December 31, 2022 are nil .

(13) Earnings

For the three

months ended September 30, 2023 and 2022, basic and diluted net income per share are calculated as follows:

September 30,

Basic loss per share

Net loss for the period - numerator

for the period - numerator

$ ( 1,975,368 )

$ ( 1,887,318 )

Weighted average common stock outstanding - denominator

Weighted average common

stock outstanding - denominator

Net loss per share

Diluted income per share

Net income for the period- numerator

Net income for the period-

$ ( 1,975,368 )

$ ( 1,887,318 )

Weighted average common stock outstanding - denominator

Weighted average common

stock outstanding - denominator

Effect of dilution

Weighted average common stock outstanding - denominator

Weighted average common

stock outstanding - denominator

Diluted loss per share

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30,

September 30,

Basic loss per share

Net loss for the period - numerator

for the period - numerator

$ ( 5,962,026 )

$ ( 4,663,445 )

Weighted average common stock outstanding - denominator

Weighted average common

stock outstanding - denominator

Net loss per share

Diluted loss per share

Net loss for the period - numerator

Net loss for the period

$ ( 5,962,026 )

$ ( 4,663,445 )

Weighted average common stock outstanding - denominator

Weighted average common

stock outstanding - denominator

Effect of dilution

Weighted average common stock outstanding - denominator

Weighted average common

stock outstanding - denominator

Diluted loss per share

the three andsix months ended June 30, 2023 and 2022 there were no securities with dilutive effect issued and outstanding.

For the three

and nine months ended September 30, 2023 and 2022 there were no securities with dilutive effect issued and outstanding.

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company may be subject to the United States of America Tax laws at a tax rate of 21 %.

No provision for the US federal income taxes

has been made as the Company had no US taxable income for the six months ended June 30, 2023 and 2022, and management believes that its

earnings are permanently invested in the PRC.

has been made as the Company had no US taxable income for the nine months ended September 30, 2023 and 2022, and management believes

that its earnings are permanently invested in the PRC.

Paper and Baoding Shengde are PRC operating companies and are subject to PRC Enterprise Income Tax.

1 unchanged sentence

Income Tax Law, Enterprise Income Tax is generally imposed at a statutory rate of 25 %.

provisions for income taxes for three months ended June 30, 2023 and 2022 were as follows:

for Income Taxes

Tax Provision U.S.

Tax Provision PRC

The provisions

for income taxes for three months ended September 30, 2023 and 2022 were as follows:

Provision for Income Taxes

Current Tax Provision U.S.

Current Tax Provision PRC

Deferred Tax Provision

Provision for (Deferred tax benefit)/ Income Taxes

The provisions

for income taxes for nine months ended September 30, 2023 and 2022 were as follows:

Provision for Income Taxes

Current Tax Provision U.S.

Current Tax Provision PRC

Deferred Tax Provision

( 1,197,630 )

provisions for income taxes for six months ended June 30, 2023 and 2022 were as follows:

for Income Taxes

Tax Provision U.S.

Tax Provision PRC

Provision for (Deferred tax benefit)/ Income Taxes

9 unchanged sentences

utilized, during the period of 2030 through 2035.

As of June 30, 2023, management believed that the realization of all the U.S.

tax benefits from these losses, which generally would generate a deferred tax asset if it can be expected to be utilized in the future,

appears not more than likely due to the Company’s limited operating history and continuing losses for United States income tax

Accordingly, As of June 30, 2023 and December 31, 2022, the Company provided a 100 % valuation allowance on the U.S.

tax asset benefit to reduce the total deferred tax asset to the amount realizable for the PRC income tax purposes.

Management reviews

this valuation allowance periodically and will make adjustments as warranted.

A summary of the otherwise deductible (or taxable) deferred

tax items is as follows:

As of September 30, 2023, management believed that the realization of all the U.S.

income tax benefits from these losses, which generally would generate a deferred tax asset if it can be expected to be utilized in the

future, appears not more than likely due to the Company’s limited operating history and continuing losses for United States income

tax purposes.

Accordingly, As of September 30, 2023 and December 31, 2022, the Company provided a 100 % valuation allowance on the U.S.

deferred tax asset benefit to reduce the total deferred tax asset to the amount realizable for the PRC income tax purposes.

reviews this valuation allowance periodically and will make adjustments as warranted.

A summary of the otherwise deductible (or taxable)

deferred tax items is as follows:

September 30,

Deferred tax assets (liabilities)

Depreciation and amortization of property, plant and equipment

Depreciation and amortization of

property, plant and equipment

Impairment of property, plant and equipment

Miscellaneous

Net operating loss carryover of PRC company

Net operating loss carryover

of PRC company

Total deferred tax assets

2 unchanged sentences

( 17,100,100 )

Total deferred tax assets, net

Three Months Ended

PRC Statutory rate

Total deferred tax assets,

PRC Statutory

Effect of tax and book difference

1 unchanged sentence

Effective income tax rate

Six Months Ended

PRC Statutory rate

PRC Statutory

Effect of tax and book difference

1 unchanged sentence

Effective income tax rate

During the three months ended June 30, 2023 and

2022, the effective income tax rate was estimated by the Company to be - 38.9 % and 45.9 %, respectively.

During the six months ended June 30, 2023 and

2022, the effective income tax rate was estimated by the Company to be - 9.7 % and 17.6 %, respectively.

of June 30, 2023, except for the one-time transition tax under the 2017 TCJA which imposes a U.S.

the three months ended September 30, 2023 and 2022, the effective income tax rate was estimated by the Company to be 0.2 % and - 29.7 %,

respectively.

the nine months ended September 30, 2023 and 2022, the effective income tax rate was estimated by the Company to be - 6.2 % and 3.3 %, respectively.

of September 30, 2023, except for the one-time transition tax under the 2017 TCJA which imposes a U.S.

tax liability on all unrepatriated

22 unchanged sentences

for any given quarterly or annual period based, in part, upon the results of operations for the given period.

As of June 30, 2023 and

December 31, 2022, management considered that the Company had no uncertain tax positions affecting its consolidated financial position

As of September 30, 2023

and December 31, 2022, management considered that the Company had no uncertain tax positions affecting its consolidated financial position

and results of operations or cash flows, and will continue to evaluate for any uncertain position in future.

There are no estimated interest

costs and penalties provided in the Company’s consolidated financial statements for the three and six months ended June 30, 2023

costs and penalties provided in the Company’s consolidated financial statements for the three and nine months ended September 30,

2023 and 2022, respectively.

The Company’s tax positions related to open tax years are subject to examination by the relevant tax authorities

and the major one is the China Tax Authority.

Stock Incentive Plans

Incentive Stock Plan

The Company’s tax positions related to open tax years are subject to examination by the relevant tax

authorities and the major one is the China Tax Authority.

Incentive Plans

2021 Incentive

November 12, 2021, the Company’s Annual General Meeting adopted and approved the 2021 Omnibus Equity Incentive Plan of IT Tech

4 unchanged sentences

Total fair value of the stock was calculated at $ 156,000 as of the date of grant.

Commitments and Contingencies

(16) Commitments

and Contingencies

Company leases 32.95 acres of land from a local government in Xushui District, Baoding City, Hebei, China through a real estate lease

2 unchanged sentences

This lease is renewable at the end of the 30-year term.

of Headquarters Compound Real Properties

Headquarters Compound Real Properties

August 7, 2013, the Company’s Audit Committee and the Board of Directors approved the sale of the land use right of the Headquarters

7 unchanged sentences

The lease was recorded in lease assets and liabilities

in the consolidated balance sheet as of June 30, 2023.

in the consolidated balance sheet as of September 30, 2023.

See ‘ Operating lease’ under note (6).

minimum lease payments of the land lease is as follows:

operating lease payments

Total operating lease

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of June 30, 2023, the Company has entered into several contracts for the purchase of paper machine of a new tissue paper production line

PM10, and the improvement of Industrial Buildings.

of September 30, 2023, the Company has entered into several contracts for the purchase of paper machine of a new tissue paper production

line PM10, and the improvement of Industrial Buildings.

Total outstanding commitments under these contracts were $ 3,815,502 and $ 4,329,279

as of June 30, 2023 and December 31, 2022, respectively.

as of September 30, 2023 and December 31, 2022, respectively.

The Company expected to pay off all the balances within 1 - 3 years.

1 unchanged sentence

Company agreed with Baoding Huanrun Trading Co., a major supplier of raw materials, to guarantee certain obligations of this third party,

and as of June 30, 2023 and December 31, 2022, the Company guaranteed its long-term loan from financial institutions amounting to $ 4,290,182

and as of September 30, 2023 and December 31, 2022, the Company guaranteed its long-term loan from financial institutions amounting to

$ 4,317,669 (RMB 31,000,000 ), that matured at various times in 2028.

If Huanrun Trading Co., were to become insolvent, the Company could be materially

adversely affected.

Segment Reporting

If Huanrun Trading Co., were to become insolvent, the Company could

be materially adversely affected.

March 10, 2010, Baoding Shengde started its operations and thereafter the Company manages its operations through three business operating

12 unchanged sentences

financial information for the three reportable segments is as follows:

Three Months Ended

June 30, 2023

Not Attributable

2 unchanged sentences

Inter-segment

Depreciation and amortization

Loss on impairment of assets

Interest income

Interest expense

Income tax expense(benefit)

Net income (loss)

and amortization

on impairment of assets

tax expense(benefit)

income (loss)

( 2,114,896 )

2 unchanged sentences

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Inter-segment

Not Attributable

Enterprise-wide,

Inter-segment

and amortization

2 unchanged sentences

( 1,871,128 )

Six Months Ended

June 30, 2023

( 2,101,863 )

( 1,887,318 )

Not Attributable

Enterprise-wide,

of Inter-segment

Inter-segment

( 2,157,381 )

Depreciation and amortization

Loss on impairment of assets

Interest income

Interest expense

Income tax expense(benefit)

Net income (loss)

and amortization

on impairment of assets

tax expense(benefit)

income (loss)

( 5,522,885 )

( 5,962,026 )

of Inter-segment

Not Attributable

Enterprise-wide,

Inter-segment

( 2,135,819 )

1 unchanged sentence

tax expense(benefit)

( 1,128,442 )

income (loss)

1 unchanged sentence

( 4,663,445 )

of June 30, 2023

of Inter-segment

of September 30, 2023

Not Attributable

Enterprise-wide,

Inter-segment

of December 31, 2022

of Inter-segment

Not Attributable

Enterprise-wide,

Inter-segment

TECH PACKAGING, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Concentration and Major Customers and Suppliers

the three months ended June 30, 2023 and 2022, the Company had no single customer contributed over 10 % of total sales.

the six months ended June 30, 2023 and 2022, the Company had no single customer contributed over 10 % of total sales.

the three months ended June 30, 2023, the Company had three major suppliers accounted for 74 %, 16 % and 6 % of total purchases.

three months ended June 30, 2022, the Company had three major suppliers accounted for 77 %, 16 % and 5 % of total purchases.

the six months ended June 30, 2023, the Company had three major suppliers accounted for 67 %, 13 % and 10 %of total purchases.

months ended June 30, 2022, the Company had three major suppliers accounted for 77 %, 15 % and 5 % of total purchases.

Concentration of Credit Risk

(18) Concentration

and Major Customers and Suppliers

the three months ended September 30, 2023, the Company had no single customer contributed over 10 % of total sales.

For the three months

ended September 30, 2022, the Company had five customers accounted for approximately 12 % of total sales.

the nine months ended September 30, 2023 and 2022, the Company had no single customer contributed over 10 % of total sales.

the three months ended September 30, 2023, the Company had three major suppliers accounted for 71 %, 18 % and 7 % of total purchases.

the three months ended September 30, 2022, the Company had three major suppliers accounted for 77 %, 14 % and 7 % of total purchases.

the nine months ended September 30, 2023, the Company had three major suppliers accounted for 75 %, 16 % and 6 % of total purchases.

the nine months ended September 30, 2022, the Company had three major suppliers accounted for 77 %, 15 % and 5 % of total purchases.

(19) Concentration

of Credit Risk

instruments for which the Company is potentially subject to concentration of credit risk consist principally of cash.

4 unchanged sentences

similar to the protection provided by the Federal Deposit Insurance Corporation (“FDIC”) of the United States as of as of

June 30, 2023 and December 31, 2022.

On May 1, 2015, the new “Deposit Insurance Regulations” was effective in the PRC that

the maximum protection would be up to RMB 500,000 ($ 69,196 ) per depositor per insured financial intuition, including both principal and

September 30, 2023 and December 31, 2022.

On May 1, 2015, the new “Deposit Insurance Regulations” was effective in the PRC

that the maximum protection would be up to RMB 500,000 ($ 69,640 ) per depositor per insured financial intuition, including both principal

and interest.

For the cash placed in financial institutions in the United States, the Company’s U.S.

bank accounts are all fully covered

by the FDIC insurance as of June 30, 2023 and December 31, 2022, while for the cash placed in financial institutions in the PRC, the

balances exceeding the maximum coverage of RMB 500,000 amounted to RMB 77,162,745 ($ 10,678,782 ) as of June 30, 2023.

Risks and Uncertainties

bank accounts are all fully

covered by the FDIC insurance as of September 30, 2023 and December 31, 2022, while for the cash placed in financial institutions in

the PRC, the balances exceeding the maximum coverage of RMB 500,000 amounted to RMB 57,984,303 ($ 8,076,033 ) as of September 30, 2023.

and Uncertainties

Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other

1 unchanged sentence

operating in the PRC under its various laws and restrictions.

Recent Accounting Pronouncements

Accounting Pronouncements

October 2021, the FASB issued ASU No.

8 unchanged sentences

The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

Subsequent Event

(22) Subsequent

2023 Incentive

October31, 2023, the Company’s Annual General Meeting adopted and approved the 2023 Omnibus Equity Incentive Plan of IT Tech Packaging,

Inc.(the”2023 Plan”).

Under the 2023 ISP, the Company has reserved a total of 1,500,000 shares of common stock for issuance

as or under awards to be made to the directors, officers, employees and/or consultants of the Company and its subsidiaries.

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-Q

Item 1. Financial Statements