What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-03-27 compared with 2023-03-24 · 499 added, 335 removed, 1217 unchanged (41% of the section changed)

4 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

The Board of Directors and Stockholders

IT Tech Packaging, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of IT

Tech Packaging, Inc.

(the Company) as of December 31, 2023, and 2022, and the related consolidated statements of income (loss) and comprehensive

income (loss), changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2023,

and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and the results of its operations and

its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally

accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public

accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent

with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit

of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control

over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control

over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from

the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) related to the accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

The communication of the critical audit matter does not alter in anyway our opinion on the financial

statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical

audit matters or on the accounts or disclosures to which they relate.

The principal considerations in determining that this was a critical

audit matter was that the Company had a significant accumulated balance and the carrying value of such assets are subject to estimation,

judgment, and complex calculations.

The balance resulted from temporary differences in taxes dues as the result of the difference in timing

of recognition of expenses that are required under generally accepted accounting principles, but may require deferral under local tax

The Company’s consolidated financial statements include entities in multiple jurisdictions with varying tax laws.

circumstances lead to estimation and interpretation that may be challenging to assess and evaluate as part of the audit.

The audit engagement

team addressed this critical accounting matter by reviewing the Company’s accounting policies, perform extended audit procedures

including examination of relevant local tax laws, testing for arithmetical accuracy of the asset, review of the Company’s assumptions

and estimates concerning future profitability, and independent recalculation of the future tax asset.

The engagement team was satisfied

with the evidence accumulated to support our audit opinion and to mitigate the risk of material misstatement to an acceptable level.

accounts that are affected by this critical audit matter are deferred tax assets, related valuation allowance and income tax expense.

/s/ GGF CPA LTD

GGF CPA LTD Certified Public Accountants

We have served as the Company’s auditor since March 1, 2024.

Guangzhou, Guangdong, China

March 27, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

The Board of Directors and Stockholders of

68 unchanged sentences

IT TECH PACKAGING, INC.

CONSOLIDATED BALANCE

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2023 AND 2022

1 unchanged sentence

Cash and bank balances

Restricted cash

Accounts receivable (net of allowance for doubtful accounts of $ 11,745 and $ 881,878 as of December 31, 2023 and December 31, 2022, respectively)

29 unchanged sentences

Stockholders’ Equity

Common stock, 50,000,000 shares authorized, $ 0.001 par value per share, 10,065,920 and 9,915,920 shares issued and outstanding as of December 31, 2022 and December, 31, 2021, respectively.

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

Additional paid-in capital

Statutory earnings reserve

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

( 10,555,534 )

( 7,514,540 )

Retained earnings

5 unchanged sentences

IT TECH PACKAGING, INC.

CONSOLIDATED STATEMENTS

OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND

COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

$ 100,352,434

$ 160,881,720

Cost of sales

4 unchanged sentences

( 10,058,723 )

(Loss) Income from Operations

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

( 1,500,298 )

Loss from Operations

( 9,575,888 )

( 5,304,527 )

Other Income (Expense):

Interest income

Subsidy income

Interest expense

( 1,027,951 )

( 1,124,702 )

Gain on acquisition

Gain (Loss) on derivative liability

(Loss) Income before Income Taxes

Loss before Income Taxes

( 9,599,081 )

( 4,859,969 )

Provision for Income Taxes

1 unchanged sentence

( 9,946,035 )

Net (Loss) Income

( 16,571,308 )

Other Comprehensive (Loss) Income

Other Comprehensive Loss

Foreign currency translation adjustment

( 3,040,994 )

Total Comprehensive (Loss) Income

( 18,010,708 )

(Losses) Earnings Per Share:

Basic and Diluted (Losses) Earnings per Share

Total Comprehensive Loss

$ ( 12,987,029 )

$ ( 34,582,016 )

Losses Per Share:

Basic and Diluted Losses per Share

Outstanding – Basic and Diluted

IT TECH PACKAGING, INC.

CONSOLIDATED STATEMENTS

OF CHANGES IN STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

4 unchanged sentences

$ 215,749,908

Issuance of shares to institutional investors

Issuance of shares to public investors

Exercise of warrants

Issuance of shares to officer and

Foreign currency translation adjustment

( 18,010,708 )

( 16,571,308 )

Balance at December 31, 2022

1 unchanged sentence

$ 181,323,892

Issuance of shares to officer and directors

Foreign currency translation adjustment

8 unchanged sentences

IT TECH PACKAGING, INC.

CONSOLIDATED STATEMENTS

OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

1 unchanged sentence

$ ( 9,946,035 )

$ ( 16,571,308 )

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

2 unchanged sentences

( 1,417,251 )

( 5,880,526 )

Gain on acquisition

(Recovery from) for bad debts

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

(Recovery from) Allowance for bad debts

Allowances for inventories, net

Share-based compensation and expenses

Gain on acquisition

Changes in operating assets and liabilities:

Accounts receivable

( 2,430,495 )

Prepayments and other current assets

( 3,976,010 )

( 8,350,716 )

( 4,531,263 )

Accounts payable

4 unchanged sentences

Income taxes payable

Net Cash (Used in) Provided by Operating Activities

( 2,436,071 )

Net Cash Provided by Operating Activities

Cash Flows from Investing Activities:

2 unchanged sentences

( 4,534,092 )

Proceeds from sale of property, plant and equipment

Acquisition of land

12 unchanged sentences

Loan to a related party (net)

( 6,838,274 )

Net Cash Provided by (Used in) Financing Activities

Effect of Exchange Rate Changes on Cash and Cash Equivalents

Net (Decrease) Increase in Cash and Cash Equivalents

Net Decrease in Cash and Cash Equivalents

( 5,132,947 )

Cash, Cash Equivalents - Beginning of Year

Cash, Cash Equivalents - End of Year

( 1,676,744 )

Cash, Cash Equivalents and Restricted Cash - Beginning of Year

Cash, Cash Equivalents and Restricted Cash - End of Year

Supplemental Disclosure of Cash Flow Information:

1 unchanged sentence

Cash paid for income taxes

Cash and bank balances

Restricted cash

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

See accompanying notes to consolidated financial

126 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2022, and 2021, details of the Company’s subsidiaries

and variable interest entity are as follows:

As of December 31, 2023, and 2022, details of the Company’s subsidiaries and variable interest entity are as follows:

Incorporation

104 unchanged sentences

Transaction gains or losses are recognized in the consolidated statement of income.

Under ASC Topic 830-30, all assets and liabilities are translated into

United States dollars using the current exchange rate at the end of each fiscal period.

The current exchange rates used by the Company

as of December 31, 2022, and 2021 to translate the Chinese RMB to the U.S.

Under ASC Topic 830-30, all assets and liabilities

are translated into United States dollars using the current exchange rate at the end of each fiscal period.

The current exchange rates

used by the Company as of December 31, 2023, and 2022 to translate the Chinese RMB to the U.S.

Dollars are 7.0827:1, and 6.9646:1, respectively.

expenses are translated using the average exchange rates prevailing throughout the respective years at 6.7573:1 and6.4474:1 for the years

ended December 31, 2022, and 2021, respectively.

Revenues and expenses are translated using the average exchange rates prevailing throughout the respective years at 7.0558:1 and 6.75731

for the years ended December 31, 2023, and 2022, respectively.

Translation adjustments are included in other comprehensive income (loss).

30 unchanged sentences

Closing balance

Inventories consist principally of raw materials

and finished goods, and are stated at the lower of cost (average cost method) or market.

Cost includes labor, raw materials, and allocated

Provision in inventories were $ nil for the years ended December 31, 2022, and 2021, respectively.

Inventories consist

principally of raw materials and finished goods, and are stated at the lower of cost (average cost method) or market.

Cost includes labor,

raw materials, and allocated overhead.

Provision in inventories were $ 2,959 and $ nil for the years

ended December 31, 2023, and 2022, respectively.

Property, Plant, and Equipment

105 unchanged sentences

costs as incurred.

The Company incurred $ nil and $ 3,972 of advertising and promotion costs for the years ended December 31, 2022, and

The Company incurred $ nil advertising and promotion costs for the years ended December 31, 2023, and 2022.

Research and development costs

20 unchanged sentences

long-term liabilities is depended on the management’s expectation of when the conditions attached to the grant can be fulfilled.

For the years ended December 31, 2022, and 2021, the Company received government subsidies of $ nil and $ 198,530 , which are recognized

as subsidy income in the consolidated statements of income in that fiscal year.

For the years ended December 31, 2023, and 2022, the Company received government subsidies of $ nil , which are recognized as subsidy income

in the consolidated statements of income in that fiscal year.

The Company accounts for income taxes pursuant

39 unchanged sentences

of comprehensive income (loss) were the net income for the years and the foreign currency translation adjustments.

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Earnings Per Share

6 unchanged sentences

ended December 31, 2023.

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Share-Based Compensation

6 unchanged sentences

issued in exchange for such services, whichever is more reliably measurable.

Reverse stock split

On 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 of the Nevada Revised Statutes (“NRS”).

The Reverse Stock Split was effected by the Company filing of a Certificate of Change Pursuant to NRS 78.209 with the Secretary of State

of the State of Nevada on July 7, 2022.

The par value per share of our stock remains unchanged at $ 0.001 per share after the Reverse Stock

All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures

have been retroactively adjusted to reflect the effects of the Reverse Stock Split.

Fair Value Measurements

36 unchanged sentences

Recently issued accounting pronouncements

In May 2019, the FASB issued ASU 2019-05, which

is an update to ASU Update No.

2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured

at amortized cost basis, replacing the previous incurred loss methodology.

The amendments in Update 2016-13 added Topic 326, Financial

Instruments—Credit Losses, and made several consequential amendments to the Codification.

Update 2016-13 also modified the accounting

for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized

cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities.

amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option

for certain financial assets previously measured at amortized cost basis.

For those entities, the targeted transition relief will increase

comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets.

Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13

while still providing financial statement users with decision-useful information.

In November 2019, the FASB issued ASU No.

2019-10, which

to update the effective date of ASU No.

2016-02 for private companies, not-for-profit organizations and certain smaller reporting companies

applying for credit losses, leases, and hedging standard.

The new effective date for these preparers is for fiscal years beginning after

December 15, 2022.

The Company is currently evaluating the impact of ASU 2019-05 will have on its consolidated financial statements.

In October 2021, the FASB issued ASU No.

Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08),

which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination

in accordance with Topic 606, Revenue from Contracts with Customers.

The new amendments are effective for fiscal years beginning after

December 15, 2023, including interim periods within those fiscal years.

The amendments should be applied prospectively to business combinations

occurring on or after the effective date of the amendments, with early adoption permitted.

The Company does not expect the adoption of

this standard to have a material impact on its consolidated financial statements.

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In October 2021,

the FASB issued ASU 2021-08, “Business Combinations”.

The amendments in this Update address how to determine whether

a contract liability is recognized by the acquirer in a business combination and resolve the inconsistency of measuring revenue contracts

with customers acquired in a business combination by providing specific guidance on how to recognize and measure acquired contract assets

and contract liabilities from revenue contracts in a business combination.

The amendments in this Update apply to all entities that enter

into a business combination within the scope of Subtopic 805-10, Business Combination-Overalls.

For public business entities, ASU 2021-08

is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

application is permitted.

The amendments in this Update should be applied prospectively to business combinations occurring on or after

the effective date of the amendments.

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

financial statements.

(3) Restricted Cash

Restricted cash of $ 472,983 as of December 31,

2023 was presented for the cash deposited at the Industrial and Commercial Bank of China of Tengsheng Paper.

The deposit was restricted

due to the personal legal proceeding of Mr.

Ping, the Legal Representative of Tengsheng Paper.

(4) Inventories

Raw materials inventory includes mainly recycled paper and gas.

goods include mainly products of corrugating medium paper and offset printing paper.

Inventories consisted of the following as of and

December 31, 2022, and 2021:

Raw materials inventory includes mainly recycled

paper and gas.

Finished goods include mainly products of corrugating medium paper and offset printing paper.

Inventories consisted of

the following as of and December 31, 2023, and 2022:

Raw Materials

8 unchanged sentences

(5) Prepayments and other current assets

Prepayments and other current assets consisted of the following as

of December 31, 2022, and 2021:

Prepayments and other current assets consisted

of the following as of December 31, 2023, and 2022:

Prepaid land lease

Prepayment for purchase of materials

Prepayment for purchase of equipment

Value-added tax recoverable

(6) Property, plant and equipment

As of December 31, 2022, and 2021, property, plant and equipment consisted

of the following:

As of December 31, 2023, and 2022, property, plant

and equipment consisted of the following:

Property, Plant, and Equipment:

9 unchanged sentences

$ 151,569,898

TECH PACKAGING, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2023, land use rights represented

2 unchanged sentences

As of December 31, 2022, land use rights represented

two parcel of state-owned lands located in Xushui District of Hebei Province in China, with lease terms of 50 years expiring from 2061

to 2066, respectively.

twenty-three parcel of state-owned lands located in Xushui District of Hebei Province in China, with lease terms of 50 years expiring

from 2061 to 2066, respectively.

As of December 31, 2023 and 2022, certain property,

plant and equipment of Dongfang Paper with net values of $ 280,466 and $ 1,130,333 , 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 $ 5,358,441 and $ 6,002,195 , respectively,

as of December 31, 2022 and 2021 was pledged for the bank loan from Bank of Industrial & Commercial Bank of China.

Land use right

of Tengsheng Paper with net value of $5,111,014 and $5,690,261 , respectively, as of December 31, 2022 and 2021 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 $ 3,948,953 and $ 4,407,889 ,

respectively, as of December 31, 2022 and 2021 was pledged for another long-term loan from credit union of Baoding Shengde.

See “ Short-term

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

plant and equipment of Dongfang Paper with net values of $ nil and $ 280,466 , respectively, have been pledged pursuant to a long-term loan

from credit union of Dongfang Paper.

Land use right of Tengsheng Paper with net value of $ 4,910,034 and $ 5,111,014 , respectively, as of

December 31, 2023 and 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 $ 3,781,366 and $ 3,948,953 , respectively, as of December 31, 2023 and 2022 was pledged for another long-term loan

from credit union of Baoding Shengde.

Land use right of Dongfang Paper with net value of $ 5,135,132 as of December 31, 2023 was pledged

for a long-term loan from credit union of Tengsheng Paper.

See “Short-term bank loans” under Note (8), Loans Payable, for

details of the transaction and asset collaterals.

Depreciation and amortization of property, plant

and equipment was $ 14,225,990 and $ 14,788,036 for the years ended December 31, 2023, and 2022, respectively.

No Impairment loss was recorded

for the years ended December 31, 2022, and 2021.

Loss from disposal and impairment

of property, plant and equipment of $ 1,500,298 and $ nil were recorded for the years ended December 31, 2023, and 2022.

Financing with Sale-Leaseback

13 unchanged sentences

the schedule.

As of December 31, 2022 and 2021, the balance of Leased Equipment net of amortization was $ 1,939,970 and $ 2,286,459 , respectively.

The lease liability were $ 131,772 and $ 362,394 , and its current portion in the amount of $ 131,772 and $ 210,161 as of December 31, 2022

and 2021, respectively.

Amortization of the Leased Equipment was

$ 157,854 and $ 165,441 for the year ended December 31, 2022 and 2021, respectively.

Total interest expenses for the sale lease back arrangement

was $ 38,954 and $ 71,798 for the year ended December 31, 2022 and 2021, respectively.

As 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.

The future minimum lease payments of the capital

lease as of December 31, 2022 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 December 31, 2023 and 2022, respectively.

Operating lease as lessor

The Company has a non-cancellable agreement to

lease plant to tenant under operating lease for 1 year from November 2023 to November 2024.

The lease does not contain contingent payments.

The rental income of the year was paid in advance by the tenant in December 2023.

Operating lease as lessee

The Company leases space under non-cancelable

operating leases for plant and production equipment.

The lease does not have significant rent escalation holidays, concessions, leasehold

improvement incentives, or other build-out clauses.

Further, the lease does not contain contingent rent provisions.

The lease include

option to renew in condition that it is agreed by the landlord before expiry.

Therefore, the majority of renewals to extend the lease

terms are not included in its right-of-use assets and lease liabilities as they are not reasonably certain of exercise.

The Company regularly

evaluate the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term.

As the Company’s leases do not provide an

implicit rate, it uses its incremental borrowing rate based on the information available at the lease commencement date in determining

the present value of the lease payments.

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of the Company’s lease expense

are as follows:

Operating lease cost

Short-term lease cost

Supplemental cash flow information related to

its operating lease was as follows for the period ended December 31, 2023:

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

Operating cash outflow from operating lease

Maturities of its lease liabilities for all operating

lease are as follows as of December 31, 2023:

Total operating lease payments

Present value of lease liabilities

current portion, record in current liabilities

Present value of lease liabilities

The weighted average remaining lease terms and

discount rates for all of its operating leases were as follows as of December 31, 2023:

Remaining lease term and discount rate:

Weighted average remaining lease term (years)

Weighted average discount rate

(8) Loans Payable

6 unchanged sentences

On November 10, 2022, the Company entered into

a working capital loan agreement with the ICBC, with a balance of $ 5,958,561 as of December 31, 2021.

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.

The loan was fully repaid in November 2022.

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 % per annum.

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 December 31, 2023

and 2022, respectively.

On November 30, 2022, the Company entered into

a working capital loan agreement with the ICBC, with a balance of $ 5,023,978 as of December 31, 2022.

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.

The loan will be due by November 13, 2023.

a working capital loan agreement with the ICBC, with a balance of $ nil and $ 287,167 as of December 31, 2023 and 2022, respectively.

loan bore an interest rate of 4.25 % per annum.

The loan was fully repaid in May 2023.

On 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 December 31, 2023 and 2022, respectively.

loan bore an interest rate of 4.25 % per annum.

The loan was fully repaid in May 2023.

On 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 December 31, 2023 and 2022, respectively.

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

The loan was fully repaid in July 2023.

On May 29, 2023, the Company entered into a working

capital loan agreement with the ICBC, to borrow $ 423,567 at a fixed interest rate of 4.25 % per annum.

The loan was repaid in November

On June 29, 2023, the Company entered into a working

capital loan agreement with the ICBC, to borrow $ 423,567 at a fixed interest rate of 3.55 % per annum.

The loan was repaid in September

On September 15, 2023, the Company entered into

a working capital loan agreement with the ICBC, with a balance of $ 2,824 as of December 31, 2023.

1 unchanged sentence

of 3.45 % per annum.

The loan will be due by May 29, 2023.

On November 30, 2022, the Company entered into

The loan will be due by September 14, 2024.

On September 22, 2023, the Company entered into

a working capital loan agreement with the ICBC, with a balance of $ 70,594 as of December 31, 2023.

1 unchanged sentence

of 3.45 % per annum.

The loan will be due by May 29, 2023.

On July 29, 2022, the Company entered into a working

capital loan agreement with the China Construction Bank, with a balance of $ 143,583 as of December 31, 2022.

The loan bears a fixed interest

rate of 3.95 % per annum.

The loan will be due by July 29, 2023.

The loan will be due by September 21, 2024.

On September 22, 2023, the Company entered into

a working capital loan agreement with the ICBC, with a balance of $ 350,149 as of December 31, 2023.

The loan bears a fixed interest rate

of 3.45 % per annum.

The loan will be due by September 21, 2024.

As of December 31, 2022, there were guaranteed

short-term borrowings of $ 5,958,561 and unsecured bank loans of $ nil .

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

As of December 31, 2023, there were guaranteed short-term borrowings

of $ 5,023,978 and unsecured bank loans of $ 574,333 .

of $ nil and unsecured bank loans of $ 423,567 .

The average short-term borrowing rates for the years ended December

7 unchanged sentences

Rural Credit Union of Xushui District Loan 4

Rural Credit Union of Xushui District Loan 5

Rural Credit Union of Xushui District Loan 6

Current portion of long-term loans

1 unchanged sentence

( 4,835,884 )

Long-term loans from credit union

Long-term loans

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2022, the Company’s long-term debt

repayments for the next coming years were as follows:

As of Dec 31, 2023, the Company’s long-term debt repayments

for the next coming years were as follows:

On April 16, 2014, the Company entered into a

1 unchanged sentence

from June 21, 2014 to November 18, 2018.

The loan is guaranteed by an independent third party.

Interest payment is due quarterly and bore

a rate of 7.68 % per annum.

With 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 December 31, 2022, and 2021, total outstanding loan balance was $ 1,234,816 and $ 1,348,871 , respectively, Out of the total outstanding

loan balance, current portion amounted were $ 1,234,816 and $ 329,376 as of December 31, 2022, and 2021, respectively, which are presented

as current liabilities in the consolidated balance sheet and the remaining balance of $ nil and $ 1,019,495 are presented as non-current

liabilities in the consolidated balance sheet as of December 31, 2022, and 2021, respectively.

The loan was guaranteed by an independent third party.

Interest payment was 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,

The loan was fully repaid in December 2023.

As of December 31, 2023 and 2022, total outstanding loan balance was $ nil and $ 1,234,816 ,

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

On July 15, 2013, the Company entered into a loan

1 unchanged sentence

from December 21, 2013 to July 26, 2018.

On June 21, 2018, the loan was extended for additional 5 years and will be due and payable in

various installments from December 21, 2018 to June 20, 2023.

The loan is secured by certain of the Company’s manufacturing equipment

with net book value of $ 280,466 and $ 1,130,333 as of December 31, 2022, and 2021, respectively.

Interest payment is due quarterly and

bore a rate of 7.68 % per annum.

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

As of December 31,

2022, and 2021, the total outstanding loan balance was $ 3,589,582 and $ 3,921,139 , respectively.

Out of the total outstanding loan balance,

current portion amounted were $ 3,589,582 and $ 1,960,569 as of December 31, 2022, and 2021 respectively, which are presented as current

liabilities in the consolidated balance sheet and the remaining balance of $ nil and $ 1,960,570 are presented as non-current liabilities

in the consolidated balance sheet as of December 31, 2022, and 2021, respectively.

On June 21, 2018, the loan was extended for additional 5 years and was due and payable in various

installments from December 21, 2018 to June 20, 2023.

On August 24, 2023, the loan was extended for another 3 years and will be due and

payable on August 24, 2026 .

The loan is secured by certain of the Company’s manufacturing equipment with net book value of $ nil

and $ 280,466 as of December 31, 2023 and 2022, respectively.

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

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

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

was $ 3,528,315 and $ 3,589,582 .

Out of the total outstanding loan balance, current portion amounted was $ 1,269,290 , which is presented

as current liabilities in the consolidated balance sheet and the remaining balance of $ 2,259,025 is presented as non-current liabilities

in the consolidated balance sheet as of December 31, 2023.

On April 17, 2019, the Company entered into a

6 unchanged sentences

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

With effective

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

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

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

was $ 2,297,332 and $ 2,509,528 , respectively.

Out of the total outstanding loan balance, current portion amounted were $ nil and $ 2,509,528

as of December 31, 2022 and 2021 respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining

balance of $ 2,297,332 and $ nil are presented as non-current liabilities in the consolidated balance sheet as of December, 2022 and 2021,

respectively.

was $ 2,259,026 and $ 2,297,332 , respectively, which are presented as current liabilities and non-current liabilities in the consolidated

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

On December 12, 2019, the Company entered into

6 unchanged sentences

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

With effective

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

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

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

was $ 1,866,582 and $ 2,038,992 , respectively.

Out of the total outstanding loan balance, current portion amounted were $ nil and $ 2,038,992

as of December 31, 2022, and 2021 respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining

balance of $ 1,866,582 and $ nil are presented as non-current liabilities in the consolidated balance sheet as of December 31, 2022, and

2021, respectively.

was $ 1,835,458 and $ 1,866,582 , respectively, which are presented as current liabilities and non-current liabilities in the consolidated

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

On July 1, 2022, the Company entered into a loan

1 unchanged sentence

The loan is payable in monthly installment of RMB 10,667 from July 2022 to July 2027.

As of December 31, 2022, the total outstanding

loan balance was $ 51,690 .

Out of the total outstanding loan balance, the current portion amounted $ 11,486 , which is presented as current

liabilities and the remaining balance of $ 40,204 is presented as non-current liabilities in the consolidated balance sheet as of December

The company repaid the loan in November

As of December 31, 2023 and 2022, the total outstanding loan balance was $ nil and $ 51,690 , respectively.

Out of the total outstanding

loan balance, current portion amounted $ nil and $ 11,486 , respectively, which are presented as current liabilities and the remaining balance

of $ nil and $ 40,204 are presented as non-current liabilities in the consolidated balance sheet as of December 31, 2023 and 2022, respectively.

On 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 is due and payable in various installments

from August 21, 2023 to February 24, 2025.

The loan is secured by Dongfang 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 % per annum.

As of December 31, 2023, the total outstanding loan

balance was $ 2,541,404 .

Out of the total outstanding loan balance, current portion amounted was $ 1,284,820 , which is presented as current

liabilities in the consolidated balance sheet and the remaining balance of $ 1,256,584 is presented as non-current liabilities in the consolidated

balance sheet as of December 31, 2023.

On December 5, 2023, the Company entered into

a loan agreement with the Rural Credit Union of Xushui District for a term of 3 years, which was due in various installments from June

21, 2024 to December 5, 2026.

The loan was guaranteed by an independent third party.

Interest payment was due monthly and bore a rate

of 7 % per annum.

As of December 31, 2023, total outstanding loan balance was $ 1,214,226 .

Out of the total outstanding loan balance, current

portion amounted $ 225,903 , which is presented as current liabilities and the remaining balance of $ 988,323 is presented as non-current

liabilities in the consolidated balance sheet as of December 31, 2023.

Total interest expenses for the short-term bank

53 unchanged sentences

31, 2023, and 2022.

The accrued interest owe to the CEO was approximately $ 608,465 and $ 664,666 , as of December 31, 2022, and 2021, respectively,

which was recorded in other payables and accrued liabilities.

On December 8, 2021, the Company entered an agreement

The accrued interest owe to Mr.

Zhenyong Liu was approximately $ 598,319 and $ 608,465 , as of December 31, 2022, and

2021, respectively, which was recorded in other payables and accrued liabilities.

On December 8, 2021, the Company entered into

an agreement with Mr.

Zhenyong Liu, which allows Mr.

Zhenyong Liu to borrow from the Company an amount of $ 6,507,431 (RMB 44,089,085 ).

The loan is unsecured

and carries a fixed interest rate of 3 % per annum.

The loan is unsecured and carries a fixed interest rate of 3 % per annum.

The loan was repaid by Mr.

1 unchanged sentence

In October 2022 and November 2022, the Company

entered two agreements with Mr.

entered into two agreements with Mr.

Zhenyong Liu, which allowed Mr.

1 unchanged sentence

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

The loans were repaid by Mr.

Zhenyong Liu in

February 2023.

$ 4,235,673 (RMB 30,000,000 ) was repaid by Mr.

Zhengyong Liu in August 2023 and the remaining balance was repaid in December 2023.

Interest income of the loan for the year ended December

31, 2023 was $ 290,275 .

As of December 31, 2023, and 2022, amount due

10 unchanged sentences

Accrued interest to a related party

Payable for purchase of equipment

Payable for purchase of property, plant and equipment

Accrued commission to salesmen

16 unchanged sentences

The following weighted-average assumptions were used in the December 31, 2023:

Year ended December 31,

Expected term

3 unchanged sentences

0.19 % - 4.01 %

The following table summarizes the changes in the derivative liabilities

during the year ended December 31, 2022:

The following table summarizes the changes in the derivative liabilities during the year ended December 31, 2023:

Fair Value Measurements Using Significant Observable Inputs (Level 3)

1 unchanged sentence

Change in fair value of derivative liability

( 1,417,251 )

Balance at December 31, 2023

5 unchanged sentences

( 1,417,251 )

( 5,880,526 )

IT TECH PACKAGING, INC.

9 unchanged sentences

On March 1, 2021, the Company offered and sold

to the public investors an aggregate of 29,277,866 shares of common stock and 14,638,933 warrants to purchase up to 14,638,933 shares

of common stock in a firm commitment underwritten public offering for gross proceeds of approximately $ 21.9 million.

The purchase price

for each share of common stock and accompanying warrant was $ 0.75 .

to the public investors an aggregate of 2,927,786 shares of common stock and 1,463,893 warrants to purchase up to 1,463,893 shares of

common stock in a firm commitment underwritten public offering for gross proceeds of approximately $ 21.9 million.

The purchase price for

each share of common stock and accompanying warrant was $ 7.5 .

The exercise price of the warrant was $ 7.5 per share.

2 unchanged sentences

Company approved the Reverse Stock Split, at a ratio of 1-for-10 , pursuant to Section 78.207 of the Nevada Revised Statutes (“NRS”).

Reverse Stock Split was effected by the Company filing of a Certificate of Change Pursuant to NRS 78.209 with the Secretary of State of

the State of Nevada on July 7, 2022.

The Reverse Stock Split was affected by the Company filing of a Certificate of Change Pursuant to NRS 78.209 with the Secretary of State

of the State of Nevada on July 7, 2022.

The par value per share of our stock remains unchanged at $ 0.001 per share after the Reverse Stock

8 unchanged sentences

(13) Warrants

On April 29, 2020, the Company and certain

institutional investors entered into a securities purchase agreement, as amended on May 4, 2020 (the “2020Purchase

Agreement”), pursuant to which the Company agreed to sell to such investors an aggregate of 440,000 shares of common stock and

warrants to purchase up to 440,000 shares of common stock in a concurrent private placement (the “May 2020 Warrants”).

The exercise price of the May 2020 Warrant is $ 7.425 per share.

These warrants become exercisable on July 23, 2020 and have a term

of exercise equal to five years and six months from the date of issuance till July 23, 2025.

88,000 May 2020 Warrants were exercised

in February 2021 at the exercise price of $7.425per share and 352,000 May 2020 Warrants were outstanding as of December 31,

On January 20, 2021, the Company offered and

sold to certain institutional investors an aggregate of 2,618,182 shares of common stock and 2,618,182 warrants to purchase up to

On April 29, 2020, the Company and certain institutional

investors entered into a securities purchase agreement, as amended on May 4, 2020 (the “2020 Purchase Agreement”), pursuant

to which the Company agreed to sell to such investors an aggregate of 440,000 shares of common stock and warrants to purchase up to 440,000

shares of common stock in a concurrent private placement (the “May 2020 Warrants”).

The exercise price of the May 2020 Warrant

is $ 7.425 per share.

These warrants become exercisable on July 23, 2020 and have a term of exercise equal to five years and six months

from the date of issuance till July 23, 2025.

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 December 31, 2023.

On January 20, 2021, the Company offered and sold

to certain institutional investors an aggregate of 2,618,182 shares of common stock and 2,618,182 warrants to purchase up to 2,618,182

shares of common stock (the “January 2021 Warrants”).

The January 2021 Warrants became exercisable on

January20, 2021 at an exercise price of $5.5 and will expire on January 20, 2026.

1,410,690 January 2021 Warrants were exercised in

January and February of 2021 at the exercise price of $5.5 per share.

1,207,492 January 2021 Warrants were outstanding as of

December 31, 2022.

The January 2021 Warrants became exercisable on January 20, 2021 at

an exercise price of $ 5.5 and will expire on January 20, 2026.

1,410,690 January 2021 Warrants were exercised in January and February

of 2021 at the exercise price of $ 5.5 per share.

1,207,492 January 2021 Warrants were outstanding as of December 31, 2023.

On March 1, 2021, the Company offered and sold

5 unchanged sentences

$ 7.5 per share and 1,457,143 March 2021 Warrants were outstanding as of December 31, 2023.

The Company classified warrant as liabilities

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

The Company classified warrant as liabilities and accounted for the

issuance of the warrants as a derivative.

IT TECH PACKAGING, INC.

20 unchanged sentences

net income per share are calculated as follows:

Year Ended December 31,

Basic (loss) income per share

Net (loss) income for the year - numerator

Basic loss per share

Net loss for the year - numerator

$ ( 9,946,035 )

$ ( 16,571,308 )

Weighted average common stock outstanding - denominator

Net (loss) income per share

Diluted (loss) income per share

Net (loss) income for the year - numerator

Net loss per share

Diluted loss per share

Net loss for the year - numerator

$ ( 9,946,035 )

$ ( 16,571,308 )

Weighted average common stock outstanding - denominator

1 unchanged sentence

Weighted average common stock outstanding - denominator

Diluted (loss) income per share

Diluted loss per share

IT TECH PACKAGING, INC.

2 unchanged sentences

United States

The Company and Shengde Holdings are incorporated in the State of Nevada

and are subject to the U.S.

The Company and Shengde Holdings are incorporated in the State

of Nevada and are subject to the U.S.

federal tax and state statutory tax rates up to 34 % and 0 %, respectively.

On December 22, 2017, the U.S.

the Tax Cuts and Jobs Act (the “2017 TCJA”), which significantly changed U.S.

The 2017TCJA lowered the Company’s

statutory federal income tax rate from the highest rate of 35 % to 21 % effective January 1, 2018, while also imposing a deemed repatriation

tax on deferred foreign income which requires companies to pay a one-time transition tax on previously unremitted earnings of non-U.S.

On December 22, 2017,

enacted the Tax Cuts and Jobs Act (the “2017 TCJA”), which significantly changed U.S.

The 2017TCJA lowered

the Company’s U.S.

statutory federal income tax rate from the highest rate of 35 % to 21 % effective January 1, 2018, while also imposing

a deemed repatriation tax on deferred foreign income which requires companies to pay a one-time transition tax on previously unremitted

earnings of non-U.S.

subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings.

The SEC staff issued Staff Accounting

Bulletin (SAB) 118, which provides guidance on accounting for enactment effects of the2017 TCJA.

SAB 118 provides a measurement period

of up to one year from the 2017 TCJA’s enactment date for companies to complete their accounting under ASC 740.

In accordance with

SAB 118, to the extent that a company’s accounting for certain income tax effects of the 2017 TCJA is incomplete but it is able

to determine a reasonable estimate, it must record a provisional estimate in its financial statements.

If a company cannot determine a

provisional estimate to be included in its financial statements, it should continue to apply ASC 740 on the basis of the provisions of

the tax laws that were in effect immediately before the enactment of the 2017 TCJA.

staff issued Staff Accounting Bulletin (SAB) 118, which provides guidance on accounting for enactment effects of the 2017TCJA.

provides a measurement period of up to one year from the 2017TCJA’s enactment date for companies to complete their accounting under

In accordance with SAB 118, to the extent that a company’s accounting for certain income tax effects of the 2017TCJA is

incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements.

company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply ASC 740 on the

basis of the provisions of the tax laws that were in effect immediately before the enactment of the 2017TCJA.

Transition tax:

The transition tax is a tax on

previously untaxed accumulated and current earnings and profits (E&P) of certain of the Company’s non-U.S.

The transition tax is a tax on previously untaxed

accumulated and current earnings and profits (E&P) of certain of the Company’s non-U.S.

subsidiaries.

determine the amount of the transition tax, the Company must determine, in addition to other factors, the amount of post-1986 E&P

of the relevant subsidiaries, as well as the amount of non-U.S.

To determine the amount

of the transition tax, the Company must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries,

as well as the amount of non-U.S.

income taxes paid on such earnings.

Further, the transition tax is based

in part on the amount of those earnings held in cash and other specified assets.

The Company was able to make a reasonable estimate of

the transition tax and recorded a provisional obligation and additional income tax expense of approximately $ 80,000 in the fourth quarter

However, the Company is continuing to gather additional information and will consider additional technical guidance to more precisely

compute and account for the amount of the transition tax.

This amount may change when the Company finalizes the calculation of post-1986

foreign E&P previously deferred from U.S.

Further, the transition tax is based in part on the amount of those

earnings held in cash and other specified assets.

The Company was able to make a reasonable estimate of the transition tax and recorded

a provisional obligation and additional income tax expense of approximately $ 80,000 in the fourth quarter of 2017.

However, the Company

is continuing to gather additional information and will consider additional technical guidance to more precisely compute and account for

the amount of the transition tax.

This amount may change when the Company finalizes the calculation of post-1985 foreign E&P previously

deferred from U.S.

federal taxation and finalizes the amounts held in cash or other specified assets.

TCJA’s transition tax is payable over eight years beginning in 2018.

Dongfang Paper and Baoding Shengde are

PRC operating companies and are subject to PRC Enterprise Income Tax.

Pursuant to the PRC New Enterprise Income Tax Law, Enterprise Income

Tax is generally imposed at a statutory rate of 25 %.

The provisions for income taxes for the

years ended December 31, 2022, and 2021 were as follows:

The 2017TCJA’s transition

tax is payable over eight years beginning in 2018.

Dongfang Paper and Baoding Shengde are PRC operating companies

and are subject to PRC Enterprise Income Tax.

Pursuant to the PRC New Enterprise Income Tax Law, Enterprise Income Tax is generally imposed

at a statutory rate of 25 %.

The provisions for income taxes for the years ended December

31, 2023, and 2022 were as follows:

Provision for Income Taxes

6 unchanged sentences

the Company was incorporated in the United States and incurred net operating losses of approximately $ 62,499 and $ 530,581 for U.S.

income tax purposes for the years ended December 31, 2022 and 2021, respectively.

The net operating loss carried forward may be available

to reduce future years’ taxable income.

tax purposes for the years ended December 31, 2023 and 2022, respectively.

The net operating loss carried forward may be available to

reduce future years’ taxable income.

These carry forwards would expire, if not utilized, during the period of 2030 through 2035.

of December 31, 2022, management believed that the realization of all the U.S.

As of December 31, 2023, management believed that the realization of all the U.S.

income tax benefits from these losses, which generally

1 unchanged sentence

limited operating history and continuing losses for United States income tax purposes.

Accordingly, As of 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.

Accordingly, As of December 31, 2023 and 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.

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

of the otherwise deductible (or taxable) deferred tax items is as follows:

A summary of the otherwise deductible (or taxable) deferred tax items is as follows:

Deferred tax assets (liabilities)

3 unchanged sentences

Net operating loss carryover of PRC company

(Gain)/Loss on asset disposal

Total deferred tax assets

8 unchanged sentences

PRC Statutory rate

Effect of tax and book difference

Effect of different tax jurisdiction

Change in valuation allowance

11 unchanged sentences

of the repatriation of the VIE’s earnings and profits for purposes of paying dividends will change the Company’s position

that Baoding Shengde and the VIE, Dongfang Paper are considered or are expected to be indefinitely reinvested offshore to support our

future capacity expansion.

that its PRC subsidiary Baoding Shengde and the VIE, Dongfang Paper are considered or are expected to be indefinitely reinvested offshore

to support our future capacity expansion.

If these earnings are repatriated to the U.S.

resulting in U.S.

taxable income in the future, or if it is determined

that such earnings are to be remitted in the foreseeable future, additional tax provisions would be required.

taxable income in the future,

or if it is determined that such earnings are to be remitted in the foreseeable future, additional tax provisions would be required.

The Company has adopted ASC Topic 740-10-05, Income

12 unchanged sentences

There are no estimated interest costs and penalties provided in the Company’s consolidated

financial statements for the years ended December 31, 2022 and 2021, respectively.

financial statements for the year ended December 31, 2023 and 2022, respectively.

The Company’s tax positions related to open tax

3 unchanged sentences

On November 12, 2021, the Company’s Annual

General Meeting adopted and approved the 2021 Omnibus Equity Incentive Plan of IT Tech Packaging, Inc.(the”2021 Plan”).Under

General Meeting adopted and approved the 2021 Omnibus Equity Incentive Plan of IT Tech Packaging, Inc.(the”2021 Plan”).

the 2021 ISP, the Company has reserved a total of 150,000 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.

On August 15, 2022, the Company granted an aggregate of 150,000

shares of common stock under its compensatory incentive plans to fifteen employees.

Total fair value of the stock was calculated at $ 156,000

as of the date of grant.

2023 Incentive Stock Plan

On October 31, 2023, the Company’s Annual

General Meeting adopted and approved the 2023 Omnibus Equity Incentive Plan of IT Tech Packaging, Inc.(the”2023 Plan”).

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.

All shares of common stock under the 2023 ISP,

including shares originally authorized by equity holders and shares remaining for future issuance as of December 31, 2023, have been reserved.

IT TECH PACKAGING, INC.

5 unchanged sentences

The lease requires an annual rental payment of approximately $ 16,943 (RMB 120,000 ).

This operating lease is renewable at the

end of the 30-year term.

Future minimum lease payments of the land lease

is as follows:

Total land lease payments

This lease is renewable at the end of the

30-year term.

Total operating lease payments

Sale of Headquarters Compound Real Properties

10 unchanged sentences

of December 31, 2023.

Future minimum lease payments of the building

lease is as follows:

Total operating lease payments

34 unchanged sentences

Not Attributable

Elimination of

Enterprise-wide,

of Inter-segment

Inter-segment

( 2,995,369 )

Depreciation and amortization

Loss on impairment of assets

Interest income

4 unchanged sentences

( 9,946,035 )

( 16,571,308 )

December 31, 2022

Not Attributable

of Inter-segment

Elimination of

Enterprise-wide,

$ 151,574,318

Inter-segment

( 2,942,893 )

5 unchanged sentences

( 17,162,887 )

( 1,100,286 )

( 16,571,308 )

As of December 31, 2023

Not Attributable

Elimination of

Inter-segment

Enterprise-wide,

of Inter-segment

As of December 31, 2022

Not Attributable

Elimination of

Inter-segment

Enterprise-wide,

of Inter-segment

$ 109,369,166

IT TECH PACKAGING, INC.

14 unchanged sentences

China in the event of bank failure, there is no deposit insurance system in China that is similar to the protection provided by the Federal

Deposit Insurance Corporation (“FDIC”) of the United States as of December 31, 2022 and December 31, 2021.

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 (US$ 71,792 )

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 December 31, 2022, and 2021,

while for the cash placed in financial institutions in the PRC, the balances exceeding the maximum coverage of RMB 500,000 amounted to

RMB 50,728,229 (US$ 7,283,725 ) as of December 31, 2022.

Deposit Insurance Corporation (“FDIC”) of the United States as of December 31, 2023 and 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 (US$ 70,595 ) 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 December 31, 2023, and 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 24,135,060 (US$ 3,407,607 )

as of December 31, 2023.

(21) Risks and Uncertainties

6 unchanged sentences

(22) Subsequent Event

The board removed Jie Ping from the position of Legal Representative

of Tengsheng Paper On January 1, 2024.

(23) Summarized Quarterly Financial Data (Unaudited)

Quarterly financial information for 2022 and 2021 is as follows:

Gross (loss) profit

Loss from operations

5 unchanged sentences

( 1,975,368 )

( 3,984,009 )

Net income per share

(Loss) income from operations

Net (loss) income

Loss from operations

( 2,990,436 )

( 1,235,765 )

( 1,895,373 )

( 2,488,214 )

( 1,887,318 )

( 11,907,863 )

Net income per share

13 unchanged sentences

Current Assets

Cash and cash equivalents

Prepayments and other current assets

Total current assets

Investment in subsidiaries

Cash and cash

and other current assets

Total current

in subsidiaries

$ 173,060,775

$ 186,736,773

LIABILITIES AND STOCKHOLDERS’ EQUITY

AND STOCKHOLDERS’ EQUITY

Current Liabilities

Inter-company payable (net)

Inter-company payable

Due to related parties

Total current liabilities

Accrued payroll and employee

Accrued liabilities

current liabilities

Derivative liability

Total liabilities

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

stockholders’ equity

Liabilities and Stockholders’ Equity

$ 173,060,775

5 unchanged sentences

Loss from Operations

( 1,919,294 )

Equity in earnings of unconsolidated subsidiaries

5 unchanged sentences

( 9,946,035 )

( 16,587,240 )

Provision for Income Taxes

$ ( 9,946,035 )

$ ( 16,602,302 )

Other comprehensive income /(loss)

( 3,040,994 )

( 18,010,708 )

Total Comprehensive Income (loss)

$ ( 12,987,029 )

$ ( 34,613,010 )

Net Cash Used in Operating Activities

3 unchanged sentences

( 6,502,000 )

( 32,053,000 )

Net Cash Provided by Financing Activities

1 unchanged sentence

( 1,251,894 )

( 7,205,755 )

Cash and Cash Equivalents - Beginning of Year

5 unchanged sentences

and Financial Disclosure

February 29, 2024, WWC, P.C.

Certified Public Accountants (“WWC”) resigned as our independent registered public accounting

firm, effective immediately.

reports on our consolidated financial statements for the fiscal years ended December 31, 2022 and 2021 did not contain an adverse opinion

or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

the two most recent fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through February 29, 2024, there

were no disagreements with WWC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope

or procedure, which disagreements, if not resolved to the satisfaction of WWC, would have caused WWC to make reference to the subject

matter of the disagreements in connection with its reports on our consolidated financial statements for such years.

Also during this time,

there were no “reportable events,” as defined in Item 304(a)(1)(v) of Regulation S-K.

provided WWC with a copy of the above disclosures and requested that WWC furnish the Company with a letter addressed to the SEC stating

whether or not it agrees with the statements made above.

A copy of WWC’s letter dated February 29, 2024 was attached as Exhibit

16.1 to a Current Report on Form 8-K that was filed by us with the SEC on March 4, 2024.

March 1, 2024, we engaged GGF CPA LIMITED (“GGF”) as our independent registered public accounting firm for the fiscal year

ending December 31, 2023, effective immediately.

During the fiscal years ended December 31, 2022 and 2021 and through March 1, 2024, neither

we nor anyone on its behalf consulted with GGF regarding (i) the application of accounting principles to any specified transaction, either

completed or proposed or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written

report nor oral advice was provided to us that GGF concluded was an important factor considered by us in reaching a decision as to any

accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement,” as

defined in Item 304(a)(1)(iv) of Regulation S-K, or a “reportable event,” as defined in Item 304(a)(1)(v) of Regulation S-K.

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 8. Financial Statements and Supplementary Data