What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-04-11 compared with 2024-03-27 · 369 added, 492 removed, 1224 unchanged (41% of the section changed)

3 unchanged sentences

and the notes thereto, are presented beginning at page F-1.

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

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

44 unchanged sentences

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

We determined that the auditing of deferred tax

asset should be considered a critical audit matter.

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 regulations.

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

These 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.

The accounts that are affected

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

/s/ WWC, P.C.

Certified Public Accountants

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 regulations.

The Company’s consolidated financial statements include entities in multiple jurisdictions

with varying tax laws.

These 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.

The accounts that are affected by this critical audit matter are deferred tax assets, related valuation allowance

and income tax expense.

/s/ GGF CPA LTD

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

San Mateo, California

March 23, 2023

Guangzhou, Guangdong, China

April 11, 2025

IT TECH PACKAGING, INC.

8 unchanged sentences

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

16 unchanged sentences

Long-term loans

Deferred gain on sale-leaseback

Lease liability - non-current

3 unchanged sentences

Stockholders’ Equity

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.

Common stock, 50,000,000 shares authorized, $ 0.001 par value per share, 10,065,920 shares issued and outstanding as of December 31, 2024 and December, 31, 2023.

Additional paid-in capital

13 unchanged sentences

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

$ 100,352,434

Cost of sales

4 unchanged sentences

( 9,075,475 )

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

Loss on impairment of assets

( 1,500,298 )

5 unchanged sentences

Interest expense

( 1,027,951 )

Gain on acquisition

Gain (Loss) on derivative liability

2 unchanged sentences

( 9,599,081 )

Provision for Income Taxes

( 11,711,339 )

Income Tax (Expenses) Benefits

( 9,843,094 )

18 unchanged sentences

$ 181,323,892

Issuance of shares to officer and

Foreign currency translation adjustment

24 unchanged sentences

(Gain) Loss on derivative liability

( 1,417,251 )

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

(Recovery from) Allowance for bad debts

(Recovery from) for bad debts

Allowances for inventories, net

Share-based compensation and expenses

Gain on acquisition

Changes in operating assets and liabilities:

1 unchanged sentence

Prepayments and other current assets

( 3,976,010 )

Accounts payable

8 unchanged sentences

( 22,292,870 )

( 4,534,092 )

Proceeds from sale of property, plant and equipment

Acquisition of land

( 6,364,439 )

Net Cash Used in Investing Activities

( 22,239,297 )

( 10,898,531 )

Cash Flows from Financing Activities:

Proceeds from issuance of shares and warrants, net

Repayments of related party loans

Proceeds from short term bank loans

5 unchanged sentences

Loan to a related party (net)

Net Cash Provided by (Used in) Financing Activities

Effect of Exchange Rate Changes on Cash and Cash Equivalents

Net Decrease in Cash and Cash Equivalents

Net Cash (Used in) Provided by Financing Activities

( 3,256,696 )

Effect of Exchange Rate Changes on Cash and Cash Equivalents

Net Increase (Decrease) in Cash and Cash Equivalents

( 5,132,947 )

135 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Incorporation

Incorporation or

or Establishment

Establishment

Principal Activity

Dongfang Holding

November 13, 2006

Inactive investment holding

Shengde Holdings

February 25, 2009

State of Nevada

Investment holding

Baoding Shengde

Paper production and distribution

July 15, 2021

New material technology service

As of December 31, 2024, and 2023, details of the Company’s subsidiaries

and variable interest entity are as follows:

Date of Place of Percentage

Incorporation Incorporation or of

Name or Establishment Establishment Ownership Principal Activity

Dongfang Holding November 13, 2006 BVI 100 % Inactive investment holding

Shengde Holdings February 25, 2009 State of Nevada 100 % Investment holding

Baoding Shengde June 1, 2009 PRC 100 % Paper production and distribution

Qianrong July 15, 2021 PRC 100 % New material technology service

Variable interest entity (“VIE”):

Dongfang Paper

March 10, 1996

Paper production and distribution

Tengsheng Paper

April 07, 2011

Paper production and distribution

* Dongfang Paper is treated as a 100 % controlled variable interest

entity of the Company.

Dongfang Paper March 10, 1996 PRC Control* Paper production and distribution

Tengsheng Paper April 07, 2011 PRC Control** Paper production and distribution

* Dongfang Paper is treated as a 100 % controlled variable interest entity of the Company.

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

25 unchanged sentences

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

8 unchanged sentences

Advance from customers

Due to related parties

Accrued payroll and employee benefits

3 unchanged sentences

Long-term loans

Deferred gain on sale-leaseback

Lease liability - non-current

17 unchanged sentences

balances, transactions and cash flows are eliminated on consolidation.

Liquidity and Going Concern

As of December 31, 2024, the Company had current assets of $ 28,461,303

(including a VAT recoverable of Tengsheng Paper in amount of $ 13,154,375 ), and current liabilities of $ 20,146,767 , resulting in a working

capital of $ 8,314,536 .

However, production of Baoding Shende has been suspended in 2024, rendering related VAT unrecoverable in the short

Net working capital excluding VAT recoverable as of December 31, 2024 was a working capital deficit of $ 4,839,839 .

Baoding Shengde

and Tengsheng Paper have incurred loss that there is doubt about these subsidiaries ability to continue as going concerns.

The main reason

of losses was due to high depreciation costs, decreased market demand, and elevated material costs.

Therefore, there was a substantial

doubt about the ability of the Company to continue as a going concern that it may be unable to realize its assets and discharge its liabilities

in the normal course of business as of December 31, 2024.

To address these challenges, the Company plans to optimize its raw

material structure and stabilize manufacturing capacity utilization, which will help to reduce procurement costs.

Additionally, the Company

is actively exploring new products and adjusting pricing strategies in a timely manner to secure a larger market share.

Furthermore, the Company will maintain rigorous control over inventory,

working capital, and cash flow to mitigate financial risks.

The Company will also strategically utilize financing quotas from the capital

market to ensure the smooth and healthy operation of the company.

The Company’s continued existence as a going concern depends on the

successful implementation of its business plan.

This includes increasing market acceptance of its products to boost sales volume and achieve

economies of scale, while deploying more effective marketing strategies and cost control measures to better manage the operating cash

flow position.

Foreign Currency Translation

18 unchanged sentences

used by the Company as of December 31, 2024, and 2023 to translate the Chinese RMB to the U.S.

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

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

Dollars are 7.1884 :

1 , and 7.0827 :

1 , respectively.

Revenues and expenses are translated using the average exchange rates prevailing throughout the respective years at 7.1167 :

1 and 7.0558 :

for the years ended December 31, 2024, and 2023, respectively.

31 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 overhead.

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

ended December 31, 2023, and 2022, respectively.

Inventories, net

Inventories are stated at the lower of cost (weighted average

basis) or net realizable value.

The methods of determining inventory costs are used consistently from year to year.

Net realizable value

is based on estimated selling prices less selling expenses and any further costs expected to be incurred for completion.

Adjustments to

reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances.

Inventories consist principally of raw materials

and finished goods.

Cost includes labor, raw materials, and allocated overhead.

Provision in inventories were $ 730,490 and $ 2,970 for

the years ended December 31, 2024, and 2023, respectively.

Property, Plant, and Equipment

14 unchanged sentences

method as follows:

Land use right

Over the lease term

Building and improvements

Machinery and equipment

Land use right Over the lease term

Building and improvements 30 years

Machinery and equipment 5 - 15 years

Vehicles 15 years

Valuation of long-lived asset

12 unchanged sentences

Statutory Reserves

According to the laws and regulations

in the PRC, the Company is required to provide for certain statutory funds, namely, a reserve fund by an appropriation from net profit

after taxation but before dividend distribution based on the local statutory financial statements of the PRC subsidiaries and variable

interest entity prepared in accordance with the PRC accounting principles and relevant financial regulations.

According to the laws and regulations in the PRC,

the Company is required to provide for certain statutory funds, namely, a reserve fund by an appropriation from net profit after taxation

but before dividend distribution based on the local statutory financial statements of the PRC subsidiaries and variable interest entity

prepared in accordance with the PRC accounting principles and relevant financial regulations.

Each of the Company’s wholly owned subsidiary

69 unchanged sentences

Research and development costs

Research and development costs are expensed as

incurred and included in selling, general and administrative expenses.

Research and development costs are expensed

as incurred and included in selling, general and administrative expenses.

Research and development expenses incurred $ 99,610 and

8 unchanged sentences

in which they are incurred.

Government subsidies

A government subsidy is not recognized until there

is reasonable assurance that:

(a) the enterprise will comply with the conditions attached to the grant;

and(b)the grant will be received.

When the Company receives government subsidies but the conditions attached to the grants have not been fulfilled, such government subsidies

are deferred and recorded under other payables and accrued expenses, and other long-term liability.

The classification of short-term or

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, 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

49 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Share-Based Compensation

The Company uses the fair value recognition provision

of ASC Topic 718, Compensation-Stock Compensation, which requires the Company to expense the cost of employee services received

in exchange for an award of equity instruments based on the grant date fair value of such instruments over the vesting period.

The Company also applies the provisions of ASC

Topic 505-50, Equity Based Payments to Non-Employees to account for stock-based compensation awards issued to non-employees for

Such awards for services are recorded at either the fair value of the consideration received or the fair value of the instruments

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 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.

In December 2023, the FASB

issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

Under this ASU, public entities must annually (1)

disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative

threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax

income or loss by the applicable statutory income tax rate).

This ASU’s amendments are effective for all entities that are subject

to Topic 740, Income Taxes, for annual periods beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating

the impact of this pronouncement on our disclosures.

In November 2024, the FASB issued ASU 2024-03,

Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, which emphasizes the importance of providing more

granular and detailed expense information in financial statements.

The update requires entities to disaggregate expenses by nature and

function on the income statement, offering a clearer picture of an entity’s cost structure and operational efficiency.

This enhanced disclosure

is intended to improve the transparency and comparability of financial reporting.

Entities must apply the new guidance retrospectively

to all periods presented in the financial statements.

The amendments are effective for annual reporting periods beginning after December

15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is in the process

of assessing the impact of these changes on its financial reporting and will implement the necessary adjustments to comply with the updated

IT TECH PACKAGING, INC.

1 unchanged sentence

(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.

Restricted cash of $ 1,034,203 and $ 472,983 as

of December 31, 2024 and 2023 was presented for the cash deposited at the banks of Tengsheng Paper.

The deposits were restricted due to

the legal proceeding against Tengsheng Paper and Jie Ping, who had served as the executive director and the legal representative of Tengsheng

(4) Inventories

4 unchanged sentences

the following as of and December 31, 2024, and 2023:

Raw Materials

Recycled paper board

5 unchanged sentences

Inventory reserve

Total inventory, net

The movement of inventory reserve was as follows:

Year Ended December 31,

Balance at beginning of year

Additional charge (written off), net

Foreign currency translation difference

Balance at the end of year

(5) Prepayments and other current assets

1 unchanged sentence

of the following as of December 31, 2024, and 2023:

Prepaid land lease

Prepayment for purchase of materials

Value-added tax recoverable

Allowance for doubtful accounts

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The movement of allowance for doubtful accounts

was as follows:

Year Ended December 31,

Balance at beginning of year

Additional charge (written off), net

Foreign currency translation difference

Balance at the end of year

(6) Property, plant and equipment

1 unchanged sentence

and equipment consisted of the following:

Property, Plant, and Equipment:

Land use rights

8 unchanged sentences

$ 163,974,022

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2023, land use rights represented

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

years expiring from 2061 to 2068.

As of December 31, 2022, land use rights represented

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, 2024 and 2023, 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.

As of December 31, 2024 and 2023, certain property,

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.

plant and equipment of Dongfang Paper with net values of $ nil have been pledged pursuant to a long-term loan from credit union of Dongfang

Certain property, plant and equipment of Baoding Shengde with net value of $ 3,407,848 have been pledged pursuant two short-term

loans from credit union of Baoding Shengde.

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

transaction and asset collaterals.

Depreciation and amortization of property, plant

1 unchanged sentence

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

The Company entered into a sale-leaseback arrangement

(the “Lease Financing Agreement”) with TAC Leasing Co., Ltd.(“TLCL”) on August 6, 2020, for a total financing

proceeds in the amount of RMB 16 million (approximately US$ 2.3 million).

Under the sale-leaseback arrangement, Tengsheng Paper sold the

Leased Equipment to TLCL for 16 million (approximately US$ 2.3 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 $ 14 ) 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.

Tengsheng Paper made payments due according to

the schedule.

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.

of property, plant and equipment of $ 102,490 and $ 1,500,298 were recorded for the years ended December 31, 2024, and 2023.

Operating lease as lessor

9 unchanged sentences

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.

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

24 unchanged sentences

Short-term bank loans

Rural Credit Union of Xushui District Loan 1

Rural Credit Union of Xushui District Loan 2

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

China Construction Bank Loan

Total short-term bank loans

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On 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 % 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 $ 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 December 24, 2024, the Company entered into

a loan agreement with the Rural Credit Union of Xushui District to borrow $ 1,808,469 (RMB 13,000,000 ) to repay the existing long-term loan

of the same amount.

The loan was secured by the equipment of Baoding Shengde as collateral for the benefit of the bank.

The loan bears

a fixed rate of 6 % and will be due by December 23, 2025.

On December 24, 2024, the Company entered into

a loan agreement with the Rural Credit Union of Xushui District to borrow $ 2,225,808 (RMB 16,000,000 ) to repay the existing long-term loan

of the same amount.

The loan was secured by the equipment of Baoding Shengde as collateral for the benefit of the bank and guaranteed

by a third party company.

The loan bears a fixed rate of 6 % and will be due by December 23, 2025.

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.

The loan bears a fixed interest rate

of 3.45 % per annum.

The loan will be due by September 14, 2024.

a working capital loan agreement with the ICBC, with a balance of $ nil and $ 2,824 as of December 31, 2024 and 2023, respectively.

loan bore a fixed interest rate of 3.45 % per annum.

The loan was repaid in June 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.

The loan bears a fixed interest rate

of 3.45 % per annum.

The loan will be due by September 21, 2024.

a working capital loan agreement with the ICBC, with a balance of $ nil and $ 70,594 as of December 31, 2024 and 2023, respectively.

loan bore a fixed interest rate of 3.45 % per annum.

The loan was repaid in June 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.

a working capital loan agreement with the ICBC, with a balance of $ nil and $ 350,149 as of December 31, 2024 and 2023, respectively.

loan bore a fixed interest rate of 3.45 % per annum.

The loan was repaid in June 2024.

On June 11, 2024, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $ 2,782 as of December 31, 2024.

The loan bears a fixed interest rate of 3.45 %

The loan is due for repayment by June 11, 2025.

On June 21, 2024, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $ 139,113 as of December 31, 2024.

The loan bears a fixed interest rate of 3.45 %

The loan is due for repayment by June 21, 2025.

On June 22, 2024, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $ 139,113 as of December 31, 2024.

The loan bears a fixed interest rate of 3.45 %

The loan is due for repayment by June 22, 2025.

On June 24, 2024, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $ 136,331 as of December 31, 2024.

The loan bears a fixed interest rate of 3.45 %

The loan is due for repayment by June 24, 2025.

As of December 31, 2024, there were guaranteed

2 unchanged sentences

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

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

31, 2023, and 2022 were approximately 4.48 % and 4.72 %, respectively.

The average short-term borrowing rates for the

years ended December 31, 2024, and 2023 were approximately 4.6 % and 4.48 %, respectively.

Long-term loans

6 unchanged sentences

Rural Credit Union of Xushui District Loan 5

Rural Credit Union of Xushui District Loan 6

Current portion of long-term loans

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

loan agreement with the Rural Credit Union of Xushui District for a term of 5 years, which was originally due in various installments

from June 21, 2014 to November 18, 2018.

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.

As of Dec 31, 2024, the Company’s long-term debt repayments for

the next coming years were as follows:

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

6 unchanged sentences

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.

as of December 31, 2024 and 2023.

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.

Effective from November 15, 2022,

the interest rate was reduced to 7 % per annum.

As of December 31, 2024 and 2023, the total outstanding loan balance was $ 3,476,434 and

$ 3,528,315 .

Out of the total outstanding loan balance, current portion amounted was $ 2,641,756 and $ 1,269,290 , which is presented as current

liabilities in the consolidated balance sheet and the remaining balance of $ 834,678 and $ 2,259,025 is presented as non-current liabilities

in the consolidated balance sheet as of December 31, 2024 and 2023, respectively.

On April 17, 2019, the Company entered into a

1 unchanged sentence

from August 21, 2019 to April 16, 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 April 16, 2024 according to the new schedule.

The loan is secured by Tengsheng Paper with its land use

right as collateral for the benefit of the credit union.

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

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

The loan was renewed on March 22, 2021, December 24, 2021 and April 16, 2024 and extended for

additional 5 years in total, which is due on April 15, 2026 according to the new schedule.

The loan was secured by Tengsheng Paper with

its land use right as collateral for the benefit of the credit union.

Interest payment was due quarterly and bore a rate of 7.2 % per annum.

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

On December 24, 2024, the Company entered into a one-year

loan agreement with the Rural Credit Union of Xushui District for same amount to repay the loan.

This refinancing arrangement secured

a lower market rate and did not involve any cash inflows or outflows.

As of December 31, 2024 and 2023, the total outstanding loan balance

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.

was $ nil and $ 2,259,026 , respectively, which are presented as current liabilities in the consolidated balance sheet as of December 31,

2024 and 2023.

On December 12, 2019, the Company entered into

2 unchanged sentences

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.

The loan is secured by Tengsheng Paper with its land use

in total, which was due on December 11, 2024 according to the new schedule.

The loan was secured by Tengsheng Paper with its land use

right as collateral for the benefit of the credit union.

1 unchanged sentence

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 $ 1,835,458 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

agreement with Jiangna Yu, a customer of the Company, pursuant to which the Company borrowed RMB 400,000 from Jiangna Yu for a term of

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

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 December 24, 2024, the Company entered into a one-year loan

agreement with the Rural Credit Union of Xushui District for same amount to repay the loan.

This refinancing arrangement secured a lower

market rate and did not involve any cash inflows or outflows.

As of December 31, 2024 and 2023, the total outstanding loan balance was

$ nil and $ 1,835,458 , respectively, which are presented as current liabilities in the consolidated balance sheet as of December 31, 2024

and 2023, respectively.

On February 26, 2023, the Company entered into

4 unchanged sentences

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.

The loan was repaid in July 2024.

As of December

31, 2024 and 2023, the total outstanding loan balance was $ nil and $ 2,541,404 .

Out of the total outstanding loan balance, current portion

amounted was $ nil and $ 1,284,820 , which is presented as current liabilities in the consolidated balance sheet and the remaining balance

of $ nil and $ 1,256,584 is presented as non-current liabilities in the consolidated balance sheet as of December 31, 2024 and 2023, respectively.

On December 5, 2023, the Company entered into

1 unchanged sentence

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.

The loan is guaranteed by an independent third party.

Interest payment is due monthly and bears a rate of

7 % per annum.

As of December 31, 2024 and 2023, total outstanding loan balance was $ 1,196,372 and $ 1,214,226 , respectively.

total outstanding loan balance, current portion amounted $ 918,146 and $ 225,903 , which is presented as current liabilities and the remaining

balance of $ 278,226 and $ 988,323 is presented as non-current liabilities in the consolidated balance sheet as of December 31, 2024 and

2023, respectively.

Total interest expenses for the short-term bank

51 unchanged sentences

Zhenyong Liu were $ nil .

The interest expense incurred for such related party loans are $ nil for the years ended December

The interest expense incurred for such related party loans were $ nil for the years ended December

31, 2024, and 2023.

The accrued interest owe to Mr.

The net interest owe to Mr.

Zhenyong Liu was approximately $ 304,600 and $ 598,319 , as of December 31, 2024, and 2023,

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 was repaid by Mr.

Zhenyong Liu in February 2022.

In October 2022 and November 2022, the Company

5 unchanged sentences

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 .

Interest income of the loan for the years ended December

31, 2024 and 2023 were $ nil and $ 290,275 .

As of December 31, 2024, and 2023, amount due

to shareholder are $ 727,433 , which represent funds from shareholders to pay for various expenses incurred in the U.S.

The amount is due

on demand with interest free.

to shareholder are $ nil and $ 727,433 , respectively, which represent funds from shareholders to pay for various expenses incurred in the

The amount is due on demand with interest free.

IT TECH PACKAGING, INC.

3 unchanged sentences

Accrued electricity

Accrued rental

Value-added tax payable

3 unchanged sentences

Accrued bank loan interest

Accrued litigation costs

(11) Derivative Liabilities

14 unchanged sentences

The following weighted-average assumptions were used in the December 31, 2024:

Year ended December 31,

Expected term

3 unchanged sentences

0.13 % - 4.25 %

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

The following table summarizes the changes in the derivative liabilities

during the year ended December 31, 2024:

Fair Value Measurements Using Significant Observable Inputs (Level

5 unchanged sentences

Day one loss due to derivative liabilities as warrant

(Gain) Loss on change in fair value of derivative liability

( 1,417,251 )

Loss (Gain) on change in fair value of derivative liability

IT TECH PACKAGING, INC.

14 unchanged sentences

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

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 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

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.

Issuance of common stock pursuant to the 2021 Incentive Stock Plan

On August 15, 2022, the Company granted an aggregate

of 150,000 shares of common stock under its compensatory incentive plans to fifteen employees, as awards under the 2021 Incentive Stock

Please see Note (16), Stock Incentive Plans for more details.

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

date of grant.

(13) Warrants

37 unchanged sentences

and exercisable warrants as of December 31, 2024.

Warrants Outstanding

Warrants Exercisable

Contractual life

Warrants Outstanding Warrants Exercisable

Average Weighted Weighted

Remaining Average Average

Number of Contractual life Exercise Number of Exercise

Shares (in years) Price Shares Price

3,016,635 1.08 $ 6.6907 3,016,635 $ 6.6907

Aggregate intrinsic value is the sum of the amounts

6 unchanged sentences

net income per share are calculated as follows:

Basic loss per share

Net loss for the year - numerator

Year Ended December 31,

Basic (loss) income per share

Net (loss) income for the year - numerator

$ ( 9,843,094 )

1 unchanged sentence

Weighted average common stock outstanding - denominator

Net loss per share

Diluted loss per share

Net loss for the year - numerator

Net (loss) income per share

Diluted (loss) income per share

Net (loss) income for the year - numerator

$ ( 9,843,094 )

8 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,

22, 2017, the U.S.

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.

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.

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

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

SAB 118 provides a measurement period of up to one year from the 2017TCJA’s enactment date for companies to complete their accounting

under ASC740.

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.

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 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.

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.

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 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.

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-1985

foreign E&P previously deferred from U.S.

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

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:

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, 2024, and 2023 were as follows:

Year Ended December 31,

Provision for Income Taxes

2 unchanged sentences

Deferred Tax Provision PRC

Total Provision for (Deferred tax benefit)/ Income Taxes

Total Income Tax Expenses (Benefits)

In addition to the reversible future PRC income

15 unchanged sentences

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

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred tax assets (liabilities)

1 unchanged sentence

Impairment of property, plant and equipment

Impairment of inventory

Provision for doubtful debts

Miscellaneous

6 unchanged sentences

Total deferred tax assets, net

IT TECH PACKAGING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table reconciles the statutory rates to the Company’s

effective tax rate as of:

Year Ended December 31,

PRC Statutory rate

Effect of different tax jurisdiction

Effect of tax and book difference

Change in valuation allowance

Effective income tax rate

During the years ended December 31, 2023, and 2022, the effective income

tax rate was estimated by the Company to be - 3.6 % and - 241.0 %, respectively.

During the years ended December 31, 2024, and

2023, the effective income tax rate was estimated by the Company to be - 9.8 % and - 3.6 %, respectively.

As of December 31, 2024, except for the one-time

32 unchanged sentences

2023 Incentive Stock Plan

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”).

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”).

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

(the”2023 ISP”).

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,

24 unchanged sentences

of December 31, 2024.

Total operating lease payments

Present value of lease liabilities

current portion, record in current liabilities

Present value of lease liabilities

Capital commitment

10 unchanged sentences

adversely affected.

Pending legal proceeding of Jie Ping

In November 2023, an individual plaintiff involved in a civil loan

dispute filed a lawsuit against the defendants including Tengsheng Paper and Jie Ping, who served as the executive director and the legal

representative of Tengsheng Paper, at the Lianchi District People’s Court of Baoding City, China.

On December 1, 2023, the plaintiff

sought property preservation measures, requesting the PRC Court to freeze RMB 3.35 million worth of bank deposits held by Jie Ping and

Tengsheng Paper.

Following this request, on the same day, the PRC Court issued a ruling to immediately freeze the RMB 3.35 million worth

of bank deposits of Jie Ping and Tengsheng Paper.

On June 14, 2024, the PRC Court ordered the defendants to repay the principal of the

loan in the amount of RMB 3,320,000 to the plaintiff, and Tengsheng Paper was jointly liable for repayment.

Accrued litigation costs of

$ 461,855 was recorded as current liabilities of consolidated balance sheet as of December 31, 2024.

IT TECH PACKAGING, INC.

16 unchanged sentences

is as follows:

December 31, 2023

Year Ended December 31,

Not Attributable

2 unchanged sentences

Inter-segment

( 2,995,369 )

Depreciation and amortization

2 unchanged sentences

Interest expense

Income tax expense(benefit)

Income tax expense

Net income (loss)

1 unchanged sentence

( 1,513,034 )

December 31, 2022

( 9,843,094 )

Year Ended December 31, 2023

Not Attributable

4 unchanged sentences

Depreciation and amortization

Loss on impairment of assets

Interest income

4 unchanged sentences

( 9,946,035 )

( 16,571,308 )

As of December 31, 2024

1 unchanged sentence

Elimination of

Inter-segment

Enterprise-wide,

Inter-segment

As of December 31, 2023

8 unchanged sentences

single customer contributed over 10% of total sales.

For the year ended December 31, 2023, the Company had two major suppliers

For the year ended December 31, 2024, the Company had three major suppliers

that accounted for 73 %, 17 % and 7 % of total purchases by the Company.

25 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)

Gross (loss) profit

Loss from operations

( 2,772,361 )

(Loss) income from operations

( 3,501,670 )

4 unchanged sentences

( 4,044,865 )

Net income per share

Net loss per share

Gross (loss) profit

Loss from operations

5 unchanged sentences

( 1,975,368 )

( 3,984,009 )

Net income per share

13 unchanged sentences

Current Assets

Cash and cash

and other current assets

Total current

in subsidiaries

Cash and cash equivalents

Prepayments and other current assets

Total current assets

Investment in subsidiaries

$ 160,752,834

$ 173,060,775

AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

1 unchanged sentence

Due to related parties

Accrued payroll and employee

Accrued liabilities

current liabilities

Income tax payable

Total current liabilities

Derivative liability

Total liabilities

stockholders’ equity

Liabilities and Stockholders’ Equity

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

$ 160,752,834

3 unchanged sentences

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

Year Ended December 31,

Selling, general and administrative expenses

17 unchanged sentences

$ ( 12,987,029 )

Year Ended December 31,

Net Cash Used in Operating Activities

2 unchanged sentences

Net Cash Used in Investing Activities

( 6,502,000 )

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.

On February 29, 2024, WWC,

Certified Public Accountants (“WWC”) resigned as our independent registered public accounting firm, effective immediately.

WWC’s 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.

During 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.

We 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.

On 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