IT Tech Packaging, Inc. (NYSE:ITP) Q3 2019 Earnings Conference Call November 8, 2019 8:00 AM ET Company Participants Melody Shi - Evergreen Investor Relations Janice Wang - Weitian Investor Relations Conference Call Participants Operator Hello, ladies and gentlemen, and welcome to participate in IT Tech Packaging Third Quarter 2019 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded. [Operator Instructions]. Joining us today are Mr. Zhenyong Liu, IT Tech ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ | --- | --- | |---------------------------------------------------------------------------------------------------|-------------------------------- ...

IT Tech Packaging, Inc. (NYSE:ITP) Q2 2019 Earnings Conference Call August 9, 2019 8:00 AM ET Company Participants Zhenyong Liu - Chairman and Chief Executive Officer Dan McCarron - Weitian Investor Relations Janice Wang - Weitian Investor Relations Jing Hao - Chief Financial Officer Conference Call Participants Operator Hello, ladies and gentlemen, and welcome to participate in IT Tech Packaging's Second Quarter 2019 Earnings Conference Call. At this time, I would like to inform you that this conference is ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ | --- | --- | |---------------------------------------------------------------------------------------------------|------------------------------------- ...

IT Tech Packaging, Inc. (NYSE:ITP) Q1 2019 Earnings Conference Call May 10, 2019 8:00 AM ET Company Participants Dan McCarron - Weitian Investor Relations Jing Hao - Chief Financial Officer Conference Call Participants Operator Hello, ladies and gentlemen, and welcome to participate in IT Tech Packaging's First Quarter 2019 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. Joining us today are Mr. Zh ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements and accompanying notes for Q1 2019 and 2018 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This table presents the company's assets, liabilities, and equity as of March 31, 2019, and December 31, 2018 | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------- | :------------- | :---------------- | | Total Assets | $194,557,304 | $203,076,010 | | Total Liabilities | $27,436,302 | $36,526,095 | | Total Stockholders' Equity | $167,121,002 | $166,549,915 | | Total Current Assets | $15,405,184 | $24,158,872 | | Total Current Liabilities | $20,411,723 | $29,634,267 | | Cash and bank balances | $2,625,059 | $8,474,809 | | Restricted cash | $0 | $3,642,616 | | Inventories | $4,156,848 | $2,923,516 | | Short-term bank loans | $6,683,003 | $11,802,075 | | Notes payable | $0 | $3,642,616 | [Condensed Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) This table details the company's revenues, costs, and net loss for the three months ended March 31, 2019, and 2018 | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | Change ($) | Change (%) | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :----------- | | Revenues | $17,450,292 | $1,888,194 | $15,562,098 | 824.18% | | Cost of sales | $(17,642,758) | $(2,583,502) | $(15,059,256) | 582.90% | | Gross Loss | $(192,466) | $(695,308) | $502,842 | -72.32% | | Selling, general and administrative expenses | $(2,981,473) | $(3,813,794) | $832,321 | -21.82% | | Loss from Operations | $(3,173,939) | $(4,519,478) | $1,345,539 | -29.77% | | Net Loss | $(2,722,595) | $(4,086,276) | $1,363,681 | -33.37% | | Basic and Diluted Losses per Share | $(0.12) | $(0.19) | $0.07 | -36.84% | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table summarizes cash flows from operating, investing, and financing activities for Q1 2019 and 2018 | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net Cash Used in Operating Activities | $(3,052,152) | $(4,857,594) | | Net Cash Used in Investing Activities | $(1,415,761) | $(707,162) | | Net Cash (Used in) Provided by Financing Activities | $(5,366,166) | $791,503 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | $341,713 | $471,899 | | Net Decrease in Cash and Cash Equivalents | $(9,492,366) | $(4,301,354) | | Cash, Cash Equivalents and Restricted Cash - End of Period | $2,625,059 | $4,716,073 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [(1) Organization and Business Background](index=8&type=section&id=(1)%20Organization%20and%20Business%20Background) This note describes the company's corporate structure, name change, and variable interest entity (VIE) arrangement - The company changed its corporate name to IT Tech Packaging, Inc. and its NYSE symbol to **"ITP" effective August 1, 2018**[11](index=11&type=chunk)[116](index=116&type=chunk) - Dongfang Paper is treated as a **100% controlled variable interest entity (VIE)** through contractual agreements, accounting for **100% of the Company's total revenue** and **over 90% of total assets**[19](index=19&type=chunk)[21](index=21&type=chunk) - Uncertainties in the PRC legal system could challenge the VIE structure, potentially leading to penalties or deconsolidation, though the Company believes this possibility is remote[22](index=22&type=chunk)[23](index=23&type=chunk) [(2) Basis of Presentation and Significant Accounting Policies](index=13&type=section&id=(2)%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note outlines accounting principles, management estimates, fair value measurements, and working capital position - The financial statements are prepared in accordance with GAAP, requiring management estimates and judgments[30](index=30&type=chunk) - Fair value measurements utilize a three-level hierarchy based on observable and unobservable inputs[32](index=32&type=chunk)[33](index=33&type=chunk) - As of March 31, 2019, the Company had a working capital deficit of approximately **$5.0 million**, but management expects improvement with new tissue paper production capacity[41](index=41&type=chunk) [(3) Restricted Cash](index=14&type=section&id=(3)%20Restricted%20Cash) This note details the restricted cash balance and the lifting of restrictions in January 2019 | Metric | March 31, 2019 | December 31, 2018 | | :-------------- | :------------- | :---------------- | | Restricted cash | $0 | $3,642,616 | - The restriction on cash was lifted in January 2019 upon the maturity of bank acceptance notes[42](index=42&type=chunk) [(4) Inventories](index=15&type=section&id=(4)%20Inventories) This note provides a breakdown of inventory components and explains changes in inventory levels | Inventory Item | March 31, 2019 | December 31, 2018 | Change ($) | Change (%) | | :------------------------- | :------------- | :---------------- | :---------- | :--------- | | Total Inventories | $4,156,848 | $2,923,516 | $1,233,332 | 42.19% | | Raw Materials | $2,581,315 | $1,355,703 | $1,225,612 | 90.40% | | Recycled paper board | $1,423,675 | $412,317 | $1,011,358 | 245.29% | | Tissue base paper | $182,096 | $24,027 | $158,069 | 657.90% | - The increase in recycled paper board inventory was due to rebuilding stock after a reduction in December 2018 to manage price volatility[143](index=143&type=chunk) [(5) Prepayments and other current assets](index=15&type=section&id=(5)%20Prepayments%20and%20other%20current%20assets) This note presents balances of prepayments and other current assets, including value-added tax recoverable | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------------- | :------------- | :---------------- | | Total Prepayments and other current assets | $6,213,819 | $6,241,299 | | Value-added tax recoverable | $5,871,234 | $5,760,280 | [(6) Property, plant and equipment, net](index=15&type=section&id=(6)%20Property,%20plant%20and%20equipment,%20net) This note details net property, plant, and equipment, including depreciation and collateral arrangements | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------------------- | :------------- | :---------------- | | Property, Plant and Equipment, net | $167,245,378 | $167,829,716 | | Accumulated depreciation and amortization | $(109,341,374) | $(103,433,464) | - Certain property, plant, and equipment of Dongfang Paper and land use rights were pledged as collateral for long-term loans[47](index=47&type=chunk) - Depreciation and amortization expense for Q1 2019 was **$3,930,060**, an increase from **$3,730,585** in Q1 2018[48](index=48&type=chunk) [(7) Loans Payable](index=16&type=section&id=(7)%20Loans%20Payable) This note outlines the company's short-term and long-term loan balances, repayment activities, and interest rates | Loan Type | March 31, 2019 | December 31, 2018 | Change ($) | Change (%) | | :------------------ | :------------- | :---------------- | :----------- | :--------- | | Short-term bank loans | $6,683,003 | $11,802,075 | $(5,119,072) | -43.37% | | Long-term loans from credit union | $4,796,911 | $4,706,259 | $90,652 | 1.93% | - Two short-term bank loans (ICBC Loan 1 and Bank of Cangzhou loan) totaling **over $9 million** were repaid in January 2019[49](index=49&type=chunk)[50](index=50&type=chunk) - The average short-term borrowing rate decreased from **5.57% in Q1 2018 to 4.76% in Q1 2019**[53](index=53&type=chunk) - Two long-term loans from the Rural Credit Union of Xushui District were renewed for additional **5-year terms** in late 2018[56](index=56&type=chunk)[57](index=57&type=chunk) [(8) Related Party Transactions](index=18&type=section&id=(8)%20Related%20Party%20Transactions) This note discloses loans from the CEO and lease agreements with related parties | Metric | March 31, 2019 | December 31, 2018 | | :---------------------- | :------------- | :---------------- | | Total loans due to CEO (Mr. Zhenyong Liu) | $2,227,668 | $2,185,569 | | Accrued interest to CEO | $653,574 | $617,454 | | Interest expense for related party loans (Q1) | $24,316 | $112,472 | - A significant loan from Mr. Zhenyong Liu for working capital was extended for an additional **3 years**, due **July 12, 2021**[63](index=63&type=chunk)[168](index=168&type=chunk) - The Company leases its Industrial Buildings from Hebei Fangsheng, a related party, with the lease extended for another **four years** at an annual rental of approximately **$149,060**[66](index=66&type=chunk)[151](index=151&type=chunk) [(9) Notes payable](index=19&type=section&id=(9)%20Notes%20payable) This note details the notes payable balance and its elimination due to repayment in January 2019 | Metric | March 31, 2019 | December 31, 2018 | | :------------ | :------------- | :---------------- | | Notes payable | $0 | $3,642,616 | - Bank acceptance notes totaling **$3,642,616** were paid off in January 2019, eliminating notes payable[67](index=67&type=chunk) [(10) Other payables and accrued liabilities](index=20&type=section&id=(10)%20Other%20payables%20and%20accrued%20liabilities) This note details other payables and accrued liabilities, including equipment purchases and related party interest | Metric | March 31, 2019 | December 31, 2018 | | :----------------------------------- | :------------- | :---------------- | | Total Other payables and accrued liabilities | $8,723,322 | $10,222,796 | | Payable for purchase of equipment | $7,646,197 | $8,788,924 | | Accrued interest to a related party | $653,574 | $617,454 | [(11) Common Stock](index=20&type=section&id=(11)%20Common%20Stock) This note provides information on outstanding common stock and shares granted under incentive plans | Metric | March 31, 2019 | December 31, 2018 | | :----------------- | :------------- | :---------------- | | Shares outstanding | 22,022,316 | 21,450,316 | - On September 13, 2018, **534,500 shares** of common stock were granted under the 2015 Omnibus Equity Incentive Plan as compensation, valued at **$470,360**[70](index=70&type=chunk)[93](index=93&type=chunk) [(12) Stock warrants](index=21&type=section&id=(12)%20Stock%20warrants) This note details outstanding warrants, their exercise price, and intrinsic value | Metric | March 31, 2019 | | :------------------------------ | :------------- | | Warrants outstanding and exercisable | 820,312 | | Weighted average exercise price | $1.71 | - No warrants were issued, exercised, cancelled, or expired during the three months ended March 31, 2019 or 2018[77](index=77&type=chunk) - The aggregated intrinsic value of warrants outstanding and exercisable was **$nil** as of March 31, 2019[77](index=77&type=chunk) [(13) Earnings Per Share](index=22&type=section&id=(13)%20Earnings%20Per%20Share) This note presents basic and diluted loss per share and explains the exclusion of anti-dilutive warrants | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Basic and Diluted Loss per Share | $(0.12) | $(0.19) | - **820,312 warrants** were excluded from diluted EPS calculations as their effects would have been anti-dilutive[78](index=78&type=chunk) [(14) Income Taxes](index=23&type=section&id=(14)%20Income%20Taxes) This note outlines applicable income tax rates, deferred tax assets, and the effective income tax rate - PRC operating companies are subject to a **25% Enterprise Income Tax rate**[82](index=82&type=chunk) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Provision for Income Taxes (Deferred Tax Benefit) | $(647,795) | $(538,969) | | Effective income tax rate | 19.2% | 11.7% | | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------- | :------------- | :---------------- | | Total deferred tax assets, net | $9,081,933 | $8,277,091 | [(15) Stock Incentive Plans](index=25&type=section&id=(15)%20Stock%20Incentive%20Plans) This note describes the company's various stock incentive plans and recent share grants - The Company has the 2011, 2012, and 2015 Incentive Stock Plans to grant common stock to directors, officers, employees, and consultants[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - On September 13, 2018, **534,500 shares** were granted under the 2015 Omnibus Equity Incentive Plan, valued at **$470,360**[70](index=70&type=chunk)[93](index=93&type=chunk) [(16) Commitments and Contingencies](index=25&type=section&id=(16)%20Commitments%20and%20Contingencies) This note details operating lease payments, capital expenditure commitments, and a significant loan guarantee | Metric | Amount | | :-------------------------- | :------------ | | Total operating lease payments | $4,548,897 | | Capital expenditure commitments (March 31, 2019) | $2,378,958 | - The Company guarantees a **$4,603,846** long-term loan for Baoding Huanrun Trading Co., a major supplier, posing a contingent risk if the supplier becomes insolvent[100](index=100&type=chunk)[176](index=176&type=chunk) [(17) Segment Reporting](index=27&type=section&id=(17)%20Segment%20Reporting) This note provides financial information by operating segment, including net income and total assets - The Company operates two segments: Dongfang Paper (offset printing paper, corrugating medium paper) and Baoding Shengde (digital photo paper)[101](index=101&type=chunk) - All sales are to customers located in the PRC[102](index=102&type=chunk) Net Income (Loss) by Segment (Q1 2019) | Segment | Net Income (Loss) (Q1 2019) | | :--------------- | :-------------------------- | | Dongfang Paper | $(2,440,828) | | Baoding Shengde | $(38,807) | | Not Attributable | $(242,960) | | Consolidated | $(2,722,595) | Total Assets by Segment (March 31, 2019) | Segment | Total Assets (March 31, 2019) | | :--------------- | :---------------------------- | | Dongfang Paper | $175,578,609 | | Baoding Shengde | $18,950,298 | | Not Attributable | $28,397 | | Consolidated | $194,557,304 | [(18) Concentration and Major Customers and Suppliers](index=29&type=section&id=(18)%20Concentration%20and%20Major%20Customers%20and%20Suppliers) This note discusses customer and supplier concentration, highlighting reliance on a few major suppliers - No single customer contributed **over 10% of total sales** for the three months ended March 31, 2019 or 2018[107](index=107&type=chunk) - Three major suppliers accounted for **80%, 9%, and 4% of total purchases** for the three months ended March 31, 2019[108](index=108&type=chunk) [(19) Concentration of Credit Risk](index=29&type=section&id=(19)%20Concentration%20of%20Credit%20Risk) This note addresses credit risk related to cash balances exceeding deposit insurance coverage in the PRC - Cash balances exceeding the PRC deposit insurance coverage of **RMB500,000** amounted to **RMB16,224,788 (US$2,409,562)** as of March 31, 2019[109](index=109&type=chunk) - The Company's U.S. bank accounts are fully covered by FDIC insurance[109](index=109&type=chunk) [(20) Risks and Uncertainties](index=29&type=section&id=(20)%20Risks%20and%20Uncertainties) This note outlines various operational and external risks, including competition, liquidity, and foreign currency - The Company faces substantial risks from intense industry competition, financing/liquidity requirements, rapidly changing customer demands, foreign currency exchange rates, and operating in the PRC under its various laws and restrictions[110](index=110&type=chunk) [(21) Recent Accounting Pronouncements](index=29&type=section&id=(21)%20Recent%20Accounting%20Pronouncements) This note discusses the company's evaluation of new accounting standards, specifically ASU No. 2016-13 - The Company is evaluating the impact of ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326)," effective for fiscal years beginning after December 15, 2019[111](index=111&type=chunk) [(22) Subsequent Event](index=29&type=section&id=(22)%20Subsequent%20Event) This note reports on events occurring after the balance sheet date that may require disclosure [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and results of operations for Q1 2019 compared to Q1 2018 [Cautionary Notice Regarding Forward-Looking Statements](index=30&type=section&id=Cautionary%20Notice%20Regarding%20Forward-Looking%20Statements) This section advises readers that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements subject to various assumptions, risks, and uncertainties, including general economic conditions, growth management, financing, and cash requirements[115](index=115&type=chunk) - The Company assumes no obligation to update forward-looking statements, except as required by federal securities laws[115](index=115&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, cost of sales, gross loss, and net loss - Revenue for Q1 2019 increased by **824.18% to $17,450,292**, primarily due to increased sales volume of CMP and tissue paper products[117](index=117&type=chunk) - Net loss decreased by **33.37% to $2,722,595** in Q1 2019 compared to Q1 2018[141](index=141&type=chunk) [Revenue of Offset Printing Paper, Corrugating Medium Paper and Tissue Paper Products](index=31&type=section&id=Revenue%20of%20Offset%20Printing%20Paper,%20Corrugating%20Medium%20Paper%20and%20Tissue%20Paper%20Products) This section details revenue performance across paper product categories, highlighting growth drivers and average selling prices | Metric | Q1 2019 | Q1 2018 | Change ($) | Change (%) | | :-------------------------------------- | :------------ | :------------ | :------------ | :--------- | | Total Revenue (Paper Products) | $17,450,292 | $1,888,194 | $15,562,098 | 824.18% | | Total Quantity Sold (Paper Products) | 35,321 tonnes | 3,302 tonnes | 32,019 tonnes | 969.69% | | CMP Revenue | $15,590,011 | $1,559,566 | $14,030,445 | 899.64% | | Tissue Paper Products Revenue | $1,860,281 | $0 | $1,860,281 | N/A | | Offset Printing Paper Revenue | $0 | $328,628 | $(328,628) | -100.00% | - Revenue growth was driven by recovery from a Q1 2018 production suspension and the commercial launch of the PM8 tissue paper production line in December 2018[119](index=119&type=chunk)[128](index=128&type=chunk) Average Selling Price (ASP) by Product | Product | Q1 2019 ASP ($/tonne) | Q1 2018 ASP ($/tonne) | Change ($/tonne) | Change (%) | | :---------------------- | :---------- | :---------- | :--------- | :--------- | | Regular CMP | $465 | $543 | $(78) | -14.36% | | Light-Weight CMP | $453 | $521 | $(68) | -13.05% | | Offset Printing Paper | $0 | $867 | $(867) | -100.00% | | Tissue Paper Products | $1,160 | $0 | $1,160 | N/A | [Cost of Sales](index=35&type=section&id=Cost%20of%20Sales) This section analyzes total cost of sales and average unit costs for paper products, noting changes in raw material prices | Metric | Q1 2019 | Q1 2018 | Change ($) | Change (%) | | :---------------- | :------------- | :------------- | :------------ | :--------- | | Total Cost of Sales | $17,642,758 | $2,583,502 | $15,059,256 | 582.90% | | CMP Cost of Sales | $15,816,086 | $2,130,823 | $13,685,263 | 642.25% | | Average Cost of Sales per Tonne for CMP | $469 | $729 | $(260) | -35.67% | - The average unit purchase cost of recycled paper board decreased by **25.54% from $325/tonne in Q1 2018 to $242/tonne in Q1 2019**[134](index=134&type=chunk) - Electricity and gas accounted for approximately **9% and 10.2% of total sales in Q1 2019**, respectively, compared to **6% and 9.5% in Q1 2018**[135](index=135&type=chunk) [Gross Loss](index=37&type=section&id=Gross%20Loss) This section discusses the company's gross loss and the improvement in gross profit margin for paper products | Metric | Q1 2019 | Q1 2018 | Change ($) | Change (%) | | :-------- | :----------- | :----------- | :--------- | :--------- | | Gross Loss | $(192,466) | $(695,308) | $502,842 | -72.32% | - The overall gross profit margin for paper products improved by **35.72 percentage points**, from **-36.82% in Q1 2018 to -1.10% in Q1 2019**[136](index=136&type=chunk) - Gross profit margin for regular CMP improved from **-20.23% to -0.38%**, and for light-weight CMP from **-59.46% to -5.35%**[137](index=137&type=chunk) [Selling, General and Administrative Expenses](index=38&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) This section explains changes in selling, general, and administrative expenses, primarily due to lower repair costs | Metric | Q1 2019 | Q1 2018 | Change ($) | Change (%) | | :-------- | :----------- | :----------- | :--------- | :--------- | | SG&A Expenses | $2,981,473 | $3,813,794 | $(832,321) | -21.82% | - The decrease was mainly due to lower repair and maintenance costs compared to the production suspension period in 2018[139](index=139&type=chunk) [Loss from Operations](index=38&type=section&id=Loss%20from%20Operations) This section presents the company's operating loss and its change compared to the prior year period | Metric | Q1 2019 | Q1 2018 | Change ($) | Change (%) | | :-------------- | :----------- | :----------- | :--------- | :--------- | | Operating Loss | $(3,173,939) | $(4,519,478) | $1,345,539 | -29.77% | [Other Income and Expenses](index=38&type=section&id=Other%20Income%20and%20Expenses) This section details other income and expenses, specifically highlighting the decrease in interest expense | Metric | Q1 2019 | Q1 2018 | Change ($) | Change (%) | | :-------------- | :----------- | :----------- | :--------- | :--------- | | Interest expense | $255,269 | $403,811 | $(148,542) | -36.79% | - The decrease in interest expense reflects a reduction in total interest-bearing loans from **$27,257,836 in Q1 2018 to $16,247,123 in Q1 2019**[140](index=140&type=chunk) [Net Loss](index=38&type=section&id=Net%20Loss) This section reports the company's net loss and its reduction compared to the prior year period | Metric | Q1 2019 | Q1 2018 | Change ($) | Change (%) | | :-------- | :----------- | :----------- | :--------- | :--------- | | Net Loss | $(2,722,595) | $(4,086,276) | $1,363,681 | -33.37% | [Accounts Receivable](index=38&type=section&id=Accounts%20Receivable) This section provides the net accounts receivable balance and the company's typical collection period | Metric | March 31, 2019 | December 31, 2018 | Change ($) | Change (%) | | :---------------- | :------------- | :---------------- | :----------- | :--------- | | Net accounts receivable | $2,409,458 | $2,876,632 | $(467,174) | -16.24% | - The Company typically collects accounts receivable within **30 days of delivery**[141](index=141&type=chunk) [Inventories](index=39&type=section&id=Inventories) This section details the total inventory balance and the increase in recycled paper board inventory | Metric | March 31, 2019 | December 31, 2018 | Change ($) | Change (%) | | :---------------- | :------------- | :---------------- | :---------- | :--------- | | Total Inventories | $4,156,848 | $2,923,516 | $1,233,332 | 42.19% | | Recycled paper board | $1,423,675 | $412,317 | $1,011,358 | 245.29% | - The increase in recycled paper board inventory was due to rebuilding stock after a reduction in December 2018 to manage price volatility[143](index=143&type=chunk) [Accounts Payable and Notes Payable](index=39&type=section&id=Accounts%20Payable%20and%20Notes%20Payable) This section discusses the combined balance of accounts payable and notes payable, noting bank acceptance note repayments | Metric | March 31, 2019 | December 31, 2018 | Change ($) | Change (%) | | :-------------------------- | :------------- | :---------------- | :----------- | :--------- | | Accounts payable and notes payable | $1,647,286 | $4,271,670 | $(2,624,384) | -61.44% | | Notes payable | $0 | $3,642,616 | $(3,642,616) | -100.00% | - The significant decrease was primarily due to the payment of **$3,642,616** in bank acceptance notes in January 2019[145](index=145&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet obligations, covering working capital, cash flows, and debt - The net working capital deficit improved to **$5,006,539** as of March 31, 2019, from **$5,475,395** at December 31, 2018[147](index=147&type=chunk) - Management expects improved cash generation and working capital conditions with the new PM8 tissue paper production line[149](index=149&type=chunk) - The Company's debt-asset ratio was **14.1%** as of March 31, 2019, significantly lower than the China industry average of **55.91%**[150](index=150&type=chunk) [Overview](index=40&type=section&id=Overview) This section provides an overview of the company's net working capital deficit and total current liabilities | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------- | :------------- | :---------------- | | Net working capital deficit | $(5,006,539) | $(5,475,395) | | Total current liabilities | $20,411,723 | $29,634,267 | - The decrease in current liabilities was mainly due to the repayment of bank acceptance notes[148](index=148&type=chunk) [Renewal of operating lease](index=40&type=section&id=Renewal%20of%20operating%20lease) This section details the extension of the industrial building lease with a related party - The lease for Industrial Buildings with related party Hebei Fangsheng was extended for another **four years**, with an annual rental payment of approximately **$149,060**[151](index=151&type=chunk) [Capital Expenditure Commitment as of March 31, 2019](index=40&type=section&id=Capital%20Expenditure%20Commitment%20as%20of%20March%2031,%202019) This section outlines capital expenditure commitments and their expected financing sources - Capital expenditure commitments totaled approximately **$2 million ($2,378,958)** as of March 31, 2019, mainly for industrial building improvements[99](index=99&type=chunk)[152](index=152&type=chunk) - These commitments are expected to be financed by bank loans and cash flows from operations[152](index=152&type=chunk) [Cash and Cash Equivalents](index=40&type=section&id=Cash%20and%20Cash%20Equivalents) This section reports total cash, cash equivalents, and restricted cash, explaining the net decrease | Metric | March 31, 2019 | December 31, 2018 | | :---------------------------------------------- | :------------- | :---------------- | | Cash, Cash Equivalents and Restricted Cash | $2,625,059 | $12,117,425 | | Net Decrease in Cash and Cash Equivalents | $(9,492,366) | $(4,301,354) | - The significant decrease was attributable to net cash used in operating activities (**$3,052,152**) and financing activities (**$5,366,166**)[153](index=153&type=chunk) [Net cash used in investing activities](index=42&type=section&id=Net%20cash%20used%20in%20investing%20activities) This section details cash outflows from investing activities, primarily for industrial building improvements | Metric | Q1 2019 | Q1 2018 | | :-------------------------------- | :----------- | :----------- | | Net cash used in investing activities | $(1,415,761) | $(707,162) | - Expenditures were mainly for improvement of industrial buildings[156](index=156&type=chunk) [Net cash provided by financing activities](index=42&type=section&id=Net%20cash%20provided%20by%20financing%20activities) This section explains cash flows from financing activities, highlighting the impact of bank loan repayments | Metric | Q1 2019 | Q1 2018 | | :---------------------------------------------- | :----------- | :----------- | | Net Cash (Used in) Provided by Financing Activities | $(5,366,166) | $791,503 | - The shift from cash provided to cash used was mainly attributable to repayment of bank loans[157](index=157&type=chunk) - Short-term bank loans decreased from **$11,802,075 (Dec 31, 2018) to $6,683,003 (March 31, 2019)** due to repayments and new loans[158](index=158&type=chunk) [Shareholder Loans](index=43&type=section&id=Shareholder%20Loans) This section details outstanding loans from the CEO and their extended repayment terms | Metric | March 31, 2019 | December 31, 2018 | | :---------------------- | :------------- | :---------------- | | Total loans due to CEO (Mr. Zhenyong Liu) | $2,227,668 | $2,185,569 | | Accrued interest to CEO | $653,574 | $617,454 | - A **$2,227,668** loan from Mr. Zhenyong Liu was extended to **July 12, 2021**[168](index=168&type=chunk) [Critical Accounting Policies and Estimates](index=45&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section describes key accounting policies and significant management estimates crucial to financial statements [Revenue Recognition Policy](index=45&type=section&id=Revenue%20Recognition%20Policy) This section outlines the criteria for recognizing revenue from the sale of goods - Revenue is recognized when goods are delivered, a formal arrangement exists, the price is fixed, no other significant obligations exist, and collectability is reasonably assured[173](index=173&type=chunk) [Long-Lived Assets](index=45&type=section&id=Long-Lived%20Assets) This section describes the company's policy for evaluating and recognizing impairment of long-lived assets - The Company evaluates the recoverability of long-lived assets when events or circumstances indicate potential impairment, writing down assets to fair value if undiscounted cash flows are less than carrying value[174](index=174&type=chunk) - No impairment evaluation was required for the three months ended March 31, 2019 or 2018[174](index=174&type=chunk) [Foreign Currency Translation](index=45&type=section&id=Foreign%20Currency%20Translation) This section explains the methodology for translating financial statements of foreign operations into USD - The functional currency for PRC operating companies is RMB; assets and liabilities are translated to USD using current exchange rates, while revenues and expenses use average rates[175](index=175&type=chunk) [Off-Balance Sheet Arrangements](index=45&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses significant off-balance sheet arrangements, specifically a loan guarantee for a major supplier - The Company guarantees a **$4,603,846** long-term bank loan for Baoding Huanrun Trading Co., a major supplier, which could materially adversely affect the Company if the supplier becomes insolvent[176](index=176&type=chunk) [Recent Accounting Pronouncements](index=45&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the company's assessment of recently issued accounting standards - The Company is evaluating the impact of ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326)," effective for fiscal years beginning after December 15, 2019[177](index=177&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section analyzes the company's exposure to market risks, including foreign exchange fluctuations and inflation [Foreign Exchange Risk](index=46&type=section&id=Foreign%20Exchange%20Risk) This section discusses the company's exposure to fluctuations in the RMB/USD exchange rate and its potential impact - The Company is exposed to foreign exchange risk due to most revenues, costs, and assets being denominated in RMB, while the reporting currency is USD[178](index=178&type=chunk) - RMB depreciation against the USD would negatively impact reported USD revenues, earnings, and assets[178](index=178&type=chunk) - The Company has not entered into any hedging transactions to reduce foreign exchange risk[178](index=178&type=chunk) [Inflation](index=46&type=section&id=Inflation) This section addresses the potential impact of inflation on the company's operating results and financial position - Significant inflation could adversely affect operating results if selling prices do not keep pace with rising costs, impacting gross margins and expenses[179](index=179&type=chunk) - Inflation in China has not had a material impact on the Company's financial position or results of operations to date[179](index=179&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports on internal control over financial reporting - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2019[180](index=180&type=chunk) - There were no material changes to the internal control over financial reporting during the quarter ended March 31, 2019[181](index=181&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings for the period [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The risk factors for Q1 2019 do not materially differ from those outlined in the Company's 2018 Annual Report on Form 10-K - Information about risk factors does not materially differ from the 2018 Annual Report on Form 10-K[182](index=182&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds for the period [Item 3. Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities for the period [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations [Item 5. Other Information](index=47&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various certifications and XBRL documents - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2) and XBRL Instance, Schema, Calculation, Label, Presentation, and Definition Documents (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF)[182](index=182&type=chunk) SIGNATURES This section includes the official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the report - The report was signed by Zhenyong Liu, Chief Executive Officer, and Jing Hao, Chief Financial Officer, on May 9, 2019[184](index=184&type=chunk)

IT Tech Packaging, Inc. (NYSE:ITP) Q4 2018 Earnings Conference Call March 8, 2019 8:00 AM ET Company Participants Dan McCarron - Weitian Investor Relations Jing Hao - CFO Conference Call Participants Operator Hello, ladies and gentlemen, and welcome to participate in IT Tech Packaging's Fourth Quarter and Fiscal Year 2018 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded today. [Operator Instructions]. Joining us today are Mr. Zhenyong Liu, IT Tech Pac ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________to ______________ Commission file number 001-34577 IT Tech Packaging, Inc. (Exact name of registrant as specified in its charter) Nevada 20-4158835 St ...