Tantech Holdings(TANH) - 2025 Q2 - Quarterly Report

Financial Position - As of June 30, 2025, the Group has approximately $32.3 million in cash and cash equivalents, down from $35.0 million as of December 31, 2024[33] - The fair value of warrant liabilities as of June 30, 2025, is $417,000, a decrease from $2,000,000 as of December 31, 2024[31] - The Group's convertible note measured at fair value is $198,000 as of December 31, 2024, with a change in fair value of $150,000 for the six months ended June 30, 2025[31] - The Group's financial instruments, including cash and cash equivalents, approximate their recorded values due to short-term maturities[28] - As of June 30, 2025, approximately $32.3 million was deposited with financial institutions in the PRC, with $32.2 million not covered by deposit insurance[60] - The Group's long-term investments increased to $103,369,663 as of June 30, 2025, up from $22,786,158 at the end of 2024, primarily due to an equity acquisition of 85% in Xintong International valued at $80,151,868[90] - As of June 30, 2025, the total loan payable to third parties was $2,199,860, a decrease from $3,250,734 as of December 31, 2024[97] Revenue and Sales - Total revenue for the six months ended June 30, 2025, was $20,527,588, a decrease of 4.5% from $21,484,736 in the same period of 2024[134] - Revenue from China was $20,485,348, down from $20,882,575, reflecting a decline of 1.9% year-over-year[134] - For the six months ended June 30, 2025, three major customers accounted for approximately 27%, 26%, and 25% of the Group's total sales, respectively[64] - The Group's revenues from continuing operations are primarily derived from selling products, recognized at the point of sale[46] Accounts Receivable and Credit Risk - The Group's accounts receivable and financing receivables are subject to credit loss provisions, with ongoing evaluations to mitigate credit risk[34][36] - As of June 30, 2025, accounts receivable totaled $42,994,697, with an allowance for credit losses of $2,288,446, resulting in net accounts receivable of $40,706,251[83] - As of June 30, 2025, three customers accounted for approximately 29%, 29%, and 28% of the Group's accounts receivable balance[65] - The Group's financing receivables are primarily collateralized by pledged receivables from large state-owned entities and well-established companies[36] - The Group's financial instruments are subject to significant concentrations of credit risk, primarily from cash and restricted cash[60] Inventory and Valuation - The Group's inventory is valued at the lower of cost or net realizable value, with periodic reviews for potential markdowns[37] - The Group's significant accounting estimates include provisions for credit losses, contingent liabilities, and inventory valuation[22] Acquisitions and Disposals - The Group acquired 85% equity interest in Xintong International for a total consideration of $68,127,525 (RMB 488,038,338) on April 25, 2025[75] - The acquisition was structured in three tranches, with the first tranche payment of $46,861,913 (RMB 335,700,000) settled by transferring financing receivables[75] - The total net assets acquired amounted to $80,150,029, with a 15% equity value attributed to non-controlling interest of $12,022,504[78] - The Group sold its Electric Vehicle business for a final consideration of $83,757 (RMB 600,000), resulting in a gain of $3,544,650 for the six months ended June 30, 2025[79] - The company closed the sale of its Electric Vehicle business on May 15, 2025, resulting in a single operating segment as defined by ASC 280[132] Losses and Gains - The loss from discontinued operations for the six months ended June 30, 2025, was $60,874, a significant improvement from a loss of $662,522 in the same period of 2024[81] - The Group recognized a gain of $2,314,342 (RMB 16,785,000) from the disposal of financing receivables, which had a fair value of $46,861,913 (RMB 335,700,000)[84] - The Company recognized a loss from extinguishment of debt amounting to $31,969 for the six months ended June 30, 2025, after settling $100,000 of principal by issuing shares[98] - The Company recognized a loss on change in fair value of the convertible note of $150,000 for the six months ended June 30, 2025[106] Shareholder Information - As of June 30, 2025, the company had an aggregate of 1,424,388 common shares issued and outstanding, an increase from 1,132,658 shares as of December 31, 2024[116] - The company issued an aggregate of 192,059 common shares during the six months ended June 30, 2025, with conversion prices ranging from $1.2 to $1.8[118] - The company completed a private placement on April 22, 2024, raising gross proceeds of $2,100,000, with net proceeds of $1,722,500 after offering costs[120] Related Party Transactions - The balances due to related parties totaled $40,823 as of June 30, 2025, with Mr. Zhengyu Wang and his affiliates being the primary creditors[110] Market and Economic Environment - The Group's business may be influenced by the political, economic, and legal environments in the PRC, which could adversely affect operating results[61] - The average US$:RMB exchange rate for the six months ended June 30, 2025, was 7.2526[52] Subsequent Events - The Group evaluated subsequent events and found no additional events requiring recognition or disclosure beyond those reported[138]