IT Tech Packaging, Inc. is a leading manufacturer of corrugating medium paper and other paper products in China, operating through subsidiaries and a VIE with a focus on cost advantages and strategic location.

# Company Overview: IT Tech Packaging, Inc.

## Business Focus
- **Primary Operations**: Production and distribution of paper products in China, mainly conducted through a Variable Interest Entity (VIE) structure due to Chinese regulations.
- **Main Product Categories**:
  - **Corrugating Medium Paper (CMP)**: Used in manufacturing cardboard. Dominant product, accounting for approximately 99.82% of revenue in 2024.
  - **Offset Printing Paper**: Used for offset printing in publishing. Production suspended in 2024.
  - **Tissue Paper Products**: Includes toilet paper, tissues, napkins, paper towels. Production suspended in 2024.
  - **Medical Face Masks**: Non-medical and surgical masks. Launched in 2020, production suspended in 2024.

## Company Structure
- **Holding Company**: Nevada-incorporated, no direct operations.
- **Subsidiaries and VIE**:
  - **PRC Subsidiaries**: Baoding Shengde Paper Co., Ltd. and Hebei Qianrong Hebei Technology Co., Ltd.
  - **VIE**: Hebei Baoding Dongfang Paper Milling Co., Ltd.
- **Control Mechanism**: Contractual arrangements (VIE agreements) allow control over the Chinese operating entities, which are largely responsible for operations, assets, and revenues.

## Key Financial Data
- **2024 Revenue**: approximately **$75.84 million**, down **12.37%** from $86.55 million in 2023.
- **Net Income**: Not explicitly provided, but significant portion of revenue generated from CMP sales.
- **Assets**:
  - Total assets as of December 31, 2024: **$170.57 million**.
  - The VIE accounts for **94.81%** of total assets in 2023 and **96.07%** in 2024.
- **Liabilities**:
  - Total liabilities as of December 31, 2024: **$16.98 million**.
- **Employees**:
  - Approximately **383 full-time employees** as of December 31, 2024.

## Customer Base
- **Major Customers**: Top 10 customers in 2024 each contributed more than 5% of sales.
- **2024 Sales to Top 10 Customers**: approximately **$48.24 million**, representing **63.59%** of total revenue.
  - Key customers are primarily located in Hebei Province and Shandong Province.

## Manufacturing and Production
- **Production Lines (2024)**:
  - **6 operational lines**: including the flagship PM6 (CMP with 360,000 tonnes/year capacity).
  - **Lines under renovation or suspended**: PM1 (light-weight CMP), PM2 (offset printing paper), PM3 (offset printing paper), PM4 and PM5 (digital photo paper), PM8 and PM9 (tissue paper), and PM10 (tissue paper, under construction).
- **Capacity**:
  - Total designed capacity for CMP: **360,000 tonnes/year**.
  - Utilization rates for CMP lines decreased slightly but remain significant for the company’s production.

## Regulatory and Market Context
- Operates within China’s heavily regulated paper industry, with environmental permits and licences.
- Industry is concentrated in eastern provinces like Shandong, Guangdong, Jiangsu, Zhejiang, and Hebei.
- Industry growth in China: 2.4% annual increase in output (2014–2023); domestic consumption balanced with rising exports.
- Company emphasizes cost advantages and proximity to major markets (Beijing, Tianjin).

## Summary
- **Nature of Business**: Manufacturing of mainly corrugating medium paper with supplementary production of offset printing, tissue, and face masks.
- **Sales**: Predominantly to local Chinese companies, mainly in Hebei and Shandong.
- **Employees**: 383 full-time staff.
- **Revenue**: ~$75.84 million in 2024.
- **Assets**: Nearly $171 million, with the VIE constituting over 96%.
- **Customer Concentration**: 10 major customers account for over 63% of revenue.
- **Production Capacity**: 6 lines actively producing, with additional lines under renovation and construction.
- **Market Position**: One of the leading paper producers in Hebei Province with cost and geographical advantages.

IT Tech Packaging, Inc. is a Nevada holding company focused on producing and distributing paper products and medical face masks in China.

# Company Overview: IT Tech Packaging, Inc.

## Business Summary

IT Tech Packaging, Inc. (the "Company" or "ITP") is a Nevada holding company primarily engaged in the production and distribution of paper products and medical face masks in China. The Company operates through its subsidiaries and a variable interest entity (VIE), Hebei Baoding Dongfang Paper Milling Co., Ltd. ("Dongfang Paper"). Its operations are managed through two wholly-owned subsidiaries, Baoding Shengde Paper Co., Ltd. and QianrongQianhui Hebei Technology Co., Ltd.

### Key Products

1. **Corrugating Medium Paper (CMP)**
   - **Product Usage:** Used in the manufacturing of cardboard.
   - **Production Lines:** PM1 (light-weight) and PM6 (regular).
   - **Revenue Contribution:** For the year ended December 31, 2023, CMP accounted for approximately 94.47% of total revenue and 97.06% of total production volumes.
   - **Annual Production Capacity:** PM6 production line has a designed capacity of 360,000 tonnes/year.

2. **Offset Printing Paper**
   - **Product Usage:** Utilized in the publishing industry for offset printing.
   - **Production Lines:** PM2 and PM3.
   - **Revenue Contribution:** Generated $3,215,190 with 5,573 tonnes sold for the year ended December 31, 2023.

3. **Tissue Paper Products**
   - **Product Types:** Includes toilet paper, tissues, paper napkins, and kitchen towels.
   - **Revenue Contribution:** Represented approximately 1.51% of total sales revenue for the year ended December 31, 2023.

4. **Face Masks**
   - **Product Types:** Non-medical single-use face masks and single-use surgical masks.
   - **Commercial Production:** Launched on April 29, 2020, and received a license for surgical masks in May 2021.

### Market and Operations

- **Customers:** ITP's paper products are primarily sold to customers in Hebei Province and Shandong Province. The top five customers accounted for approximately 35.53% of total revenue in 2023.
- **Revenue and Income:** As of the fiscal year ended December 31, 2023, ITP achieved net cash provided by operating activities of approximately $17.44 million. However, the text did not specify total revenue or net income figures.
- **Employees:** As of December 31, 2023, the Company has approximately 383 full-time employees.
- **Manufacturing Facilities:** ITP operates several manufacturing facilities including the Xushui Paper Mill and Xingtai Paper Mill, featuring multiple production lines for various paper products.

### Corporate Structure

- **Holding Company Model:** ITP is a holding company, with no direct operational activities and conducts business through contracts and equity interests in its subsidiaries and the VIE structure.
- **Variable Interest Entity:** Dongfang Paper is the main operating entity, with the majority of its business conducted through contractual agreements which may pose unique risks regarding control and compliance with PRC regulations.

### Regulatory Compliance

- **Chinese Regulations:** ITP is subject to PRC laws and regulations, including those governing foreign investment, environmental compliance, and labor laws. The categorization of assets and contracts under these regulations can impact the holding structure.

### Legal Proceedings

- **Ongoing Lawsuit:** In February 2022, FT Global Capital, Inc. filed a lawsuit against ITP for breach of contract relating to an agreement in April 2019. The Company is currently in the discovery phase.

Overall, IT Tech Packaging, Inc. leverages its geographic advantage and efficient production processes to remain competitive in the growing paper industry within China, while also navigating complex regulatory environments and market dynamics.

IT TECH PACKAGING, INC.

10-K / April 11, 2025

10-K / March 27, 2024

10-K / April 11, 2025

Company Overview: IT Tech Packaging, Inc.

Business Focus

Company Structure

Key Financial Data

Customer Base

Manufacturing and Production

Regulatory and Market Context

Summary