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ITP IT Tech Packaging Inc

0.22

0.01 (4.76%)

Dec 24 2024 - Closed

Delayed by 15 minutes

Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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, 2024

or

☐ TRANSITION REPORT UNDER 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
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		identification No.)

Science Park, Juli Rd, Xushui District, Baoding City

Hebei Province, The People’s Republic of China 072550

(Address of principal executive offices and Zip Code)

011 - (86) 312-8698215

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001		ITP		NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

As of August 12, 2024, there were 10,065,920 shares of the registrant’s common stock, par value $0.001, outstanding.

TABLE OF CONTENTS

Part I. - FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48

Item 4.	Controls and Procedures	48

Part II. - OTHER INFORMATION		49

Item 1.	Legal Proceedings	49

Item 1A.	Risk Factors	49

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49

Item 3.	Defaults Upon Senior Securities	49

Item 4.	Mine Safety Disclosures	49

Item 5.	Other Information	50

Item 6.	Exhibits	50

SIGNATURES		51

i

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(unaudited)

		June 30,				December 31,
		2024				2023
ASSETS

Current Assets
Cash and bank balances		$	5,144,414			$	3,918,938
Restricted cash			899,508				472,983
Accounts receivable (net of allowance for doubtful accounts of $61,000 and $11,745 as of June 30, 2024 and December 31, 2023, respectively)			2,638,219				575,526
Inventories			5,282,420				3,555,235
Prepayments and other current assets			18,246,164				18,981,290
Due from related parties			1,219,553				853,929

Total current assets			33,430,278				28,357,901

Operating lease right-of-use assets, net			476,771				528,648
Property, plant, and equipment, net			155,624,752				163,974,022
Value-added tax recoverable			1,830,425				1,883,078
Deferred tax asset non-current			-				-

Total Assets		$	191,362,226			$	194,743,649

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Short-term bank loans		$	841,893			$	423,567
Current portion of long-term loans			6,817,927				6,874,497
Lease liability			103,568				100,484
Accounts payable			-				4,991
Advance from customers			73,386				136,167
Notes payable			429,451				-
Due to related parties			731,486				728,869
Accrued payroll and employee benefits			369,565				237,842
Other payables and accrued liabilities			13,135,687				12,912,517
Income taxes payable			415,635				-

Total current liabilities			22,918,598				21,418,934

Long-term loans			4,490,094				4,503,932
Lease liability - non-current			498,718				483,866
Derivative liability			5				54

Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $21,006,676 and $20,084,995 as of June 30, 2024 and December 31, 2023, respectively)			27,907,415				26,406,786

Commitments and Contingencies

Stockholders’ Equity
Common stock, 50,000,000 shares authorized, $0.001 par value per share, 10,065,920 shares issued and outstanding as of June 30, 2024 and December, 31, 2023.			10,066				10,066
Additional paid-in capital			89,172,771				89,172,771
Statutory earnings reserve			6,080,574				6,080,574
Accumulated other comprehensive loss			(11,613,303	)			(10,555,534	)
Retained earnings			79,804,703				83,628,986

Total stockholders’ equity			163,454,811				168,336,863

Total Liabilities and Stockholders’ Equity		$	191,362,226			$	194,743,649

See accompanying notes to condensed consolidated financial statements.

1

IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(Unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023

Revenues		$	26,249,788			$	30,019,914			$	33,113,629			$	49,810,791

Cost of sales			(22,984,488	)			(28,840,056	)			(29,449,216	)			(48,907,932	)

Gross Profit			3,265,300				1,179,858				3,664,413				902,859

Selling, general and administrative expenses			(2,717,548	)			(1,323,405	)			(6,618,331	)			(3,818,767	)
Loss on impairment of assets			-				(375,136	)			-				(375,136	)

Income (Loss) from Operations			547,752				(518,683	)			(2,953,918	)			(3,291,044	)

Other Income (Expense):
Interest income			2,807				53,637				4,990				189,905
Interest expense			(211,551	)			(270,681	)			(421,841	)			(519,850	)
Gain (Loss) on derivative liability			15				(166,506	)			49				(14,409	)

Income (Loss) before Income Taxes			339,023				(902,233	)			(3,370,720	)			(3,635,398	)

Provision for Income Taxes			(416,770	)			(351,260	)			(453,563	)			(351,260	)

Net Loss			(77,747	)			(1,253,493	)			(3,824,283	)			(3,986,658	)

Other Comprehensive Loss
Foreign currency translation adjustment			(756,150	)			(9,063,695	)			(1,057,769	)			(6,560,939	)

Total Comprehensive Loss		$	(833,897	)		$	(10,317,188	)		$	(4,882,052	)		$	(10,547,597	)

Losses Per Share:

Basic and Diluted Losses per Share		$	(0.008	)		$	(0.12	)		$	(0.38	)		$	(0.40	)

Outstanding – Basic and Diluted			10,065,920				10,065,920				10,065,920				10,065,920

See accompanying notes to condensed consolidated financial statements.

2

IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(Unaudited)

		Six Months Ended
		June 30,
		2024				2023

Cash Flows from Operating Activities:
Net income		$	(3,824,283	)		$	(3,986,658	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			6,862,883				7,150,057
(Gain) Loss on derivative liability			(49	)			14,409
Loss from disposal and impairment of property, plant and equipment			-				501,934
(Recovery from) Allowance for bad debts			49,462				(830,847	)
Allowances for inventories, net			(2,948	)			-
Deferred tax			-				-
Changes in operating assets and liabilities:
Accounts receivable			(2,121,357	)			(1,674,665	)
Prepayments and other current assets			660,470				7,634,922
Inventories			(1,751,011	)			(3,940,417	)
Accounts payable			(4,974	)			127,215
Advance from customers			(62,107	)			10,567
Notes payable			430,624				-
Related parties			(369,287	)			(90,617	)
Accrued payroll and employee benefits			133,504				154,398
Other payables and accrued liabilities			928,640				743,936
Income taxes payable			416,770				(67,515	)
Net Cash Provided by Operating Activities			1,346,337				5,746,719

Cash Flows from Investing Activities:
Purchases of property, plant and equipment			(62,640	)			(5,565,713	)
Proceeds from sale of property, plant and equipment			-				-
Acquisition of land			-				-

Net Cash Used in Investing Activities			(62,640	)			(5,565,713	)

Cash Flows from Financing Activities:
Proceeds from issuance of shares and warrants, net			-				-
Proceeds from short term bank loans			844,191				860,919
Proceeds from long term loans			-				2,582,756
Repayment of bank loans			(422,095	)			(507,942	)
Payment of capital lease obligation			-				(112,136	)
Loan to a related party (net)			-				-

Net Cash Provided by Financing Activities			422,096				2,823,597

Effect of Exchange Rate Changes on Cash and Cash Equivalents			(53,792	)			(548,712	)

Net Increase in Cash and Cash Equivalents			1,652,001				2,455,891

Cash, Cash Equivalents and Restricted Cash - Beginning of Period			4,391,921				9,524,868

Cash, Cash Equivalents and Restricted Cash - End of Period		$	6,043,922			$	11,980,759

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest, net of capitalized interest cost		$	278,188			$	199,014
Cash paid for income taxes		$	36,793			$	418,775

Cash and bank balances			5,144,414				11,980,759
Restricted cash			899,508				-
Total cash, cash equivalents and restricted cash shown in the statement of cash flows			6,043,922				11,980,759

See accompanying notes to condensed consolidated financial statements.

3

IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(Unaudited)

																		Accumulated
										Additional				Statutory				Other
		Common Stock								Paid-in				Earnings				Comprehensive				Retained
		Shares				Amount				Capital				Reserve				Income (loss)				Earnings				Total

Balance at December 31, 2022			10,065,920			$	10,066			$	89,172,771			$	6,080,574			$	(7,514,540	)		$	93,575,021			$	181,323,892
Foreign currency translation adjustment																			(6,560,939	)							(6,560,939	)
Net loss																							(3,986,658	)			(3,986,658	)
Balance at June 30, 2023			10,065,920			$	10,066			$	89,172,771			$	6,080,574			$	(14,075,479	)		$	89,588,363			$	170,776,295

Balance at December 31, 2023			10,065,920			$	10,066			$	89,172,771			$	6,080,574			$	(10,555,534	)		$	83,628,986			$	168,336,863
Foreign currency translation adjustment																			(1,057,769	)							(1,057,769	)
Net loss																							(3,824,283	)			(3,824,283	)
Balance at June 30, 2024			10,065,920			$	10,066			$	89,172,771			$	6,080,574			$	(11,613,303	)		$	79,804,703			$	163,454,811

See accompanying notes to condensed consolidated financial statements.

4

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Organization and Business Background

IT Tech Packaging, Inc. (the “Company”) was incorporated in the State of Nevada on December 9, 2005, under the name “Carlateral, Inc.” Through the steps described immediately below, we became the holding company for Hebei Baoding Dongfang Paper Milling Company Limited (“Dongfang Paper”), a producer and distributor of paper products in China, on October 29, 2007.

Effective on August 1, 2018, we changed our corporate name to IT Tech Packaging, Inc.. The name change was effected through a parent/subsidiary short-form merger of IT Tech Packaging, Inc., our wholly-owned Nevada subsidiary formed solely for the purpose of the name change, with and into us. We were the surviving entity. In connection with the name change, our common stock began being traded under a new NYSE symbol, “ITP,” and a new CUSIP number, 46527C100, at such time.

On June 9, 2022, the Board of Directors of the Company approved a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-10 (the “Reverse Stock Split”). The Reverse Stock Split become effective on July 7, 2022 (the “Effective Date”), and the shares began trading on the split-adjusted basis on the NYSE American under the Company’s existing trading symbol “ITP” at market open on July 8, 2022. The new CUSIP number following the Reverse Stock Split is 46527C 209. 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.

On October 29, 2007, pursuant to an agreement and plan of merger (the “Merger Agreement”), the Company acquired DongfangZhiye Holding Limited (“Dongfang Holding”), a corporation formed on November 13, 2006 under the laws of the British Virgin Islands, and issued the shareholders of Dongfang Holding an aggregate of 7,450,497 (as adjusted for a four-for-one reverse stock split effected in November 2009) shares of our common stock, which shares were distributed pro-rata to the shareholders of Dongfang Holding in accordance with their respective ownership interests in Dongfang Holding. At the time of the Merger Agreement, Dongfang Holding owned all of the issued and outstanding stock and ownership of Dongfang Paper and such shares of Dongfang Paper were held in trust with Zhenyong Liu, Xiaodong Liu and Shuangxi Zhao, for Mr. Liu, Mr. Liu and Mr. Zhao (the original shareholders of Dongfang Paper) to exercise control over the disposition of Dongfang Holding’s shares in Dongfang Paper on Dongfang Holding’s behalf until Dongfang Holding successfully completed the change in registration of Dongfang Paper’s capital with the relevant PRC Administration of Industry and Commerce as the 100% owner of Dongfang Paper’s shares. As a result of the merger transaction, Dongfang Holding became a wholly owned subsidiary of the Company, and Dongfang Holding’s wholly owned subsidiary, Dongfang Paper, became an indirectly owned subsidiary of the Company.

Dongfang Holding, as the 100% owner of Dongfang Paper, was unable to complete the registration of Dongfang Paper’s capital under its name within the proper time limits set forth under PRC law. In connection with the consummation of the restructuring transactions described below, Dongfang Holding directed the trustees to return the shares of Dongfang Paper to their original shareholders, and the original Dongfang Paper shareholders entered into certain agreements with Baoding Shengde Paper Co., Ltd. (“Baoding Shengde”) to transfer the control of Dongfang Paper over to Baoding Shengde.

On June 24, 2009, the Company consummated a number of restructuring transactions pursuant to which it acquired all of the issued and outstanding shares of Shengde Holdings Inc., a Nevada corporation. Shengde Holdings Inc. was incorporated in the State of Nevada on February 25, 2009. On June 1, 2009, Shengde Holdings Inc. incorporated Baoding Shengde, a limited liability company organized under the laws of the PRC. Because Baoding Shengde is a wholly-owned subsidiary of Shengde Holdings Inc., it is regarded as a wholly foreign-owned entity under PRC law.

5

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

To ensure proper compliance of the Company’s control over the ownership and operations of Dongfang Paper with certain PRC regulations, on June 24, 2009, the Company entered into a series of contractual agreements (the “Contractual Agreements”) with Dongfang Paper and Dongfang Paper Equity Owners via the Company’s wholly owned subsidiary Shengde Holdings Inc. (“Shengde Holdings”) a Nevada corporation and Baoding Shengde Paper Co., Ltd. (“Baoding Shengde”), a wholly foreign-owned enterprise in the PRC with an original registered capital of $10,000,000 (subsequently increased to $60,000,000 in June 2010). Baoding Shengde is mainly engaged in production and distribution of digital photo paper and single-use face masks and is 100% owned by Shengde Holdings. Prior to February 10, 2010, the Contractual Agreements included (i) Exclusive Technical Service and Business Consulting Agreement, which generally provides that Baoding Shengde shall provide exclusive technical, business and management consulting services to Dongfang Paper, in exchange for service fees including a fee equivalent to 80% of Dongfang Paper’s total annual net profits; (ii) Loan Agreement, which provides that Baoding Shengde will make a loan in the aggregate principal amount of $10,000,000 to Dongfang Paper Equity Owners in exchange for each such shareholder agreeing to contribute all of its proceeds from the loan to the registered capital of Dongfang Paper; (iii) Call Option Agreement, which generally provides, among other things, that Dongfang Paper Equity Owners irrevocably grant to Baoding Shengde an option to purchase all or part of each owner’s equity interest in Dongfang Paper. The exercise price for the options shall be RMB1 which Baoding Shengde should pay to each of Dongfang Paper Equity Owner for all their equity interests in Dongfang Paper; (iv) Share Pledge Agreement, which provides that Dongfang Paper Equity Owners will pledge all of their equity interests in Dongfang Paper to Baoding Shengde as security for their obligations under the other agreements described in this section. Specifically, Baoding Shengde is entitled to dispose of the pledged equity interests in the event that Dongfang Paper Equity Owners breach their obligations under the Loan Agreement or Dongfang Paper fails to pay the service fees to Baoding Shengde pursuant to the Exclusive Technical Service and Business Consulting Agreement; and (v) Proxy Agreement, which provides that Dongfang Paper Equity Owners shall irrevocably entrust a designee of Baoding Shengde with such shareholder’s voting rights and the right to represent such shareholder to exercise such owner’s rights at any equity owners’ meeting of Dongfang Paper or with respect to any equity owner action to be taken in accordance with the laws and Dongfang Paper’s Articles of Association. The terms of the agreement are binding on the parties for as long as Dongfang Paper Equity Owners continue to hold any equity interest in Dongfang Paper. A Dongfang Paper Equity Owner will cease to be a party to the agreement once it transfers its equity interests with the prior approval of Baoding Shengde. As the Company had controlled Dongfang Paper since July 16, 2007 through Dongfang Holding and the trust until June 24, 2009 and continued to control Dongfang Paper through Baoding Shengde and the Contractual Agreements, the execution of the Contractual Agreements is considered as a business combination under common control.

On February 10, 2010, Baoding Shengde and the Dongfang Paper Equity Owners entered into a Termination of Loan Agreement to terminate the above- mentioned $10,000,000 Loan Agreement. Because of the Company’s decision to fund future business expansions through Baoding Shengde instead of Dongfang Paper, the $10,000,000 loan contemplated was never made prior to the point of termination. The parties believe the termination of the Loan Agreement does not in itself compromise the effective control of the Company over Dongfang Paper and its businesses in the PRC.

An agreement was also entered into among Baoding Shengde, Dongfang Paper and the Dongfang Paper Equity Owners on December 31, 2010, reiterating that Baoding Shengde is entitled to 100% of the distributable profit of Dongfang Paper, pursuant to the above- mentioned Contractual Agreements. In addition, Dongfang Paper and the Dongfang Paper Equity Owners shall not declare any of Dongfang Paper’s unappropriated earnings as dividend, including the unappropriated earnings of Dongfang Paper from its establishment to 2010 and thereafter.

On June 25, 2019, Dongfang Paper entered into an acquisition agreement with the shareholder of Tengsheng Paper Co., Ltd. (“Tengsheng Paper”), a limited liability company organized under the laws of the PRC, pursuant to which Dongfang Paper would acquire Tengsheng Paper. Full payment of the consideration in the amount of RMB320 million (approximately $45 million) was made on February 23, 2022.

QianrongQianhui Hebei Technology Co., Ltd, a wholly owned subsidiary of Shengde holding, was incorporated on July 15, 2021. It is a service provider of high quality material solutions for textile, cosmetics and paper production.

6

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company has no direct equity interest in Dongfang Paper. However, through the Contractual Agreements described above, the Company is found to be the primary beneficiary (the “Primary Beneficiary”) of Dongfang Paper and is deemed to have the effective control over Dongfang Paper’s activities that most significantly affect its economic performance, resulting in Dongfang Paper and its subsidiary, being treated as a controlled variable interest entity of the Company in accordance with Topic 810 - Consolidation of the Accounting Standards Codification (the “ASC”) issued by the FinancialAccounting Standard Board (the “FASB”). The revenue generated from Dongfang Paper and Tengsheng Paper for the three months ended June 30, 2024 and 2023 was accounted for 100% and 99.72% of the Company’s total revenue, respectively. The revenue generated from Dongfang Paper and Tengsheng Paper for the six months ended June 30, 2024 and 2023 was accounted for 100% and 99.84% of the Company’s total revenue, respectively. Dongfang Paper and Tengsheng Paper also accounted for 95.13% and 94.93% of the total assets of the Company as of June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024 and December 31, 2023, details of the Company’s subsidiaries and variable interest entities are as follows:

Name		Date of Incorporation or Establishment		Place of Incorporation or Establishment		Percentage of Ownership		Principal Activity
Subsidiary:
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		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.

However, uncertainties in the PRC legal system could cause the Company’s current ownership structure to be found to be in violation of any existing and/or future PRC laws or regulations and could limit the Company’s ability, through its subsidiary, to enforce its rights under these contractual arrangements. Furthermore, shareholders of the VIE may have interests that are different than those of the Company, which could potentially increase the risk that they would seek to act contrary to the terms of the aforementioned agreements.

In addition, if the current structure or any of the contractual arrangements were found to be in violation of any existing or future PRC law, the Company may be subject to penalties, which may include, but not be limited to, the cancellation or revocation of the Company’s business and operating licenses, being required to restructure the Company’s operations or being required to discontinue the Company’s operating activities. The imposition of any of these or other penalties may result in a material and adverse effect on the Company’s ability to conduct its operations. In such case, the Company may not be able to operate or control the VIE, which may result in deconsolidation of the VIE. The Company believes the possibility that it will no longer be able to control and consolidate its VIE will occur as a result of the aforementioned risks and uncertainties is remote.

7

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company has aggregated the financial information of Dongfang Paper in the table below. The aggregate carrying value of Dongfang Paper’s assets and liabilities (after elimination of intercompany transactions and balances) in the Company’s condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 are as follows:

The Company and its consolidated subsidiaries are not required to provide financial support to the VIE, and no creditor (or beneficial interest holders) of the VIE have recourse to the assets of Company unless the Company separately agrees to be subject to such claims. There are no terms in any agreements or arrangements, implicit or explicit, which require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE does require financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIE.

		June 30,				December 31,
		2024				2023
ASSETS

Current Assets
Cash and bank balances		$	4,603,402			$	2,807,608
Restricted cash			899,508				472,983
Accounts receivable			2,638,219				575,526
Inventories			5,282,420				3,555,235
Prepayments and other current assets			17,353,714				18,617,351
Due from related parties			287,384				289,173

Total current assets			31,064,647				26,317,876

Operating lease right-of-use assets, net			476,771				528,648
Property, plant, and equipment, net			150,495,716				158,027,099
Deferred tax asset non-current			-				-

Total Assets		$	182,037,134			$	184,873,623

LIABILITIES

Current Liabilities
Short-term bank loans		$	420,946			$	-
Current portion of long-term loans			4,993,826				2,780,014
Lease liability			103,568				100,484
Accounts payable			-				4,991
Advance from customers			73,386				136,167
Accrued payroll and employee benefits			329,583				231,568
Other payables and accrued liabilities			11,925,967				11,843,973
Income taxes payable			415,635				-

Total current liabilities			18,262,911				15,097,197

Long-term loans			2,245,047				4,503,932
Lease liability - non-current			498,718				483,866

Total liabilities		$	21,006,676			$	20,084,995

8

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(2) Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and notes required by the United States of America generally accepted accounting principles (“GAAP”) for annual financial statements are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023 of the Company, and its subsidiaries and variable interest entity (which we sometimes refer to collectively as “the Company”, “we”, “us” or “our”).

Principles of Consolidation

Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of June 30, 2024 and the results of operations for the six months ended June 30, 2024 are not necessarily indicative of the results to be expected for any future period.

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates.

Valuation of long-lived asset

The Company reviews the carrying value of long-lived assets to be held and used when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

Fair Value Measurements

The Company has adopted ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

9

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts that the Company could realize in a current market exchange. As of June 30, 2024 and December 31, 2023, the carrying value of the Company’s short term financial instruments, such as cash and cash equivalents, accounts receivable, accounts and notes payable, short-term bank loans, balance due to a related party and obligation under capital lease, approximate at their fair values because of the short maturity of these instruments; while loans from credit union and loans from a related party approximate at their fair value as the interest rates thereon are close to the market rates of interest published by the People’s Bank of China.

Management determined that liabilities created by beneficial conversion features associated with the issuance of certain warrants (see “Derivative liabilities” under Note (12)), meet the criteria of derivatives and are required to be measured at fair value. The fair value of these derivative liabilities was determined based on management’s estimate of the expected future cash flows required to settle the liabilities. This valuation technique involves management’s estimates and judgment based on unobservable inputs and is classified in level 3.

Non-Recurring Fair Value Measurements

The Company reviews long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow.

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 services. 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.

10

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(3) Restricted Cash

Out of the restricted cash, $429,451 as of June 30, 2024 was presented for the cash deposited at the Bank of Cangzhou for purpose of securing the bank acceptance notes from this bank (see Note (10)). The restriction will be lifted upon the maturity of the notes payable on July 16, 2024. Restricted cash of $470,057 and $472,983 as of June 30, 2024 and December 31, 2023 was presented for the cash deposited at the Industrial and Commercial Bank of China of Tengsheng Paper. The deposit was restricted due to the personal legal proceeding of Mr. Ping, the Legal Representative of Tengsheng Paper.

(4) Inventories

Raw materials inventory includes mainly recycled paper board and recycled white scrap paper. Finished goods include mainly products of corrugating medium paper, offset printing paper and tissue paper products. Inventories consisted of the following as of June 30, 2024 and December 31, 2023:

		June 30,				December 31,
		2024				2023
Raw Materials
Recycled paper board		$	3,462,147			$	198,744
Recycled white scrap paper			10,581				10,647
Gas			65,761				21,428
Base paper and other raw materials			180,653				142,149
			3,719,142				372,968
Semi-finished Goods			298,349				300,207
Finished Goods			1,264,929				2,885,019
Total inventory, gross			5,282,420				3,558,194
Inventory reserve			-				(2,959	)
Total inventory, net		$	5,282,420			$	3,555,235

(5) Prepayments and other current assets

Prepayments and other current assets consisted of the following as of June 30, 2024 and December 31, 2023:

		June 30,				December 31,
		2024				2023
Prepayment for purchase of materials		$	4,879,907			$	5,446,823
Value-added tax recoverable			13,268,074				13,409,459
Prepaid gas			87,028				116,372
Others			11,155				8,636
		$	18,246,164			$	18,981,290

(6) Property, plant and equipment, net

As of June 30, 2024 and December 31, 2023, property, plant and equipment consisted of the following:

		June 30,				December 31,
		2024				2023

Land use rights		$	81,000,265			$	81,504,608
Building and improvements			67,156,279				67,939,059
Machinery and equipment			157,513,260				158,629,858
Vehicles			346,054				348,209
Construction in progress			-				-
Totals			306,015,858				308,421,734
Less: accumulated depreciation and amortization			(150,391,106	)			(144,447,712	)
Property, Plant and Equipment, net		$	155,624,752			$	163,974,022

As of June 30, 2024 and December 31, 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.

11

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of June 30, 2024 and December 31, 2023, certain property, 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 Paper. Land use right of Tengsheng Paper with net value of $4,822,130 and $4,910,034, respectively, as of June 30, 2024 and December 31, 2023 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 $3,707,411 and $3,781,366, respectively, as of June 30, 2024 and December 31, 2023 was pledged for another long-term loan from credit union of Baoding Shengde. Land use right of Dongfang Paper with net value of $5,036,790 and $5,135,132, respectively, as of June 30, 2024 and December 31, 2023 was pledged for a long-term loan from credit union of Tengsheng Paper. Certain property, plant and equipment of Dongfang Paper with net values of $276,269 was pledged for a short-term loan from Bank of Cangzhou. See “Short-term bank loans” under Note (8), Loans Payable, for details of the transaction and asset collaterals.

Depreciation and amortization of property, plant and equipment was $3,381,095 and $3,463,814 for the three months ended June 30, 2024 and 2023, respectively. Depreciation and amortization of property, plant and equipment was $6,862,883 and $7,150,057 for the six months ended June 30, 2024 and 2023, respectively.

(7) Leases

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 as of June 30, 2024 and December 31, 2023.

Amortization of the Leased Equipment was $nil and $37,661 for the three months ended June 30, 2024 and 2023. Amortization of the Leased Equipment was $nil and $76,526 for the six months ended June 30, 2024 and 2023. Total interest expenses for the sale-leaseback arrangement was $nil and $2,182 for the three months ended June 30, 2024 and 2023. Total interest expenses for the sale-leaseback arrangement was $nil and $6,671 for the six months ended June 30, 2024 and 2023.

Operating lease lessor

The Company has a non-cancellable agreement to lease plant to tenant under operating lease for 1 year from November 2023 to November 2024. The lease does not contain contingent payments. The rental income of the year was paid in advance by the tenant in December 2023.

Operating lease as lessee

The Company leases space under non-cancelable operating leases for plant and production equipment. The lease does not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the lease does not contain contingent rent provisions.

The lease include option to renew in condition that it is agreed by the landlord before expiry. Therefore, the majority of renewals to extend the lease terms are not included in its right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluate the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term.

As the Company’s leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

12

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The components of the Company’s lease expense are as follows:

		Six Months Ended
		June 30, 2024
		RMB

Operating lease cost			70,158
Short-term lease cost			-
Lease cost			70,158

Supplemental cash flow information related to its operating leases was as follows for the period ended June 30, 2024:

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

		Six Months Ended
		June 30, 2024
		RMB
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflow from operating leases			-

Maturities of its lease liabilities for all operating leases are as follows as of June 30, 2024:

June 30,		Amount
2025			140,315
2026			140,315
2027			140,315
2028			140,315
2029			140,315
Thereafter			-
Total operating lease payments		$	701,577
Less: Interest			(99,291	)
Present value of lease liabilities			602,286
Less: current portion, record in current liabilities			(103,568	)
Present value of lease liabilities			498,718

The weighted average remaining lease terms and discount rates for all of its operating leases were as follows as of June 30, 2024:

		June 30,
		2024
		RMB
Remaining lease term and discount rate:
Weighted average remaining lease term (years)			4.1
Weighted average discount rate			7.56	%

13

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(8) Loans Payable

Short-term bank loans

		June 30,				December 31,
		2024				2023
Bank of Cangzhou 1		$	140,315			$	-
Bank of Cangzhou 2			280,631				-
Industrial and Commercial Bank of China (“ICBC”) Loan 1			-				2,824
ICBC Loan 2			-				70,594
ICBC Loan 3			-				350,149
ICBC Loan 4			2,806				-
ICBC Loan 5			140,316				-
ICBC Loan 6			140,316				-
ICBC Loan 7			137,509				-
Total short-term bank loans		$	841,893			$	423,567

On December 31, 2023, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $140,315 at a fixed interest rate of 5.5% per annum. The loan is secured by certain of the Company’s manufacturing equipment with net book value of $276,269 as of June 30, 2024. The loan will be due by December 30, 2024.

On December 31, 2023, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $280,631 at a fixed interest rate of 5.5% per annum. The loan will be due by December 30, 2024.

On September 15, 2023, the Company entered into a working capital loan agreement with the ICBC, with a balance of $nil and $2,824 as of June 30, 2024 and December 31, 2023, respectively. The 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 $nil and $70,594 as of June 30, 2024 and December 31, 2023, respectively. The 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 $nil and $350,149 as of June 30, 2024 and December 31, 2023, respectively. The 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 $2,806 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 11, 2025.

On June 21, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $140,316 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 21, 2025.

On June 22, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $140,316 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 22, 2025.

14

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On June 24, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $137,509 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 24, 2025.

As of June 30, 2024, there were guaranteed short-term borrowings of $nil and unsecured bank loans of $701,577. As of December 31, 2023, there were guaranteed short-term borrowings of $nil and unsecured bank loans of $423,567.

The average short-term borrowing rates for the three months ended June 30, 2024 and 2023 were approximately 4.45% and 4.83%. The average short-term borrowing rates for the six months ended June 30, 2024 and 2023 were approximately 4.46% and 4.77%.

Long-term loans

As of June 30, 2024 and December 31, 2023, long-term loans were $11,308,021 and $11,378,429, respectively.

		June 30,				December 31,
		2024				2023
Rural Credit Union of Xushui District Loan 1		$	3,506,482			$	3,528,315
Rural Credit Union of Xushui District Loan 2			2,245,047				2,259,026
Rural Credit Union of Xushui District Loan 3			1,824,101				1,835,458
Rural Credit Union of Xushui District Loan 4			2,525,678				2,541,404
Rural Credit Union of Xushui District Loan 5			1,206,713				1,214,226
Total			11,308,021				11,378,429
Less: Current portion of long-term loans			(6,817,927	)			(6,874,497	)
Long-term loans		$	4,490,094			$	4,503,932

As of June 30, 2024, the Company’s long-term debt repayments for the next coming years were as follows:

		Amount
Fiscal year
Remainder of 2024		$	6,817,927
2025			3,367,571
2026 & after			1,122,523
Total			11,308,021

On July 15, 2013, 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 and payable in various installments from December 21, 2013 to July 26, 2018. On June 21, 2018, the loan was extended for additional 5 years and was due and payable in various installments from December 21, 2018 to June 20, 2023. On August 24, 2023, the loan was extended for another 3 years and will be due and payable on August 24, 2026. The loan is secured by certain of the Company’s manufacturing equipment with net book value of $nil as of June 30, 2024 and December 31, 2023. Interest payment is due monthly and bore a rate of 7.68% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $3,506,482 and $3,528,315. Out of the total outstanding loan balance, current portion amounted was $1,963,012 and $1,269,290, which is presented as current liabilities in the consolidated balance sheet and the remaining balance of $1,543,470 and $2,259,025 is presented as non-current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

15

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On April 17, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which was due and payable in various installments from August 21, 2019 to April 16, 2021. 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 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. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $2,245,047 and $2,259,026, respectively, which are presented as non-current liabilities and current liabilities, respectively, in the consolidated balance sheet as of June 30, 2024 and December 31, 2023.

On December 12, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from June 21, 2020 to December 11, 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 December 11, 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 monthly and bore a rate of 7.56% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $1,824,101 and $1,835,458, respectively, which are presented as current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023.

On February 26, 2023, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from August 21, 2023 to February 24, 2025. The loan is secured by Dongfang Paper with its land use right as collateral for the benefit of the credit union. Interest payment is due monthly and bore a rate of 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $2,525,678 and $2,541,404. Out of the total outstanding loan balance, current portion amounted was $2,525,678 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 June 30, 2024 and December 31, 2023, respectively. The loan was fully repaid in July 2024.

On December 5, 2023, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 3 years, which was due in various installments from June 21, 2024 to December 5, 2026. The loan was guaranteed by an independent third party. Interest payment was due monthly and bore a rate of 7% per annum. As of June 30, 2024 and December 31, 2023, total outstanding loan balance was $1,206,713 and $1,214,226, respectively. Out of the total outstanding loan balance, current portion amounted $505,136 and $225,903, which is presented as current liabilities and the remaining balance of $701,577 and $988,323 is presented as non-current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

Total interest expenses for the short-term bank loans and long-term loans for the three months ended June 30, 2024 and 2023 were $211,551 and $268,499, respectively. Total interest expenses for the short-term bank loans and long-term loans for the six months ended June 30, 2024 and 2023 were $421,841 and $513,179, respectively.

(9) Related Party Transactions

Mr. Zhenyong Liu, the Company’s CEO has loaned money to Dongfang Paper for working capital purposes over a period of time. On January 1, 2013,Dongfang Paper and Mr. Zhenyong Liu renewed the three-year term loan previously entered on January 1, 2010, and extended the maturity date further to December 31, 2015. On December 31, 2015, the Company paid off the loan of $2,249,279, together with interest of $391,374 for the period from 2013 to 2015. Approximately $359,676 and $361,915 of interest were outstanding to Mr. Zhenyong Liu, which were recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

16

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On December 10, 2014, Mr. Zhenyong Liu provided a loan to the Company, amounted to $8,742,278 to Dongfang Paper for working capital purpose with an interest rate of 4.35% per annum, which was based on the primary lending rate of People’s Bank of China. The unsecured loan was provided on December 10, 2014, and would be originally due on December 10, 2017. During the year of 2016, the Company repaid $6,012,416 to Mr. Zhenyong Liu, together with interest of $288,596. In February 2018, the Company paid off the remaining balance, together with interest of $20,400. As of June 30, 2024 and December 31, 2023, approximately $42,095 and $42,357 of interest, respectively, were outstanding to Mr. Zhenyong Liu, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

On March 1, 2015, the Company entered an agreement with Mr. Zhenyong Liu which allows Dongfang Paper to borrow from the CEO an amount up to $17,201,342 (RMB120,000,000) for working capital purposes. The advances or funding under the agreement are due three years from the date each amount is funded. The loan is unsecured and carries an annual interest rate set on the basis of the primary lending rate of the People’s Bank of China at the time of the borrowing. On July 13, 2015, an unsecured amount of $4,324,636 was drawn from the facility. On October 14, 2016 an unsecured amount of $2,883,091 was drawn from the facility. In February 2018, the Company repaid $1,507,432 to Mr. Zhenyong Liu. The loan would be originally due on July 12, 2018. Mr. Zhenyong Liu agreed to extend the loan for additional 3 years and the remaining balance will be due on July 12, 2021. On November 23, 2018, the company repaid $3,768,579 to Mr. Zhenyong Liu, together with interest of $158,651. In December 2019, the company paid off the remaining balance, together with interest of 94,636. As of June 30, 2024 and December 31, 2023, the outstanding interest was $192,846 and $194,047, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

As of June 30, 2024 and December 31, 2023, total amount of loans due to Mr. Zhenyong Liu were $nil. The interest expense incurred for such related party loans were $nil for the three and six months ended June 30, 2024 and 2023. The accrued interest owing to Mr. Zhenyong Liu was approximately $594,617 and $598,319, as of June 30, 2024 and December 31, 2023, respectively, which was recorded in other payables and accrued liabilities.

In October 2022 and November 2022, the Company entered into two agreements with Mr. Zhenyong Liu, which allowed Mr. Zhenyong Liu to borrow from the Company an amount of $7,059,455 (RMB50,000,000) in total. The loans were unsecured and carried a fixed interest rate of 4.35% per annum. $4,235,673 (RMB30,000,000) was repaid by Mr. Zhengyong Liu in August 2023 and the remaining balance was repaid in December 2023. Interest income of the loan for the six months ended June 30, 2024 and 2023 were $nil and $176,847.

As of June 30, 2024 and December 31, 2023, amount due to shareholder was $727,433, which represents funds from shareholders to pay for various expenses incurred in the U.S. The amount is due on demand with interest free.

17

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(10) Notes payable

As of June 30, 2024, the Company had bank acceptance notes of $429,451 from the Cangzhou to suppliers for settling purchases of raw materials. The acceptance notes are used to essentially extend the payment of accounts payable and are issued under the banking facilities obtained from bank. The bank acceptance notes from the bank bore interest rate at nil% per annum and 0.05% of notes amount as handling change. The acceptance notes will become due and payable on July 16, 2024.

(11) Other payables and accrued liabilities

		June 30,				December 31,
		2024				2023
Accrued electricity		$	115,216			$	3,054
Value-added tax payable			68,138				696
Accrued interest to a related party			594,617				598,319
Payable for purchase of property, plant and equipment			11,054,912				11,175,858
Accrued commission to salesmen			14,869				47,040
Accrued bank loan interest			1,207,344				1,070,708
Others			80,591				16,842
Totals		$	13,135,687			$	12,912,517

(12) Derivative Liabilities

The Company analyzed the warrant for derivative accounting consideration under ASC 815, “Derivatives and Hedging, and hedging,” and determined that the instrument should be classified as a liability since the warrant becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

The Company determined its derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2024. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each warrant is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in the June 30, 2024:

		Six months ended
		June 30, 2024
Expected term		0.68 - 2.75
Expected average volatility		84% - 102%
Expected dividend yield		-
Risk-free interest rate		0.19% - 4.71%

The following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2024: Fair

Value Measurements Using Significant Observable Inputs (Level 3)

Balance at December 31, 2023		$	54
Change in fair value of derivative liability			(49	)

Balance at June 30, 2024		$	5

18

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(13) Common Stock

Issuance of common stock to investors

On January 20, 2021, the Company offered and sold to certain institutional investors an aggregate of 2,618,182 shares of common stock and 2,618,182 warrants to purchase up to 2,618,182 shares of common stock in a best-efforts public offering for gross proceeds of approximately $14.4 million. The purchase price for each share of common stock and the corresponding warrant was $5.5. The exercise price of the warrant was $5.5 per share.

On March 1, 2021, the Company offered and sold to the public investors an aggregate of 2,927,786 shares of common stock and 1,463,893 warrants to purchase up to 1,463,893 shares of common stock in a firm commitment underwritten public offering for gross proceeds of approximately $21.9 million. The purchase price for each share of common stock and accompanying warrant was $7.5. The exercise price of the warrant was $7.5 per share.

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 Split. 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.

(14) Warrants

On April 29, 2020, the Company and certain institutional investors entered into a securities purchase agreement, as amended on May 4, 2020 (the “2020 Purchase Agreement”), pursuant to which the Company agreed to sell to such investors an aggregate of 440,000 shares of common stock and warrants to purchase up to 440,000 shares of common stock in a concurrent private placement (the “May 2020 Warrants”). The exercise price of the May 2020 Warrant is $7.425 per share. These warrants become exercisable on July 23, 2020 and have a term of exercise equal to five years and six months from the date of issuance till July 23, 2025. 88,000 May 2020 Warrants were exercised in February 2021 at the exercise price of $7.425 per share and 352,000 May 2020 Warrants were outstanding as of June 30, 2024.

On January 20, 2021, the Company offered and sold to certain institutional investors an aggregate of 2,618,182 shares of common stock and 2,618,182 warrants to purchase up to 2,618,182 shares of common stock (the “January 2021 Warrants”). The January 2021 Warrants became exercisable on January 20, 2021 at an exercise price of $5.5 and will expire on January 20, 2026. 1,410,690 January 2021 Warrants were exercised in January and February of 2021 at the exercise price of $5.5 per share. 1,207,492 January 2021 Warrants were outstanding as of June 30, 2024.

On March 1, 2021, the Company offered and sold to the public investors an aggregate of 2,927,786 shares of common stock and 1,463,893 warrants to purchase up to 1,463,893 shares of common stock (the “March 2021 Warrants”). The March 2021 Warrants became exercisable on March 1, 2021 at an exercise price of $7.5 and will expire on March 1, 2026. 6,750 March 2021 Warrants were exercised in January and March 2021 at the exercise price of $7.5 per share and 1,457,143 March 2021 Warrants were outstanding as of June 30, 2024.

The Company classified warrants as liabilities and accounted for the issuance of the warrants as a derivative.

19

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A summary of stock warrant activities is as below:

		Six months ended June 30, 2024
		Number				Weight average exercise price
Outstanding and exercisable at beginning of the period			3,016,635			$	6.6907
Issued during the period			-
Exercised during the period			-
Cancelled or expired during the period			-
Outstanding and exercisable at end of the period			3,016,635			$	6.6907

The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2024.

Warrants Outstanding										Warrants Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)				Weighted Average Exercise Price				Number of Shares				Weighted Average Exercise Price
3,016,635			1.59			$	6.6907				3,016,635			$	6.6907

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at June 30, 2024 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). The intrinsic value of the warrants as of June 30, 2024 and December 31, 2023 are nil.

(15) Earnings Per Share

For the three months ended June 30, 2024 and 2023, basic and diluted net loss per share are calculated as follows:

		Three Months Ended June 30,
		2024				2023
Basic loss per share
Net loss for the period - numerator		$	(77,747	)		$	(1,253,493	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Net loss per share		$	(0.008	)		$	(0.12	)

Diluted income per share
Net income for the period - numerator		$	(77,747	)		$	(1,253,493	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Effect of dilution			-				-
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Diluted loss per share		$	(0.008	)		$	(0.12	)

20

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For the six months ended June 30, 2024 and 2023, basic and diluted net loss per share are calculated as follows:

		Six Months Ended June 30,
		2024				2023
Basic loss per share
Net loss for the period - numerator		$	(3,824,283	)		$	(3,986,658	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Net loss per share		$	(0.38	)		$	(0.40	)

Diluted loss per share
Net loss for the period - numerator		$	(3,824,283	)		$	(3,986,658	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Effect of dilution			-				-
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Diluted loss per share		$	(0.38	)		$	(0.40	)

For the three and six months ended June 30, 2024 and 2023 there were no securities with dilutive effect issued and outstanding.

(16) Income Taxes

United States

The Company may be subject to the United States of America Tax laws at a tax rate of 21%. No provision for the US federal income taxes has been made as the Company had no US taxable income for the second quarter ended June 30, 2024 and 2023, and management believes that its earnings are permanently invested in the PRC.

PRC

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%.

21

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The provisions for income taxes for three months ended June 30, 2024 and 2023 were as follows:

		Three Months Ended
		June 30,
		2024				2023
Provision for Income Taxes
Current Tax Provision U.S.		$				$	-
Current Tax Provision PRC			416,770				351,260
Deferred Tax Provision PRC			-				-
Total Provision for (Deferred tax benefit)/ Income Taxes		$	416,770			$	351,260

The provisions for income taxes for six months ended June 30, 2024 and 2023 were as follows:

		Six Months Ended
		June 30,
		2024				2023
Provision for Income Taxes
Current Tax Provision U.S.		$	36,793			$	-
Current Tax Provision PRC			416,770				351,260
Deferred Tax Provision PRC			-				-
Total Provision for (Deferred tax benefit)/ Income Taxes		$	453,563			$	351,260

In addition to the reversible future PRC income tax benefits stemming from the timing differences of items such as recognition of asset disposal gain or loss and asset depreciation, the Company was incorporated in the United States and incurred net operating losses of approximately $62,499 and $530,581 for U.S. income tax purposes for the years ended December 31, 2023 and 2022, respectively. The net operating loss carried forward may be available to reduce future years’ taxable income. These carry forwards would expire, if not utilized, during the period of 2030 through 2035. As of June 30, 2024, management believed that the realization of all the U.S. income tax benefits from these losses, which generally would generate a deferred tax asset if it can be expected to be utilized in the future, appears not more than likely due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, As of June 30, 2024 and December 31, 2023, the Company provided a 100% valuation allowance on the U.S. deferred tax asset benefit to reduce the total deferred tax asset to the amount realizable for the PRC income tax purposes. Management reviews this valuation allowance periodically and will make adjustments as warranted. A summary of the otherwise deductible (or taxable) deferred tax items is as follows:

		June 30,				December 31,
		2024				2023
Deferred tax assets (liabilities)
Depreciation and amortization of property, plant and equipment		$	17,753,892			$	16,922,756
Impairment of property, plant and equipment			581,757				585,380
Miscellaneous			648,269				135,714
Net operating loss carryover of PRC company			156,717				274,525
(Gain) Loss on asset disposal			(63,669	)			(64,065	)
Total deferred tax assets			19,076,967				17,854,310
Less: Valuation allowance			(19,076,967	)			(17,854,310	)
Total deferred tax assets, net		$	-				-

22

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the three months ended June 30, 2024 and 2023, the effective income tax rate was estimated by the Company to be 122.9% and -38.9%, respectively

		Three Months Ended
		June 30,
		2024				2023
PRC Statutory rate			25.0	%			25.0	%
Effect of different tax jurisdiction
Effect of tax and book difference			(15.4	)%			(121.4	)%
Change in valuation allowance			113.3	%			57.5	%
Effective income tax rate			122.9	%			(38.9	)%

During the six months ended June 30, 2024 and 2023, the effective income tax rate was estimated by the Company to be -13.5% and -9.7%, respectively

		Six Months Ended
		June 30,
		2024				2023
PRC Statutory rate			25.0	%			25.0	%
Effect of different tax jurisdiction
Effect of tax and book difference			(2.2	)%			(42.7	)%
Change in valuation allowance			36.3	%			8.0	%
Effective income tax rate			(13.5	)%			(9.7	)%

As of June 30, 2024, except for the one-time transition tax under the 2017 TCJA which imposes a U.S. tax liability on all unrepatriated foreign E&Ps, the Company does not believe that its future dividend policy and the available U.S. tax deductions and net operating losses will cause the Company to recognize any other substantial current U.S. federal or state corporate income tax liability in the near future. Nor does it believe that the amount of the repatriation of the VIE’s earnings and profits for purposes of paying dividends will change the Company’s position that its PRC subsidiary Baoding Shengde and the VIE, Dongfang Paper are considered or are expected to be indefinitely reinvested offshore to support our future capacity expansion. If these earnings are repatriated to the U.S. resulting in U.S. taxable income in the future, or if it is determined that such earnings are to be remitted in the foreseeable future, additional tax provisions would be required.

The Company has adopted ASC Topic 740-10-05, Income Taxes. To date, the adoption of this interpretation has not impacted the Company’s financial position, results of operations, or cash flows. The Company performed self-assessment and the Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed, which in the PRC is usually 5 years. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of June 30, 2024 and December 31, 2023, management considered that the Company had no uncertain tax positions affecting its consolidated financial position and results of operations or cash flows, and will continue to evaluate for any uncertain position in future. There are no estimated interest costs and penalties provided in the Company’s consolidated financial statements for the six months ended June 30, 2024 and December 31, 2023, respectively. The Company’s tax positions related to open tax years are subject to examination by the relevant tax authorities and the major one is the China Tax Authority.

23

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(17) Stock Incentive Plans

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 ISP”). Under the 2023 ISP, the Company has reserved a total of 1,500,000 shares of common stock for issuance as or under awards to be made to the directors, officers, employees and/or consultants of the Company and its subsidiaries.

All shares of common stock under the 2023 ISP, including shares originally authorized by equity holders and shares remaining for future issuance as of June 30, 2024, have been reserved.

(18) Commitments and Contingencies

Xushui Land Lease

The Company leases 32.95 acres of land from a local government in Xushui District, Baoding City, Hebei, China through a real estate lease with a 30- year term, which expires on December 31, 2031. The lease requires an annual rental payment of approximately $16,884 (RMB120,000). This lease is renewable at the end of the 30-year term.

June 30,		Amount
2025			16,838
2026			16,838
2027			16,838
2028			16,838
2029			16,838
Thereafter			42,095
Total operating lease payments			126,285

Sale of Headquarters Compound Real Properties

On August 7, 2013, the Company’s Audit Committee and the Board of Directors approved the sale of the land use right of the Headquarters Compound (the “LUR”), the office building and essentially all industrial-use buildings in the Headquarters Compound (the “Industrial Buildings”), and three employee dormitory buildings located within the Headquarters Compound (the “Dormitories”) to Hebei Fangsheng for cash prices of approximately $2.77 million, $1.15 million, and $4.31 million respectively. Sales of the LUR and the Industrial Buildings were completed in year 2013.

In connection with the sale of the Industrial Buildings, Hebei Fangsheng agreed to lease the Industrial Buildings back to the Company for its original use with an annual rental payment of approximately $140,698 (RMB1,000,000). The lease was recorded in lease assets and liabilities in the consolidated balance sheet as of June 30, 2024.

24

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Capital commitment

As of June 30, 2024, the Company has entered into several contracts for the purchase of paper machine of a new tissue paper production line PM10 and the improvement of Industrial Buildings. Total outstanding commitments under these contracts were $3,465,791 and $3,499,936 as of June 30, 2024 and December 31, 2023, respectively. The Company expected to pay off all the balances within 1-3 years.

Guarantees and Indemnities

The Company agreed with Baoding Huanrun Trading Co., a major supplier of raw materials, to guarantee certain obligations of this third party, and as of June 30, 2024 and December 31, 2023, the Company guaranteed its long-term loan from financial institutions amounting to $4,349,778 (RMB31,000,000) that will mature at various times in 2028. If Huanrun Trading Co., were to become insolvent, the Company could be materially adversely affected.

(19) Segment Reporting

Since March 10, 2010, Baoding Shengde started its operations and thereafter the Company manages its operations through three business operating segments: Dongfang Paper and Tengsheng Paper, which produces offset printing paper, corrugating medium paper and tissue paper, and Baoding Shengde, which produces face masks and digital photo paper. They are managed separately because each business requires different technology and marketing strategies.

The Company evaluates performance of its operating segments based on net income. Administrative functions such as finance, treasury, and information systems are centralized. However, where applicable, portions of the administrative function expenses are allocated among the operating segments based on gross revenue generated. The operating segments do share facilities in Xushui County, Baoding City, Hebei Province, China. All sales were sold to customers located in the PRC.

25

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Summarized financial information for the three reportable segments is as follows:

		Three Months Ended
		June 30, 2024
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	26,212,815			$	36,973			$	-			$	-			$	-			$	26,249,788
Gross profit			3,228,326				36,973				-				-				-				3,265,299
Depreciation and amortization			893,311				2,096,538				391,246				-				-				3,381,095
Interest income			2,088				548				170				1				-				2,807
Interest expense			90,393				45,263				72,123				3,772				-				211,551
Income tax expense(benefit)			416,770				-				-				-				-				416,770
Net income (loss)			2,202,788				(2,111,359	)			(82,396	)			(86,780	)			-				(77,747	)

		Three Months Ended
		June 30, 2023
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	29,631,400			$	344,268			$	44,246			$	-			$	-			$	30,019,914
Gross profit			1,893,087				(709,660	)			(3,569	)			-				-				1,179,858
Depreciation and amortization			996,939				2,071,666				395,209				-				-				3,463,814
Loss on impairment of assets			-				-				375,136				-				-				375,136
Interest income			47,763				844				4,486				544				-				53,637
Interest expense			144,083				53,991				72,607				-				-				270,681
Income tax expense(benefit)			351,260				-				-				-				-				351,260
Net income (loss)			937,333				(1,487,869	)			(443,841	)			(259,116	)			-				(1,253,493	)

		Six Months Ended
		June 30, 2024
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	33,039,614				74,015				-				-				-				33,113,629
Gross profit			3,590,661				73,751				-				-				-				3,664,412
Depreciation and amortization			1,882,583				4,197,079				783,221				-				-				6,862,883
Interest income			3,550				1,084				343				13				-				4,990
Interest expense			179,900				90,117				144,368				7,456				-				421,841
Income tax expense(benefit)			416,770				-				-				36,793				-				453,563
Net income (loss)			1,068,547				(4,234,116	)			(136,908	)			(521,806	)			-				(3,824,283	)

26

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

		Six Months Ended
		June 30, 2023
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	49,159,596				571,312				79,883				-				-				49,810,791
Gross profit			2,332,167				(1,422,900	)			(6,408	)			-				-				902,859
Depreciation and amortization			2,137,405				4,209,594				803,058				-				-				7,150,057
Loss from impairment and disposal of property, plant and equipment			-				-				375,136				-				-				375,136
Interest income			180,946				1,537				5,721				1,701				-				189,905
Interest expense			290,785				82,565				146,500				-				-				519,850
Income tax expense(benefit)			351,260				-				-				-				-				351,260
Net income (loss)			367,869				(3,407,989	)			(543,126	)			(403,412	)			-				(3,986,658	)

As of June 30, 2024

Dongfang

Tengsheng

Baoding

Not
Attributable

Elimination of

Enterprise-
wide,

Paper

Paper

Shengde

to Segments

Inter-segment

consolidated

Total assets

$

59,259,853

122,777,281

7,338,286

1,986,806

-

191,362,226

As of December 31, 2023

Dongfang

Tengsheng

Baoding

Not Attributable

Elimination of

Enterprise-
wide,

Paper

Paper

Shengde

to Segments

Inter-segment

consolidated

Total assets

$

57,139,592

127,734,031

8,184,902

1,685,124

-

194,743,649

27

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(20) Concentration and Major Customers and Suppliers

For the three and six months ended June 30, 2024 and 2023, the Company had no single customer contributed over 10% of total sales.

For the three months ended June 30, 2024, the Company had three major suppliers accounted for 76%, 16% and 7% of total purchases. For the three months ended June 30, 2023, the Company had three major suppliers accounted for 74%, 16% and 6% of total purchases.

For the six months ended June 30, 2024, the Company had three major suppliers accounted for 76%, 16% and 7% of total purchases. For the six months ended June 30, 2023, the Company had three major suppliers accounted for 67%, 13% and 10% of total purchases.

(21) Concentration of Credit Risk

Financial instruments for which the Company is potentially subject to concentration of credit risk consist principally of cash. The Company places its cash in reputable financial institutions in the PRC and the United States. Although it is generally understood that the PRC central government stands behind all of the banks in China in the event of bank failure, there is no deposit insurance system in China that is similar to the protection provided by the Federal Deposit Insurance Corporation (“FDIC”) of the United States as of as of June 30, 2024 and December 31, 2023. On May 1, 2015, the new “Deposit Insurance Regulations” was effective in the PRC that the maximum protection would be up to RMB500,000 ($70,158) per depositor per insured financial intuition, including both principal and interest. For the cash placed in financial institutions in the United States, the Company’s U.S. bank accounts are all fully covered by the FDIC insurance as of June 30, 2024 and December 31, 2023, while for the cash placed in financial institutions in the PRC, the balances exceeding the maximum coverage of RMB500,000 amounted to RMB36,551,963 ($5,128,804) as of June 30, 2024.

(22) Risks and Uncertainties

The Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, foreign currency exchange rates, and operating in the PRC under its various laws and restrictions.

(23) Subsequent Event

None.

28

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Cautionary Notice Regarding Forward-Looking Statements

The following discussion of the financial condition and results of operations of the Company for the periods ended June 30, 2024 and 2023 should be read in conjunction with the financial statements and the notes to the financial statements that are included elsewhere in this quarterly report.

In this quarterly report, references to “the Company,” “we,” “our” and “us” refer to IT Tech Packaging, Inc. and its PRC subsidiary and variable interest entity unless the context requires otherwise.

We make certain forward-looking statements in this report. Statements concerning our future operations, prospects, strategies, financial condition, future economic performance (including growth and earnings), demand for our products, and other statements of our plans, beliefs, or expectations, including the statements contained under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as captions elsewhere in this document, are forward-looking statements. In some cases these statements are identifiable through the use of words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “project”, “target”, “can”, “could”, “may”, “should”, “will”, “would”, and similar expressions. We intend such forward-looking statements to be covered by the safe harbor provisions contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and in Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements we make are not guarantees of future performance and are subject to various assumptions, risks, and other factors that could cause actual results to differ materially from those suggested by these forward-looking statements. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. Indeed, it is likely that some of our assumptions may prove to be incorrect. Our actual results and financial position may vary from those projected or implied in the forward-looking statements and the variances may be material. You are cautioned not to place undue reliance on such forward-looking statements. These risks and uncertainties, together with the other risks described from time to time in reports and documents that we file with the Securities and Exchange Commission (the “SEC”) should be considered in evaluating forward-looking statements. In evaluating the forward-looking statements contained in this report, you should consider various factors, including, without limitation, the following: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitably, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, and (d) whether we are able to successfully fulfill our primary requirements for cash. We assume no obligation to update forward-looking statements, except as otherwise required under federal securities laws.

Results of Operations

Comparison of the Three months ended June 30, 2024 and 2023

Revenue for the three months ended June 30, 2024 was $26,249,788, a decrease of $3,770,126, or 12.56%, from $30,019,914 for the same period in the previous year. This was mainly due to the production suspension of offset printing paper and tissue paper products in the second quarter of 2024.

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Revenue of Offset Printing Paper, Corrugating Medium Paper and Tissue Paper Products

Revenue from sales of offset printing paper, corrugating medium paper (“CMP”) and tissue paper products for the three months ended June 30, 2024 was $26,212,815, representing a decrease of $3,762,919, or 12.55%, from $29,975,734 for the second quarter of 2023. Total offset printing paper, CMP and tissue paper products sold during the three months ended June 30, 2024 amounted to 75,365 tonnes, representing a decrease of 3,271 tonnes, or 4.16%, compared to 78,636 tonnes sold in the comparable period in the previous year. Production of offset printing paper and tissue paper products was suspended due to the rising natural gas prices in the first half of 2024. It is expected that production will resume in the third quarter of 2024. The changes in revenue dollar amount and in quantity sold for the three months ended June 30, 2024 and 2023 are summarized as follows:

		Three Months Ended								Three Months Ended																Percentage
		June 30, 2024								June 30, 2023								Change in								Change
Sales Revenue		Quantity (Tonne)				Amount				Quantity (Tonne)				Amount				Quantity (Tonne)				Amount				Quantity				Amount

Regular CMP			62,813			$	21,983,621				60,063			$	21,931,330				2,750			$	52,291				4.58	%			0.24	%
Light-Weight CMP			12,552			$	4,229,194				12,877			$	4,544,190				(325	)		$	(314,996	)			(2.52	)%			(6.93	)%
Total CMP			75,365			$	26,212,815				72,940			$	26,475,520				2,425			$	(262,705	)			3.32	%			(0.99	)%
Offset Printing Paper			-			$	-				5,403			$	3,155,882				(5,403	)		$	(3,155,882	)			(100.00	)%			(100.00	)%
Tissue Paper Products			-			$	-				293			$	344,332				(293	)		$	(344,332	)			(100.00	)%			(100.00	)%
Total CMP, Offset Printing Paper and Tissue Paper Revenue			75,365			$	26,212,815				78,636			$	29,975,734				(3,271	)		$	(3,762,919	)			(4.16	)%			(12.55	)%

Monthly sales revenue for the 24 months ended June 30, 2024, are summarized below:

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The Average Selling Prices (ASPs) for our main products in the three months ended June 30, 2024 and 2023 are summarized as follows:

		Offset Printing Paper ASP				Regular CMP ASP				Light-Weight CMP ASP				Tissue Paper Products ASP
Three Months ended June 30, 2024		$	-			$	350			$	337			$	-
Three Months ended June 30, 2023		$	584			$	365			$	353			$	1,175
Decrease from comparable period in the previous year		$	(584	)		$	(15	)		$	(16	)		$	(1,175	)
Decrease by percentage			(100	)%			(4.11	)%			(4.53	)%			(100	)%

The following chart shows the month-by-month ASPs for the 24-month period ended June 30, 2024:

Corrugating Medium Paper

Revenue from CMP amounted to $26,212,815 (100.00% of the total offset printing paper, CMP and tissue paper products revenues) for the three months ended June 30, 2024, representing a decrease of $262,705, or 0.99%, from $26,475,520 for the comparable period in 2023. Production of offset printing paper and tissue paper products was suspended in the second quarter of 2024.

We sold 75,365 tonnes of CMP in the three months ended June 30, 2024 as compared to 72,940 tonnes for the same period in 2023, representing a 3.32% increase in quantity sold.

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ASP for regular CMP decreased from $365/tonne for the three months ended June 30, 2023 to $350/tonne for the three months ended June 30, 2024, representing a 4.11% decrease. ASP in RMB for regular CMP for the second quarter of 2023 and 2024 was RMB2,574 and RMB2,488, respectively, representing a 3.35% decrease. The quantity of regular CMP sold increased by 2,750 tonnes, from 60,063 tonnes in the second quarter of 2023 to 62,813 tonnes in the second quarter of 2024.

Our PM6 production line, which produces regular CMP, has a designated capacity of 360,000 tonnes /year. The utilization rates for the second quarter of 2024 and 2023 were 68.02% and 66.61%, respectively, representing an increase of 1.41%.

Quantities sold for regular CMP that was produced by the PM6 production line from July 2022 to June 2024 are as follows:

Offset printing paper

Revenue from offset printing paper was $nil for the three months ended June 30, 2024, representing a decrease of $3,155,882, or 100.00%, from $3,155,882 for the three months ended June 30, 2023. Production of offset printing paper was suspended during the second quarter of 2024.

Tissue Paper Products

Revenue from tissue paper products was $nil for the three months ended June 30, 2024, representing a decrease of $344,332, or 100.00%, from $344,332 for the three months ended June 30, 2023. Production of tissue paper products was suspended during the second quarter of 2024.

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Revenue of Face Mask

Revenue generated from selling face mask were $nil and $44,246 for the three months ended June 30, 2024 and 2023, respectively.

Cost of Sales

Total cost of sales for CMP, offset printing paper and tissue paper products for the quarter ended June 30, 2024 was $22,984,488, a decrease of $5,807,701, or 20.17%, from $28,792,189 for the comparable period in 2023. This was mainly due to the decrease in sales quantity of offset printing paper and tissue paper products and the decrease of the unit material cost of CMP products.

Cost of sales for CMP was $22,984,488 for the quarter ended June 30, 2024, as compared to $24,658,830 for the comparable period in 2023. The decrease in the cost of sales of $1,674,342 for CMP was mainly due to the decrease in average unit cost of sales of CMP, partially offset by the increase in sales volume of regular CMP. Average cost of sales per tonne for CMP decreased by 9.76%, from $338 in the second quarter of 2023 to $305 in the second quarter of 2024. The decrease in average cost of sales was mainly attributable to the lower average unit purchase costs (net of applicable value added tax) of recycled paper board in the second quarter of 2024 compared to the second quarter of 2023.

Cost of sales for offset printing paper was $nil for the quarter ended June 30, 2024, as compared to $3,079,485 for the comparable period in 2023. The production of offset printing paper was suspended in the second quarter of 2024.

Cost of sales for tissue paper products was $nil for the quarter ended June 30, 2024, as compared to $1,053,874 for the comparable period in 2023. The production of tissue paper products was suspended in the second quarter of 2024.

Changes in cost of sales and cost per tonne by product for the quarters ended June 30, 2024 and 2023 are summarized below:

		Three Months Ended								Three Months Ended																Change in
		June 30, 2024								June 30, 2023								Change in								percentage
		Cost of Sales				Cost per Tonne				Cost of Sales				Cost per Tonne				Cost of Sales				Cost per Tonne				Cost of Sales				Cost per Tone
Regular CMP		$	19,297,669			$	307			$	20,438,880			$	340			$	(1,141,211	)		$	(33	)			(5.58	)%			(9.71	)%
Light-Weight CMP		$	3,686,819			$	294			$	4,219,950			$	328			$	(533,131	)		$	(34	)			(12.63	)%			(10.37	)%
Total CMP		$	22,984,488			$	305			$	24,658,830			$	338			$	(1,674,342	)		$	(33	)			(6.79	)%			(9.76	)%
Offset Printing Paper		$	-			$	-			$	3,079,485			$	570			$	(3,079,485	)		$	(570	)			(100.00	)%			(100.00	)%
Tissue Paper Products		$	-			$	-				1,053,874			$	3,597			$	(1,053,874	)		$	(3,597	)			(100.00	)%			(100.00	)%
Total CMP, Offset Printing Paper and Tissue Paper		$	22,984,488			$	n/a			$	28,792,189			$	n/a			$	(5,807,701	)		$	n/a				(20.17	)%			n/a

Our average unit purchase costs (net of applicable value added tax) of recycled paper board in the three months ended June 30, 2024 were RMB 1,167/tonne (approximately $164/tonne), as compared to RMB 1,340/tonne (approximately $192/tonne) for the three months ended June 30, 2023. These changes (in US dollars) represent a year-over-year decrease of 14.58% for the recycled paper board. We use domestic recycled paper (sourced mainly from the Beijing-Tianjin metropolitan area) exclusively. Although we do not rely on imported recycled paper, the pricing of which tends to be more volatile than domestic recycled paper, our experience suggests that the pricing of domestic recycled paper bears some correlation to the pricing of imported recycled paper.

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The pricing trends of our major raw materials for the 24-month period from July 2022 to June 2024 are shown below:

Electricity and gas are our two main energy sources. Electricity and gas accounted for approximately 5% and 12.9% of total sales in the second quarter of 2024, respectively, compared to 5% and 14.9% of total sales in the second quarter of 2023. The monthly energy cost as a percentage of total monthly sales of our main paper products for the 24 months ended June 30, 2024 are summarized as follows:

Gross Profit (Loss)

Gross profit for the three months ended June 30, 2024 was $3,265,300 (representing 12.44% of the total revenue), representing an increase of $2,085,442, or 176.75%, from the gross profit of $1,179,858 (representing 3.93% of the total revenue) for the three months ended June 30, 2023, as a result of factors described above.

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Offset Printing Paper, CMP and Tissue Paper Products

Gross profit for offset printing paper, CMP and tissue paper products for the three months ended June 30, 2024 was $3,228,327, representing an increase of $2,044,782, or 172.77%, from the gross profit of $1,183,544 for the three months ended June 30, 2023. The increase was mainly the result of the factors discussed above.

The overall gross profit margin for offset printing paper, CMP and tissue paper products increased by 8.37 percentage points, from 3.95% for the three months ended June 30, 2023, to 12.32% for the three months ended June 30, 2024.

Gross profit margin for regular CMP for the three months ended June 30, 2024 was 12.22%, or 5.41 percentage points higher, as compared to gross profit margin of 6.81% for the three months ended June 30, 2023. Such increase was mainly due to the decrease in cost of recycled paper board, partially offset by the decrease in ASP of regular CMP in the second quarter of 2024.

Gross profit margin for light-weight CMP for the three months ended June 30, 2024 was 12.82%, or 5.68 percentage points higher, as compared to gross profit margin of 7.14% for the three months ended June 30, 2023. The increase was mainly due to the decrease in cost of recycled paper board, partially offset by the decrease of ASP of light-weight CMP in the second quarter of 2024.

Monthly gross profit margins on the sales of our CMP and offset printing paper for the 24-month period ended June 30, 2024 are as follows:

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Face Masks

Gross loss for face masks for the three months ended June 30, 2024 and 2023 were $nil and $3,568.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, 2024 were $2,717,548, an increase of $1,394,143, or 105.35% from $1,323,405 for the three months ended June 30, 2023. The increase was mainly due to the increase in depreciation of idle fixed assets during production suspension.

Income (Loss) from Operations

Operating income for the quarter ended June 30, 2024 was $547,752, an increase of $1,066,435, or 205.60%, from loss from operations of $518,683 for the quarter ended June 30, 2023. The increase in income from operations was primarily due to the increase gross profit, partially offset by the increase in selling, general and administrative expenses.

Other Income and Expenses

Interest expense for the three months ended June 30, 2024 decreased by $91,941, from $270,681 in the three months ended June 30, 2023, to $178,740. The Company had short-term and long-term interest-bearing loans, related party loans and leasing obligations that aggregated $12,149,914 as of June 30, 2024, as compared to $17,607,943 as of June 30, 2023.

Gain on derivative liability

The Company analyzed the warrant for derivative accounting consideration under ASC 815, “Derivatives and Hedging, and hedging,” and determined that the instrument should be classified as a liability. ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item. The change in fair value of derivative liability for the three months ended June 30, 2024 and 2023 was a gain of $15 and a loss of $166,506, respectively.

Net Loss

As a result and the factors discussed above, net loss was $77,747 for the quarter ended June 30, 2024, representing a decrease of loss of $1,175,746, or 93.80%, from $1,253,493 for the quarter ended June 30, 2023.

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Comparison of the Six months ended June 30, 2024 and 2023

Revenue for the six months ended June 30, 2024 was $33,113,629, representing a decrease of $16,697,162, or 33.52%, from $49,810,791 for the same period in the previous year. This was mainly due to the production suspension of CMP in January and February of 2024, and production suspension of offset printing paper and tissue paper products in the first half of 2024.

Revenue of Offset Printing Paper, Corrugating Medium Paper and Tissue Paper Products

Revenue from sales of offset printing paper, CMP and tissue paper products for the six months ended June 30, 2024 was $33,039,615, a decrease of $16,687,267, or 33.56%, from $49,726,882 for the six months ended June 30, 2023. This was mainly due to the decrease in sales volume of CMP, offset printing paper and tissue paper products, and the decrease in ASPs of CMP. Total quantities of offset printing paper, CMP and tissue paper products sold during the six months ended June 30, 2024 amounted to 94,034 tonnes, a decrease of 34,475 tonnes, or 26.83%, compared to 128,509 tonnes sold during the six months ended June 30, 2023. Total quantities of CMP and offset printing paper sold decreased by 33,991 tonnes in the six months of 2024 as compared to the same period of 2023. Production of CMP was suspended in January and February of 2024 and resumed in mid of March 2024, and production of offset printing paper and tissue paper products was suspended in the first half of 2024 due to energy price rise and Chinese New Year holiday. The production of offset printing paper and tissue paper products is expected to resume in the third quarter of 2024. The changes in revenue and quantity sold for the six months ended June 30, 2024 and 2023 are summarized as follows:

		Six Months Ended								Six Months Ended																Percentage
		June 30, 2024								June 30, 2023								Change in								Change
Sales Revenue		Quantity (Tonne)				Amount				Quantity (Tonne)				Amount				Quantity (Tonne)				Amount				Quantity				Amount

Regular CMP			78,452			$	27,734,222				101,726			$	38,399,299				(23,274	)		$	(10,665,077	)			(22.88	)%			(27.77	)%
Light-Weight CMP			15,582			$	5,305,393				20,896			$	7,604,416				(5,314	)		$	(2,299,023	)			(25.43	)%			(30.23	)%
Total CMP			94,034			$	33,039,615				122,622			$	46,003,715				(28,588	)		$	(12,964,100	)			(23.31	)%			(28.18	)%
Offset Printing Paper			-			$	-				5,403			$	3,155,882				(5,403	)		$	(3,155,882	)			(100.00	)%			(100.00	)%
Tissue Paper Products			-			$	-				484			$	567,285				(484	)		$	(567,285	)			(100.00	)%			(100.00	)%
Total CMP, Offset Printing Paper and Tissue Paper Revenue			94,034			$	33,039,615				128,509			$	49,726,882				(34,475	)		$	(16,687,267	)			(26.83	)%			(33.56	)%

ASPs for our main products in the six-month period ended June 30, 2024 and 2023 are summarized as follows:

		Offset Printing Paper ASP				Regular CMP ASP				Light-Weight CMP ASP				Tissue Paper Products ASP
Six Months Ended June 30, 2024		$	-			$	354			$	340			$	-
Six Months Ended June 30, 2023		$	584			$	377			$	364			$	1,172
Decrease from comparable period in the previous year		$	(584	)		$	(23	)		$	(24	)		$	(1,172	)
Decrease by percentage			(100	)%			(6.10	)%			(6.59	)%			(100.00	)%

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Revenue of Face Masks

Revenue generated from selling face masks were $nil and $79,883 for the six months ended June 30, 2024 and 2023.

Cost of Sales

Total cost of sales for CMP, offset printing paper and tissue paper products in the six months ended June 30, 2024 was $29,448,953, a decrease of $19,361,616, or 39.67%, from $48,810,569 for the six months ended June 30, 2023. This was mainly due to the decrease in sales quantity and the decrease in the unit material costs of CMP.

Cost of sales for CMP was $29,448,953for the six months ended June 30, 2024, as compared to $43,747,945 in the same period of 2023. The decrease in the cost of sales of $14,298,992 for CMP was mainly due to the decreases in sales volume and average unit cost of sales of CMP. Average cost of sales per tonne for CMP decreased by 12.32%, from $357 for the six months ended June 30, 2023, to $313 in the same period of 2024. This was mainly attributable to the lower average unit purchase costs (net of applicable value added tax) of recycled paper board.

Cost of sales for offset printing paper was $nil for the six months ended June 30, 2024, as compared to $3,079,485 in the same period of 2023.

Cost of sales for tissue paper products was $nil for the six months ended June 30, 2024, as compared to $1,983,139 in the same period of 2023.

Changes in cost of sales and cost per tonne by product for the six months ended June 30, 2024 and 2023 are summarized below:

		Six Months Ended								Six Months Ended
		June 30, 2024								June 30, 2023								Change in								Change in percentage
		Cost of Sales				Cost per Tonne				Cost of Sales				Cost per tonne				Cost of Sales				Cost per Tonne				Cost of Sales				Cost per Tone
Regular CMP		$	24,721,681			$	315			$	36,588,828			$	360			$	(11,867,147	)		$	(45	)			(32.43	)%			(12.50	)%
Light-Weight CMP		$	4,727,272			$	303			$	7,159,117			$	343			$	(2,431,845	)		$	(40	)			(33.97	)%			(11.66	)%
Total CMP		$	29,448,953			$	313			$	43,747,945			$	357			$	(14,298,992	)		$	(44	)			(32.68	)%			(12.32	)%
Offset Printing Paper		$	-			$	-			$	3,079,485			$	570			$	(3,079,485	)		$	(570	)			(100.00	)%			(100.00	)%
Tissue Paper Products		$	-			$	-			$	1,983,139			$	4,097			$	(1,983,139	)		$	(4,097	)			(100.00	)%			(100.00	)%
Total CMP, Offset Printing Paper and Tissue Paper Revenue		$	29,448,953			$	n/a			$	48,810,569			$	n/a			$	(19,361,616	)		$	n/a				(39.67	)%			n/a	%

Gross profit

Gross profit for the six months ended June 30, 2024 was $3,664,413 (representing 11.07% of the total revenue), representing an increase of $2,761,554, or 305.87%, from the gross profit of $902,859 (representing 1.81% of the total revenue) for the six months ended June 30, 2023. The increase was mainly due to the decrease in unit cost of materials of CMP, partially offset by the decrease in ASP of CMP.

Offset Printing Paper, CMP and Tissue Paper Products

Gross profit for offset printing paper, CMP and tissue paper products for the six months ended June 30, 2024 was $3,590,662, an increase of $2,674,349, or 291.86%, from the gross profit of $916,313 for the six months ended June 30, 2023. The increase was mainly the result of the factors discussed above.

The overall gross profit margin for offset printing paper, CMP and tissue paper products increased by 9.03 percentage points, from 1.84% for the six months ended June 30, 2023, to 10.87% for the six months ended June 30, 2024.

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Gross profit margin for regular CMP for the six months ended June 30, 2024 was 10.86%, or 6.15 percentage points higher, as compared to gross profit margin of 4.71% for the six months ended June 30, 2023. Such increase was primarily due to decrease in material costs, partially offset by the decrease in ASP of regular CMP.

Gross profit margin for light-weight CMP for the six months ended June 30, 2024 was 10.90%, or 5.04 percentage points higher, as compared to gross profit margin of 5.86% for the six months ended June 30, 2023. Such increase was primarily due to the decrease in material costs, partially offset by the decrease in ASP of light-weight CMP.

Face Masks

Gross loss for face mask for the six months ended June 30, 2024 and 2023 was $nil and $6,407, respectively.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended June 30, 2024 were $6,618,331, an increase of $2,799,564, or 73.31% from $3,818,767 for the six months ended June 30, 2023. The increase was mainly due to the increase in depreciation of idle fixed assets during production suspension.

Loss from Operations

Operating loss for the six months ended June 30, 2024 was $2,953,918, a decrease of loss of $337,126, or 10.24%, from $3,291,044 for the six months ended June 30, 2023. The decrease of loss was primarily due to the increase in gross profit, partially offset by the increase in selling, general and administrative expenses.

Other Income and Expenses

Interest expense for the six months ended June 30, 2024 decreased by $130,820, from $519,850 for the six months ended June 30, 2023, to $389,030. The Company had short-term and long-term interest-bearing loans and lease obligation that aggregated $12,149,914 as of June 30, 2024, as compared to $17,607,943 as of June 30, 2023.

Gain (Loss) on derivative liability

The Company analyzed the warrant for derivative accounting consideration under ASC 815, “Derivatives and Hedging, and hedging,” and determined that the instrument should be classified as a liability. ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item. The change in fair value of derivative liability for the six months ended June 30, 2022 and 2023 was a gain of $49 and a loss of $14,409, respectively.

Net Loss

As a result of the above, net loss was $3,824,283 for the six months ended June 30, 2024, representing a decrease of loss of $162,375, or 4.07%, from $3,986,658 for the six months ended June 30, 2023.

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Accounts Receivable

Net accounts receivable increased by $2,062,693, or 358.40%, to $2,638,219 as of June 30, 2024, as compared with $575,526 as of December 31, 2023. We usually collect accounts receivable within 30 days of delivery and completion of sales.

Inventories

Inventories consist of raw materials (accounting for 70.41% of total value of inventory as of June 30, 2024), semi-finished goods and finished goods. As of June 30, 2024, the recorded value of inventory increased by 48.58% to $5,282,420 from $3,555,235 as of December 31, 2023. As of June 30, 2024, the inventory of recycled paper board, which is the main raw material for the production of CMP, was $3,462,147, approximately $3,263,403, or 1642.01%, higher than the balance as of December 31, 2023. As a result of better control over stock turnover and volatility of recycled paper board price, inventory was kept in a minimum level as of December 2023.

A summary of changes in major inventory items is as follows:

		June 30,				December 31,
		2024				2023				$ Change				% Change
Raw Materials
Recycled paper board		$	3,462,147			$	198,744				3,263,403				1,642.01	%
Recycled white scrap paper			10,581				10,647				(66	)			(0.62	)%
Tissue base paper			21,007				21,138				(131	)			(0.62	)%
Gas			65,761				21,428				44,333				206.89	%
Mask fabric and other raw materials			159,646				121,011				38,635				31.93	%
Total Raw Materials			3,719,142				372,968				3,346,174				897.17	%

Semi-finished Goods			298,349				300,207				(1,858	)			(0.62	)%
Finished Goods			1,264,929				2,885,019				(1,620,090	)			(56.16	)%
Total inventory, gross			5,282,420				3,558,194				1,724,226				48.46	%
Inventory reserve			-				(2,959	)			2,959				(100.00	)%
Total inventory, net		$	5,282,420			$	3,555,235				1,727,185				48.58	%

Renewal of operating lease

On August 7, 2013, the Company’s Audit Committee and the Board of Directors approved the sale of the land use right of the Headquarters Compound (the “LUR”), the office building and essentially all industrial-use buildings in the Headquarters Compound (the “Industrial Buildings”), and three employee dormitory buildings located within the Headquarters Compound (the “Dormitories”) to Hebei Fangsheng for cash prices of approximately $2.77 million, $1.15 million, and $4.31 million respectively. In connection with the sale of the Industrial Buildings, Hebei Fangsheng agreed to lease the Industrial Buildings back to the Company for its original use for a term of up to three years, with an annual rental payment of approximately $140,698 (RMB1,000,000). The lease agreement was renewed in August 2022 with a term of six years with the same rental payments as provided for in the original lease agreement.

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Capital Expenditure Commitment as of June 30, 2024

On May 5, 2020, the Company announced it planned the commercial launch of a new tissue paper production line PM10 and the Company signed an agreement to purchase paper machine with paper machine supplier. The Company expected the new tissue paper production line to be launched after the completion of trial run.

As of June 30, 2024, we had approximately $3.5 million in capital expenditure commitments that were mainly related to the purchase of paper machine of PM10. The infrastructure work of PM10 is complete, while work on the related ancillary facilities is ongoing. These commitments are expected to be financed by bank loans and cash flows generated from our business operations.

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 as of June 30, 2024 and December 31, 2023.

Cash and Cash Equivalents

Our cash, cash equivalents and restricted cash as of June 30, 2024 was $6,043,922, an increase of $1,652,001, from $4,391,921 as of December 31, 2023. The increase of cash and cash equivalents for the six months ended June 30, 2024 was attributable to a number of factors including:

i. Net cash provided by operating activities

Net cash provided by operating activities was $1,346,337 for the six months ended June 30, 2024. The balance represented a decrease of cash of $4,400,382, or 76.57%, from $5,746,719 provided for the six months ended June 30, 2023. Net loss for the six months ended June 30, 2024 was $3,824,283, representing a decrease of loss of $162,375, or 4.07%, from $3,986,658 for the six months ended June 30, 2023. Changes in various asset and liability account balances throughout the six months ended June 30, 2024 also contributed to the net change in cash from operating activities in six months ended June 30, 2024. Chief among such changes is the increase of accounts receivable in the amount of $2,121,357 during the six months of 2024. There was also an increase of $1,751,011 in the ending inventory balance as of June 30, 2024 (a decrease to net cash for the six months ended June 30, 2024 cash flow purposes). In addition, the Company had non-cash expenses relating to depreciation and amortization in the amount of $6,862,883. The Company also had a net decrease of $660,470 in prepayment and other current assets (an increase to net cash) and a net increase of $692,857 in other payables and accrued liabilities and related parties (an increase to net cash), as well as an increase in income tax payable of $416,770 (an increase to net cash) during the six months ended June 30, 2024.

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ii. Net cash used in investing activities

We incurred $62,640 in net cash expenditures for investing activities during the six months ended June 30, 2024, as compared to $5,565,713 for the same period of 2023.

iii. Net cash provided by financing activities

Net cash provided by financing activities was $422,096 for the six months ended June 30, 2024, as compared to net cash provided by financing activities in the amount of $2,823,597 for the six months ended June 30, 2023.

Short-term bank loans

		June 30,				December 31,
		2024				2023
Bank of Cangzhou 1		$	140,315			$	-
Bank of Cangzhou 2			280,631				-
Industrial and Commercial Bank of China (“ICBC”) Loan 1			-				2,824
ICBC Loan 2			-				70,594
ICBC Loan 3			-				350,149
ICBC Loan 4			2,806				-
ICBC Loan 5			140,316				-
ICBC Loan 6			140,316				-
ICBC Loan 7			137,509				-
Total short-term bank loans		$	841,893			$	423,567

On December 31, 2023, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $140,315 at a fixed interest rate of 5.5% per annum. The loan is secured by certain of the Company’s manufacturing equipment with net book value of $276,269 as of June 30, 2024. The loan will be due by December 30, 2024.

On December 31, 2023, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $280,631 at a fixed interest rate of 5.5% per annum. The loan will be due by December 30, 2024.

On September 15, 2023, the Company entered into a working capital loan agreement with the ICBC, with a balance of $nil and $2,824 as of June 30, 2024 and December 31, 2023, respectively. The 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 $nil and $70,594 as of June 30, 2024 and December 31, 2023, respectively. The 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 $nil and $350,149 as of June 30, 2024 and December 31, 2023, respectively. The 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 $2,806 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 11, 2025.

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On June 21, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $140,316 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 21, 2025.

On June 22, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $140,316 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 22, 2025.

On June 24, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $137,509 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 24, 2025.

As of June 30, 2024, there were guaranteed short-term borrowings of $nil and unsecured bank loans of $701,577. As of December 31, 2023, there were guaranteed short-term borrowings of $nil and unsecured bank loans of $423,567.

The average short-term borrowing rates for the three months ended June 30, 2024 and 2023 were approximately 4.45% and 4.83%. The average short-term borrowing rates for the six months ended June 30, 2024 and 2023 were approximately 4.46% and 4.77%.

Long-term loans

As of June 30, 2024 and December 31, 2023, long-term loans were $ 11,308,021 and $11,378,429, respectively.

On July 15, 2013, 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 and payable in various installments from December 21, 2013 to July 26, 2018. On June 21, 2018, the loan was extended for additional 5 years and was due and payable in various installments from December 21, 2018 to June 20, 2023. On August 24, 2023, the loan was extended for another 3 years and will be due and payable on August 24, 2026. The loan is secured by certain of the Company’s manufacturing equipment with net book value of $nil as of June 30, 2024 and December 31, 2023. Interest payment is due monthly and bore a rate of 7.68% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $3,506,482 and $3,528,315. Out of the total outstanding loan balance, current portion amounted was $1,963,012 and $1,269,290, which is presented as current liabilities in the consolidated balance sheet and the remaining balance of $1,543,470 and $2,259,025 is presented as non-current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

On April 17, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which was due and payable in various installments from August 21, 2019 to April 16, 2021. 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 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. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $2,245,047 and $2,259,026, respectively, which are presented as non- current liabilities and current liabilities, respectively, in the consolidated balance sheet as of June 30, 2024 and December 31, 2023.

On December 12, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from June 21, 2020 to December 11, 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 December 11, 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 monthly and bore a rate of 7.56% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $1,824,101 and $1,835,458, respectively, which are presented as current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023.

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On February 26, 2023, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from August 21, 2023 to February 24, 2025. The loan is secured by Dongfang Paper with its land use right as collateral for the benefit of the credit union. Interest payment is due monthly and bore a rate of 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $2,525,678 and $2,541,404. Out of the total outstanding loan balance, current portion amounted was $2,525,678 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 June 30, 2024 and December 31, 2023, respectively. The loan was fully repaid in July 2024.

On December 5, 2023, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 3 years, which was due in various installments from June 21, 2024 to December 5, 2026. The loan was guaranteed by an independent third party. Interest payment was due monthly and bore a rate of 7% per annum. As of June 30, 2024 and December 31, 2023, total outstanding loan balance was $1,206,713 and $1,214,226, respectively. Out of the total outstanding loan balance, current portion amounted $505,136 and $225,903, which is presented as current liabilities and the remaining balance of $701,577 and $988,323 is presented as non-current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

Total interest expenses for the short-term bank loans and long-term loans for the three months ended June 30, 2024 and 2023 were $211,551 and $268,499, respectively. Total interest expenses for the short-term bank loans and long-term loans for the six months ended June 30, 2024 and 2023 were $421,841 and $513,179, respectively.

Shareholder Loans

Mr. Zhenyong Liu, the Company’s CEO has loaned money to Dongfang Paper for working capital purposes over a period of time. On January 1, 2013,Dongfang Paper and Mr. Zhenyong Liu renewed the three-year term loan previously entered on January 1, 2010, and extended the maturity date further to December 31, 2015. On December 31, 2015, the Company paid off the loan of $2,249,279, together with interest of $391,374 for the period from 2013 to 2015. Approximately $359,676 and $361,915 of interest were outstanding to Mr. Zhenyong Liu, which were recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

On December 10, 2014, Mr. Zhenyong Liu provided a loan to the Company, amounted to $8,742,278 to Dongfang Paper for working capital purpose with an interest rate of 4.35% per annum, which was based on the primary lending rate of People’s Bank of China. The unsecured loan was provided on December 10, 2014, and would be originally due on December 10, 2017. During the year of 2016, the Company repaid $6,012,416 to Mr. Zhenyong Liu, together with interest of $288,596. In February 2018, the Company paid off the remaining balance, together with interest of $20,400. As of June 30, 2024 and December 31, 2023, approximately $42,095 and $42,357 of interest, respectively, were outstanding to Mr. Zhenyong Liu, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

On March 1, 2015, the Company entered an agreement with Mr. Zhenyong Liu which allows Dongfang Paper to borrow from the CEO an amount up to $17,201,342 (RMB120,000,000) for working capital purposes. The advances or funding under the agreement are due three years from the date each amount is funded. The loan is unsecured and carries an annual interest rate set on the basis of the primary lending rate of the People’s Bank of China at the time of the borrowing. On July 13, 2015, an unsecured amount of $4,324,636 was drawn from the facility. On October 14, 2016 an unsecured amount of $2,883,091 was drawn from the facility. In February 2018, the Company repaid $1,507,432 to Mr. Zhenyong Liu. The loan would be originally due on July 12, 2018. Mr. Zhenyong Liu agreed to extend the loan for additional 3 years and the remaining balance will be due on July 12, 2021. On November 23, 2018, the company repaid $3,768,579 to Mr. Zhenyong Liu, together with interest of $158,651. In December 2019, the company paid off the remaining balance, together with interest of 94,636. As of June 30, 2024 and December 31, 2023, the outstanding interest was $192,846 and $194,047, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

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As of June 30, 2024 and December 31, 2023, total amount of loans due to Mr. Zhenyong Liu were $nil. The interest expense incurred for such related party loans were $nil for the three and six months ended June 30, 2024 and 2023. The accrued interest owing to Mr. Zhenyong Liu was approximately $594,617 and $598,319, as of June 30, 2024 and December 31, 2023, respectively, which was recorded in other payables and accrued liabilities. Mr. Zhenyong Liu, the Company’s CEO has loaned money to Dongfang Paper for working capital purposes over a period of time. On January 1, 2013,Dongfang Paper and Mr. Zhenyong Liu renewed the three-year term loan previously entered on January 1, 2010, and extended the maturity date further to December 31, 2015. On December 31, 2015, the Company paid off the loan of $2,249,279, together with interest of $391,374 for the period from 2013 to 2015. Approximately $359,676 and $361,915 of interest were outstanding to Mr. Zhenyong Liu, which were recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

On December 10, 2014, Mr. Zhenyong Liu provided a loan to the Company, amounted to $8,742,278 to Dongfang Paper for working capital purpose with an interest rate of 4.35% per annum, which was based on the primary lending rate of People’s Bank of China. The unsecured loan was provided on December 10, 2014, and would be originally due on December 10, 2017. During the year of 2016, the Company repaid $6,012,416 to Mr. Zhenyong Liu, together with interest of $288,596. In February 2018, the Company paid off the remaining balance, together with interest of $20,400. As of June 30, 2024 and December 31, 2023, approximately $42,095 and $42,357 of interest, respectively, were outstanding to Mr. Zhenyong Liu, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

On March 1, 2015, the Company entered an agreement with Mr. Zhenyong Liu which allows Dongfang Paper to borrow from the CEO an amount up to $17,201,342 (RMB120,000,000) for working capital purposes. The advances or funding under the agreement are due three years from the date each amount is funded. The loan is unsecured and carries an annual interest rate set on the basis of the primary lending rate of the People’s Bank of China at the time of the borrowing. On July 13, 2015, an unsecured amount of $4,324,636 was drawn from the facility. On October 14, 2016 an unsecured amount of $2,883,091 was drawn from the facility. In February 2018, the Company repaid $1,507,432 to Mr. Zhenyong Liu. The loan would be originally due on July 12, 2018. Mr. Zhenyong Liu agreed to extend the loan for additional 3 years and the remaining balance will be due on July 12, 2021. On November 23, 2018, the company repaid $3,768,579 to Mr. Zhenyong Liu, together with interest of $158,651. In December 2019, the company paid off the remaining balance, together with interest of 94,636. As of June 30, 2024 and December 31, 2023, the outstanding interest was $192,846 and $194,047, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

As of June 30, 2024 and December 31, 2023, total amount of loans due to Mr. Zhenyong Liu were $nil. The interest expense incurred for such related party loans were $nil for the three and six months ended June 30, 2024 and 2023. The accrued interest owing to Mr. Zhenyong Liu was approximately $594,617 and $598,319, as of June 30, 2024 and December 31, 2023, respectively, which was recorded in other payables and accrued liabilities. Mr. Zhenyong Liu, the Company’s CEO has loaned money to Dongfang Paper for working capital purposes over a period of time. On January 1, 2013,Dongfang Paper and Mr. Zhenyong Liu renewed the three-year term loan previously entered on January 1, 2010, and extended the maturity date further to December 31, 2015. On December 31, 2015, the Company paid off the loan of $2,249,279, together with interest of $391,374 for the period from 2013 to 2015. Approximately $359,676 and $361,915 of interest were outstanding to Mr. Zhenyong Liu, which were recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

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On December 10, 2014, Mr. Zhenyong Liu provided a loan to the Company, amounted to $8,742,278 to Dongfang Paper for working capital purpose with an interest rate of 4.35% per annum, which was based on the primary lending rate of People’s Bank of China. The unsecured loan was provided on December 10, 2014, and would be originally due on December 10, 2017. During the year of 2016, the Company repaid $6,012,416 to Mr. Zhenyong Liu, together with interest of $288,596. In February 2018, the Company paid off the remaining balance, together with interest of $20,400. As of June 30, 2024 and December 31, 2023, approximately $42,095 and $42,357 of interest, respectively, were outstanding to Mr. Zhenyong Liu, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

On March 1, 2015, the Company entered an agreement with Mr. Zhenyong Liu which allows Dongfang Paper to borrow from the CEO an amount up to $17,201,342 (RMB120,000,000) for working capital purposes. The advances or funding under the agreement are due three years from the date each amount is funded. The loan is unsecured and carries an annual interest rate set on the basis of the primary lending rate of the People’s Bank of China at the time of the borrowing. On July 13, 2015, an unsecured amount of $4,324,636 was drawn from the facility. On October 14, 2016 an unsecured amount of $2,883,091 was drawn from the facility. In February 2018, the Company repaid $1,507,432 to Mr. Zhenyong Liu. The loan would be originally due on July 12, 2018. Mr. Zhenyong Liu agreed to extend the loan for additional 3 years and the remaining balance will be due on July 12, 2021. On November 23, 2018, the company repaid $3,768,579 to Mr. Zhenyong Liu, together with interest of $158,651. In December 2019, the company paid off the remaining balance, together with interest of 94,636. As of June 30, 2024 and December 31, 2023, the outstanding interest was $192,846 and $194,047, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

As of June 30, 2024 and December 31, 2023, total amount of loans due to Mr. Zhenyong Liu were $nil. The interest expense incurred for such related party loans were $nil for the three and six months ended June 30, 2024 and 2023. The accrued interest owing to Mr. Zhenyong Liu was approximately $594,617 and $598,319, as of June 30, 2024 and December 31, 2023, respectively, which was recorded in other payables and accrued liabilities.

In October 2022 and November 2022, the Company entered into two agreements with Mr. Zhenyong Liu, which allowed Mr. Zhenyong Liu to borrow from the Company an amount of $7,059,455 (RMB50,000,000) in total. The loans were unsecured and carried a fixed interest rate of 4.35% per annum. $4,235,673 (RMB30,000,000) was repaid by Mr. Zhengyong Liu in August 2023 and the remaining balance was repaid in December 2023. Interest income of the loan for the six months ended June 30, 2024 and 2023 were $nil and $176,847.

As of June 30, 2024 and December 31, 2023, amount due to shareholder was $727,433, which represents funds from shareholders to pay for various expenses incurred in the U.S. The amount is due on demand with interest free.

Critical Accounting Policies and Estimates

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates. The most critical accounting policies are listed below:

Revenue Recognition Policy

The Company recognizes revenue when goods are delivered and a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist, and collectability is reasonably assured. Goods are considered delivered when the customer’s truck picks up goods at our finished goods inventory warehouse.

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Long-Lived Assets

The Company evaluates the recoverability of long-lived assets and the related estimated remaining useful lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. In such circumstances, those assets are written down to estimated fair value. Our judgments regarding the existence of impairment indicators are based on market conditions, assumptions for operational performance of our businesses, and possible government policy toward operating efficiency of the Chinese paper manufacturing industry. For the six months ended June 30, 2024 and 2023, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required. We are currently not aware of any events or circumstances that may indicate any need to record such impairment in the future.

Foreign Currency Translation

The functional currency of Dongfang Paper and Baoding Shengde is the Chinese Yuan Renminbi (“RMB”). Under ASC Topic 830-30, all assets and liabilities are translated into United States dollars using the current exchange rate at the end of each fiscal period. The current exchange rates used by the Company as of June 30, 2024 and December 31, 2023 to translate the Chinese RMB to the U.S. Dollars are 7.1268:1 and 7.0827:1, respectively. Revenues and expenses are translated using the prevailing average exchange rates at 7.1074:1 and 6.9693:1 for the six months ended June 30, 2024 and 2023, respectively. Translation adjustments are included in other comprehensive income (loss).

Off-Balance Sheet Arrangements

We were the guarantor for Baoding Huanrun Trading Co., for its long-term bank loans in an amount of $4,349,778 (RMB31,000,000), which matures at various times in 2028. Baoding Huanrun Trading Co. is one of our major suppliers of raw materials. This helps us to maintain a good relationship with the supplier and negotiate for better terms in payment for materials. If Huanrun Trading Co. were to become insolvent, the Company could be materially adversely affected. Except as aforesaid, we have no material off-balance sheet transactions.

Recent Accounting Pronouncements

In October 2021, the FASB issued ASU No. 2021-08, 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.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Foreign Exchange Risk

While our reporting currency is the US dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. All of our assets are denominated in RMB except for some cash and cash equivalents and accounts receivables. As a result, we are exposed to foreign exchange risks as our revenues and results of operations may be affected by fluctuations in the exchange rate between US dollar and RMB. If the RMB depreciates against the US dollar, the value of our RMB revenues, earnings and assets as expressed in our US dollar financial statements will decline. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.

Inflation

Although we are generally able to pass along minor incremental cost inflation to our customers, inflation such as increases in the costs of our products and overhead costs may adversely affect our operating results. We do not believe that inflation in China has had a material impact on our financial position or results of operations to date, however, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling and distribution, general and administrative expenses as a percentage of net revenues if the selling prices of our products do not increase in line with the increased costs.

Item 4. Controls and Procedures.

As required by Rule 13a-15 of the Securities Exchange Act, as amended (the “Exchange Act”), we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, which were designed to provide reasonable assurance of achieving their objectives. This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of June 30, 2024, our disclosure controls and procedures were effective at the reasonable assurance level to ensure (1) that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (2) information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes with respect to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting in the quarterly period ended June 30, 2024.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business. We are currently not a party to any legal or administrative proceedings and are not aware of any pending or threatened legal or administrative proceedings against us in all material aspects other than the following:

In February 17, 2022, FT Global Capital, Inc. (“FTG”), filed a lawsuit against the Company in the Commercial Division of New York Supreme Court (the “Court”). FTG has brought a breach of contract action against the Company to recover fees in connection with an agreement that the parties entered into in April 2019 (the “Agreement”). The Company has answered FTG’s complaint and has denied the allegations because it is the Company’s position that FTG did not fulfill its obligations under the terms of the Agreement. Discovery is continuing. The Court issued a Status Conference Order (the “Order”) dated April 15, 2024. According to the Order, the Court ordered that the Company has failed to appear and is in default, and that pursuant to the warning given in the Court’s order dated March 22, 2024, the Company’s default renders its answer subject to being stricken, and accordingly the answer of the Company was stricken. On April 18, 2024, FT Global filed a notice of motion for default judgment against the Company. The Court issued an order dated June 12, 2024, pursuant to which the plaintiff’s motion for leave to enter a default judgment against the Company was denied, without prejudice to renewal on proper pagers within 30 days of the date of this order.

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 (the “PRC Court”). On December 1, 2023, the plaintiff sought property preservation measures, requesting the PRC Court to freeze RMB3.35 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 RMB3.35 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 RMB3,320,000 to the plaintiff, and Tengsheng Paper was jointly liable for repayment.

The ultimate resolution of the proceedings may have a material adverse impact on our business, financial condition, results of operations or cash flows. Failure to settle the proceedings or other unfavorable outcomes in this proceedings could result in significant damages, additional penalties or other remedies imposed against the Company. Litigation of this kind could result in substantial costs and a diversion of our management’s attention and resources. It could also result in our reputation being harmed and our stock price could decline as a result of allegations made in the course of the proceedings, regardless of the truthfulness of the allegations.

Item 1A. Risk Factors.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Other Information.

During our fiscal quarter ended June 30, 2024, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as those terms are defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits.

(a) Exhibits

31.1		Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
31.2		Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Schema Document
101.CAL		Inline XBRL Calculation Linkbase Document
101.DEF		Inline XBRL Definition Linkbase Document
101.LAB		Inline XBRL Label Linkbase Document
101.PRE		Inline XBRL Presentation Linkbase Document
104		Cover Page Interactive Data File The cover page iXBRL tags are embedded within the inline

50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	IT TECH PACKAGING, INC.

Date: August 12, 2024	/s/ Zhenyong Liu
	Name:	Zhenyong Liu
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: August 12, 2024	/s/ Jing Hao
	Name:	Jing Hao
	Title:	Chief Financial Officer (Principal Financial Officer)

51

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Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Zhenyong Liu, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of IT Tech Packaging, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: August 12, 2024

	By:	/s/ Zhenyong Liu
		Zhenyong Liu
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jing Hao, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of IT Tech Packaging, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: August 12, 2024

	By:	/s/ Jing Hao
		Jing Hao
		Chief Financial Officer (Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of IT Tech Packaging, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Zhenyong Liu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. section 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Dated: August 12, 2024

	By:	/s/ Zhenyong Liu
		Zhenyong Liu
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of IT Tech Packaging, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jing Hao, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. section 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Dated: August 12, 2024

	By:	/s/ Jing Hao
		Jing Hao
		Chief Financial Officer (Principal Financial Officer)

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2024	Aug. 12, 2024
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Entity Information [Line Items]
Entity Registrant Name	IT TECH PACKAGING, INC.
Entity Central Index Key	0001358190
Entity File Number	001-34577
Entity Tax Identification Number	20-4158835
Entity Incorporation, State or Country Code	NV
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Contact Personnel [Line Items]
Entity Address, Address Line One	Science Park
Entity Address, Address Line Two	Juli Rd
Entity Address, Address Line Three	Xushui District
Entity Address, City or Town	Baoding City
Entity Address, Country	CN
Entity Address, Postal Zip Code	072550
Entity Phone Fax Numbers [Line Items]
City Area Code	(86)
Local Phone Number	312-8698215
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock, par value $0.001
Trading Symbol	ITP
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		10,065,920

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Current Assets
Cash and bank balances	$ 5,144,414	$ 3,918,938
Restricted cash	899,508	472,983
Accounts receivable (net of allowance for doubtful accounts of $61,000 and $11,745 as of June 30, 2024 and December 31, 2023, respectively)	2,638,219	575,526
Inventories	5,282,420	3,555,235
Prepayments and other current assets	18,246,164	18,981,290
Total current assets	33,430,278	28,357,901
Operating lease right-of-use assets, net	476,771	528,648
Property, plant, and equipment, net	155,624,752	163,974,022
Value-added tax recoverable	1,830,425	1,883,078
Deferred tax asset non-current
Total Assets	191,362,226	194,743,649
Current Liabilities
Short-term bank loans	841,893	423,567
Current portion of long-term loans	6,817,927	6,874,497
Lease liability	103,568	100,484
Accounts payable		4,991
Advance from customers	73,386	136,167
Notes payable	429,451
Accrued payroll and employee benefits	369,565	237,842
Other payables and accrued liabilities	13,135,687	12,912,517
Income taxes payable	415,635
Total current liabilities	22,918,598	21,418,934
Long-term loans	4,490,094	4,503,932
Lease liability - non-current	498,718	483,866
Derivative liability	5	54
Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $21,006,676 and $20,084,995 as of June 30, 2024 and December 31, 2023, respectively)	27,907,415	26,406,786
Commitments and Contingencies
Stockholders’ Equity
Common stock, 50,000,000 shares authorized, $0.001 par value per share, 10,065,920 shares issued and outstanding as of June 30, 2024 and December, 31, 2023.	10,066	10,066
Additional paid-in capital	89,172,771	89,172,771
Statutory earnings reserve	6,080,574	6,080,574
Accumulated other comprehensive loss	(11,613,303)	(10,555,534)
Retained earnings	79,804,703	83,628,986
Total stockholders’ equity	163,454,811	168,336,863
Total Liabilities and Stockholders’ Equity	191,362,226	194,743,649
Related Party
Current Assets
Due from related parties	1,219,553	853,929
Current Liabilities
Due to related parties	$ 731,486	$ 728,869

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Allowance for doubtful accounts (in Dollars)	$ 61,000	$ 11,745
Consolidated VIE, liabilities (in Dollars)	$ 21,006,676	$ 20,084,995
Common stock, shares authorized	50,000,000	50,000,000
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares issued	10,065,920	10,065,920
Common stock, shares outstanding	10,065,920	10,065,920

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Revenues	$ 26,249,788	$ 30,019,914	$ 33,113,629	$ 49,810,791
Cost of sales	(22,984,488)	(28,840,056)	(29,449,216)	(48,907,932)
Gross Profit	3,265,300	1,179,858	3,664,413	902,859
Selling, general and administrative expenses	(2,717,548)	(1,323,405)	(6,618,331)	(3,818,767)
Loss on impairment of assets		(375,136)		(375,136)
Income (Loss) from Operations	547,752	(518,683)	(2,953,918)	(3,291,044)
Other Income (Expense):
Interest income	2,807	53,637	4,990	189,905
Interest expense	(211,551)	(270,681)	(421,841)	(519,850)
Gain (Loss) on derivative liability	15	(166,506)	49	(14,409)
Income (Loss) before Income Taxes	339,023	(902,233)	(3,370,720)	(3,635,398)
Provision for Income Taxes	(416,770)	(351,260)	(453,563)	(351,260)
Net Loss	(77,747)	(1,253,493)	(3,824,283)	(3,986,658)
Other Comprehensive Loss
Foreign currency translation adjustment	(756,150)	(9,063,695)	(1,057,769)	(6,560,939)
Total Comprehensive Loss	$ (833,897)	$ (10,317,188)	$ (4,882,052)	$ (10,547,597)
Losses Per Share:
Basic Losses per Share (in Dollars per share)	$ (0.008)	$ (0.12)	$ (0.38)	$ (0.4)
Outstanding – Basic (in Shares)	10,065,920	10,065,920	10,065,920	10,065,920

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parentheticals) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Diluted Losses per Share	$ (0.008)	$ (0.12)	$ (0.38)	$ (0.4)
Outstanding – Diluted	10,065,920	10,065,920	10,065,920	10,065,920

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash Flows from Operating Activities:
Net income	$ (3,824,283)	$ (3,986,658)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,862,883	7,150,057
(Gain) Loss on derivative liability	(49)	14,409
Loss from disposal and impairment of property, plant and equipment		501,934
(Recovery from) Allowance for bad debts	49,462	(830,847)
Allowances for inventories, net	(2,948)
Deferred tax
Changes in operating assets and liabilities:
Accounts receivable	(2,121,357)	(1,674,665)
Prepayments and other current assets	660,470	7,634,922
Inventories	(1,751,011)	(3,940,417)
Accounts payable	(4,974)	127,215
Advance from customers	(62,107)	10,567
Notes payable	430,624
Related parties	(369,287)	(90,617)
Accrued payroll and employee benefits	133,504	154,398
Other payables and accrued liabilities	928,640	743,936
Income taxes payable	416,770	(67,515)
Net Cash Provided by Operating Activities	1,346,337	5,746,719
Cash Flows from Investing Activities:
Purchases of property, plant and equipment	(62,640)	(5,565,713)
Proceeds from sale of property, plant and equipment
Acquisition of land
Net Cash Used in Investing Activities	(62,640)	(5,565,713)
Cash Flows from Financing Activities:
Proceeds from issuance of shares and warrants, net
Proceeds from short term bank loans	844,191	860,919
Proceeds from long term loans		2,582,756
Repayment of bank loans	(422,095)	(507,942)
Payment of capital lease obligation		(112,136)
Loan to a related party (net)
Net Cash Provided by Financing Activities	422,096	2,823,597
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(53,792)	(548,712)
Net Increase in Cash and Cash Equivalents	1,652,001	2,455,891
Cash, Cash Equivalents and Restricted Cash - Beginning of Period	4,391,921	9,524,868
Cash, Cash Equivalents and Restricted Cash - End of Period	6,043,922	11,980,759
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest, net of capitalized interest cost	278,188	199,014
Cash paid for income taxes	36,793	418,775
Cash and bank balances	5,144,414	11,980,759
Restricted cash	899,508
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$ 6,043,922	$ 11,980,759

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-in Capital	Statutory Earnings Reserve	Accumulated Other Comprehensive Income (loss)	Retained Earnings	Total
Balance at Dec. 31, 2022	$ 10,066	$ 89,172,771	$ 6,080,574	$ (7,514,540)	$ 93,575,021	$ 181,323,892
Balance (in Shares) at Dec. 31, 2022	10,065,920
Foreign currency translation adjustment				(6,560,939)		(6,560,939)
Net loss					(3,986,658)	(3,986,658)
Balance at Jun. 30, 2023	$ 10,066	89,172,771	6,080,574	(14,075,479)	89,588,363	170,776,295
Balance (in Shares) at Jun. 30, 2023	10,065,920
Balance at Dec. 31, 2023	$ 10,066	89,172,771	6,080,574	(10,555,534)	83,628,986	$ 168,336,863
Balance (in Shares) at Dec. 31, 2023	10,065,920					10,065,920
Foreign currency translation adjustment				(1,057,769)		$ (1,057,769)
Net loss					(3,824,283)	(3,824,283)
Balance at Jun. 30, 2024	$ 10,066	$ 89,172,771	$ 6,080,574	$ (11,613,303)	$ 79,804,703	$ 163,454,811
Balance (in Shares) at Jun. 30, 2024	10,065,920					10,065,920

Organization and Business Background

6 Months Ended

Jun. 30, 2024

Organization and Business Background [Abstract]

Organization and Business Background

(1) Organization and Business Background

IT Tech Packaging, Inc. (the “Company”) was incorporated in the State of Nevada on December 9, 2005, under the name “Carlateral, Inc.” Through the steps described immediately below, we became the holding company for Hebei Baoding Dongfang Paper Milling Company Limited (“Dongfang Paper”), a producer and distributor of paper products in China, on October 29, 2007.

Effective on August 1, 2018, we changed our corporate name to IT Tech Packaging, Inc.. The name change was effected through a parent/subsidiary short-form merger of IT Tech Packaging, Inc., our wholly-owned Nevada subsidiary formed solely for the purpose of the name change, with and into us. We were the surviving entity. In connection with the name change, our common stock began being traded under a new NYSE symbol, “ITP,” and a new CUSIP number, 46527C100, at such time.

On June 9, 2022, the Board of Directors of the Company approved a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-10 (the “Reverse Stock Split”). The Reverse Stock Split become effective on July 7, 2022 (the “Effective Date”), and the shares began trading on the split-adjusted basis on the NYSE American under the Company’s existing trading symbol “ITP” at market open on July 8, 2022. The new CUSIP number following the Reverse Stock Split is 46527C 209. 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.

On October 29, 2007, pursuant to an agreement and plan of merger (the “Merger Agreement”), the Company acquired DongfangZhiye Holding Limited (“Dongfang Holding”), a corporation formed on November 13, 2006 under the laws of the British Virgin Islands, and issued the shareholders of Dongfang Holding an aggregate of 7,450,497 (as adjusted for a four-for-one reverse stock split effected in November 2009) shares of our common stock, which shares were distributed pro-rata to the shareholders of Dongfang Holding in accordance with their respective ownership interests in Dongfang Holding. At the time of the Merger Agreement, Dongfang Holding owned all of the issued and outstanding stock and ownership of Dongfang Paper and such shares of Dongfang Paper were held in trust with Zhenyong Liu, Xiaodong Liu and Shuangxi Zhao, for Mr. Liu, Mr. Liu and Mr. Zhao (the original shareholders of Dongfang Paper) to exercise control over the disposition of Dongfang Holding’s shares in Dongfang Paper on Dongfang Holding’s behalf until Dongfang Holding successfully completed the change in registration of Dongfang Paper’s capital with the relevant PRC Administration of Industry and Commerce as the 100% owner of Dongfang Paper’s shares. As a result of the merger transaction, Dongfang Holding became a wholly owned subsidiary of the Company, and Dongfang Holding’s wholly owned subsidiary, Dongfang Paper, became an indirectly owned subsidiary of the Company.

Dongfang Holding, as the 100% owner of Dongfang Paper, was unable to complete the registration of Dongfang Paper’s capital under its name within the proper time limits set forth under PRC law. In connection with the consummation of the restructuring transactions described below, Dongfang Holding directed the trustees to return the shares of Dongfang Paper to their original shareholders, and the original Dongfang Paper shareholders entered into certain agreements with Baoding Shengde Paper Co., Ltd. (“Baoding Shengde”) to transfer the control of Dongfang Paper over to Baoding Shengde.

On June 24, 2009, the Company consummated a number of restructuring transactions pursuant to which it acquired all of the issued and outstanding shares of Shengde Holdings Inc., a Nevada corporation. Shengde Holdings Inc. was incorporated in the State of Nevada on February 25, 2009. On June 1, 2009, Shengde Holdings Inc. incorporated Baoding Shengde, a limited liability company organized under the laws of the PRC. Because Baoding Shengde is a wholly-owned subsidiary of Shengde Holdings Inc., it is regarded as a wholly foreign-owned entity under PRC law.

To ensure proper compliance of the Company’s control over the ownership and operations of Dongfang Paper with certain PRC regulations, on June 24, 2009, the Company entered into a series of contractual agreements (the “Contractual Agreements”) with Dongfang Paper and Dongfang Paper Equity Owners via the Company’s wholly owned subsidiary Shengde Holdings Inc. (“Shengde Holdings”) a Nevada corporation and Baoding Shengde Paper Co., Ltd. (“Baoding Shengde”), a wholly foreign-owned enterprise in the PRC with an original registered capital of $10,000,000 (subsequently increased to $60,000,000 in June 2010). Baoding Shengde is mainly engaged in production and distribution of digital photo paper and single-use face masks and is 100% owned by Shengde Holdings. Prior to February 10, 2010, the Contractual Agreements included (i) Exclusive Technical Service and Business Consulting Agreement, which generally provides that Baoding Shengde shall provide exclusive technical, business and management consulting services to Dongfang Paper, in exchange for service fees including a fee equivalent to 80% of Dongfang Paper’s total annual net profits; (ii) Loan Agreement, which provides that Baoding Shengde will make a loan in the aggregate principal amount of $10,000,000 to Dongfang Paper Equity Owners in exchange for each such shareholder agreeing to contribute all of its proceeds from the loan to the registered capital of Dongfang Paper; (iii) Call Option Agreement, which generally provides, among other things, that Dongfang Paper Equity Owners irrevocably grant to Baoding Shengde an option to purchase all or part of each owner’s equity interest in Dongfang Paper. The exercise price for the options shall be RMB1 which Baoding Shengde should pay to each of Dongfang Paper Equity Owner for all their equity interests in Dongfang Paper; (iv) Share Pledge Agreement, which provides that Dongfang Paper Equity Owners will pledge all of their equity interests in Dongfang Paper to Baoding Shengde as security for their obligations under the other agreements described in this section. Specifically, Baoding Shengde is entitled to dispose of the pledged equity interests in the event that Dongfang Paper Equity Owners breach their obligations under the Loan Agreement or Dongfang Paper fails to pay the service fees to Baoding Shengde pursuant to the Exclusive Technical Service and Business Consulting Agreement; and (v) Proxy Agreement, which provides that Dongfang Paper Equity Owners shall irrevocably entrust a designee of Baoding Shengde with such shareholder’s voting rights and the right to represent such shareholder to exercise such owner’s rights at any equity owners’ meeting of Dongfang Paper or with respect to any equity owner action to be taken in accordance with the laws and Dongfang Paper’s Articles of Association. The terms of the agreement are binding on the parties for as long as Dongfang Paper Equity Owners continue to hold any equity interest in Dongfang Paper. A Dongfang Paper Equity Owner will cease to be a party to the agreement once it transfers its equity interests with the prior approval of Baoding Shengde. As the Company had controlled Dongfang Paper since July 16, 2007 through Dongfang Holding and the trust until June 24, 2009 and continued to control Dongfang Paper through Baoding Shengde and the Contractual Agreements, the execution of the Contractual Agreements is considered as a business combination under common control.

On February 10, 2010, Baoding Shengde and the Dongfang Paper Equity Owners entered into a Termination of Loan Agreement to terminate the above- mentioned $10,000,000 Loan Agreement. Because of the Company’s decision to fund future business expansions through Baoding Shengde instead of Dongfang Paper, the $10,000,000 loan contemplated was never made prior to the point of termination. The parties believe the termination of the Loan Agreement does not in itself compromise the effective control of the Company over Dongfang Paper and its businesses in the PRC.

An agreement was also entered into among Baoding Shengde, Dongfang Paper and the Dongfang Paper Equity Owners on December 31, 2010, reiterating that Baoding Shengde is entitled to 100% of the distributable profit of Dongfang Paper, pursuant to the above- mentioned Contractual Agreements. In addition, Dongfang Paper and the Dongfang Paper Equity Owners shall not declare any of Dongfang Paper’s unappropriated earnings as dividend, including the unappropriated earnings of Dongfang Paper from its establishment to 2010 and thereafter.

On June 25, 2019, Dongfang Paper entered into an acquisition agreement with the shareholder of Tengsheng Paper Co., Ltd. (“Tengsheng Paper”), a limited liability company organized under the laws of the PRC, pursuant to which Dongfang Paper would acquire Tengsheng Paper. Full payment of the consideration in the amount of RMB320 million (approximately $45 million) was made on February 23, 2022.

QianrongQianhui Hebei Technology Co., Ltd, a wholly owned subsidiary of Shengde holding, was incorporated on July 15, 2021. It is a service provider of high quality material solutions for textile, cosmetics and paper production.

The Company has no direct equity interest in Dongfang Paper. However, through the Contractual Agreements described above, the Company is found to be the primary beneficiary (the “Primary Beneficiary”) of Dongfang Paper and is deemed to have the effective control over Dongfang Paper’s activities that most significantly affect its economic performance, resulting in Dongfang Paper and its subsidiary, being treated as a controlled variable interest entity of the Company in accordance with Topic 810 - Consolidation of the Accounting Standards Codification (the “ASC”) issued by the FinancialAccounting Standard Board (the “FASB”). The revenue generated from Dongfang Paper and Tengsheng Paper for the three months ended June 30, 2024 and 2023 was accounted for 100% and 99.72% of the Company’s total revenue, respectively. The revenue generated from Dongfang Paper and Tengsheng Paper for the six months ended June 30, 2024 and 2023 was accounted for 100% and 99.84% of the Company’s total revenue, respectively. Dongfang Paper and Tengsheng Paper also accounted for 95.13% and 94.93% of the total assets of the Company as of June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024 and December 31, 2023, details of the Company’s subsidiaries and variable interest entities are as follows:

Name		Date of Incorporation or Establishment		Place of Incorporation or Establishment		Percentage of Ownership		Principal Activity
Subsidiary:
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		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.

However, uncertainties in the PRC legal system could cause the Company’s current ownership structure to be found to be in violation of any existing and/or future PRC laws or regulations and could limit the Company’s ability, through its subsidiary, to enforce its rights under these contractual arrangements. Furthermore, shareholders of the VIE may have interests that are different than those of the Company, which could potentially increase the risk that they would seek to act contrary to the terms of the aforementioned agreements.

In addition, if the current structure or any of the contractual arrangements were found to be in violation of any existing or future PRC law, the Company may be subject to penalties, which may include, but not be limited to, the cancellation or revocation of the Company’s business and operating licenses, being required to restructure the Company’s operations or being required to discontinue the Company’s operating activities. The imposition of any of these or other penalties may result in a material and adverse effect on the Company’s ability to conduct its operations. In such case, the Company may not be able to operate or control the VIE, which may result in deconsolidation of the VIE. The Company believes the possibility that it will no longer be able to control and consolidate its VIE will occur as a result of the aforementioned risks and uncertainties is remote.

The Company has aggregated the financial information of Dongfang Paper in the table below. The aggregate carrying value of Dongfang Paper’s assets and liabilities (after elimination of intercompany transactions and balances) in the Company’s condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 are as follows:

The Company and its consolidated subsidiaries are not required to provide financial support to the VIE, and no creditor (or beneficial interest holders) of the VIE have recourse to the assets of Company unless the Company separately agrees to be subject to such claims. There are no terms in any agreements or arrangements, implicit or explicit, which require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE does require financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIE.

		June 30,				December 31,
		2024				2023
ASSETS

Current Assets
Cash and bank balances		$	4,603,402			$	2,807,608
Restricted cash			899,508				472,983
Accounts receivable			2,638,219				575,526
Inventories			5,282,420				3,555,235
Prepayments and other current assets			17,353,714				18,617,351
Due from related parties			287,384				289,173

Total current assets			31,064,647				26,317,876

Operating lease right-of-use assets, net			476,771				528,648
Property, plant, and equipment, net			150,495,716				158,027,099
Deferred tax asset non-current			-				-

Total Assets		$	182,037,134			$	184,873,623

LIABILITIES

Current Liabilities
Short-term bank loans		$	420,946			$	-
Current portion of long-term loans			4,993,826				2,780,014
Lease liability			103,568				100,484
Accounts payable			-				4,991
Advance from customers			73,386				136,167
Accrued payroll and employee benefits			329,583				231,568
Other payables and accrued liabilities			11,925,967				11,843,973
Income taxes payable			415,635				-

Total current liabilities			18,262,911				15,097,197

Long-term loans			2,245,047				4,503,932
Lease liability - non-current			498,718				483,866

Total liabilities		$	21,006,676			$	20,084,995

Basis of Presentation and Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Basis of Presentation and Significant Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

(2) Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and notes required by the United States of America generally accepted accounting principles (“GAAP”) for annual financial statements are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023 of the Company, and its subsidiaries and variable interest entity (which we sometimes refer to collectively as “the Company”, “we”, “us” or “our”).

Principles of Consolidation

Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of June 30, 2024 and the results of operations for the six months ended June 30, 2024 are not necessarily indicative of the results to be expected for any future period.

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates.

Valuation of long-lived asset

The Company reviews the carrying value of long-lived assets to be held and used when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

Fair Value Measurements

The Company has adopted ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts that the Company could realize in a current market exchange. As of June 30, 2024 and December 31, 2023, the carrying value of the Company’s short term financial instruments, such as cash and cash equivalents, accounts receivable, accounts and notes payable, short-term bank loans, balance due to a related party and obligation under capital lease, approximate at their fair values because of the short maturity of these instruments; while loans from credit union and loans from a related party approximate at their fair value as the interest rates thereon are close to the market rates of interest published by the People’s Bank of China.

Management determined that liabilities created by beneficial conversion features associated with the issuance of certain warrants (see “Derivative liabilities” under Note (12)), meet the criteria of derivatives and are required to be measured at fair value. The fair value of these derivative liabilities was determined based on management’s estimate of the expected future cash flows required to settle the liabilities. This valuation technique involves management’s estimates and judgment based on unobservable inputs and is classified in level 3.

Non-Recurring Fair Value Measurements

The Company reviews long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow.

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 services. 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.

Restricted Cash

6 Months Ended

Jun. 30, 2024

Restricted Cash [Abstract]

Restricted Cash

(3) Restricted Cash

Out of the restricted cash, $429,451 as of June 30, 2024 was presented for the cash deposited at the Bank of Cangzhou for purpose of securing the bank acceptance notes from this bank (see Note (10)). The restriction will be lifted upon the maturity of the notes payable on July 16, 2024. Restricted cash of $470,057 and $472,983 as of June 30, 2024 and 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.

Inventories

6 Months Ended

Jun. 30, 2024

Inventories [Abstract]

(4) Inventories

Raw materials inventory includes mainly recycled paper board and recycled white scrap paper. Finished goods include mainly products of corrugating medium paper, offset printing paper and tissue paper products. Inventories consisted of the following as of June 30, 2024 and December 31, 2023:

		June 30,				December 31,
		2024				2023
Raw Materials
Recycled paper board		$	3,462,147			$	198,744
Recycled white scrap paper			10,581				10,647
Gas			65,761				21,428
Base paper and other raw materials			180,653				142,149
			3,719,142				372,968
Semi-finished Goods			298,349				300,207
Finished Goods			1,264,929				2,885,019
Total inventory, gross			5,282,420				3,558,194
Inventory reserve			-				(2,959	)
Total inventory, net		$	5,282,420			$	3,555,235

Prepayments and Other Current Assets

6 Months Ended

Jun. 30, 2024

Prepayments and Other Current Assets [Abstract]

Prepayments and other current assets

(5) Prepayments and other current assets

Prepayments and other current assets consisted of the following as of June 30, 2024 and December 31, 2023:

		June 30,				December 31,
		2024				2023
Prepayment for purchase of materials		$	4,879,907			$	5,446,823
Value-added tax recoverable			13,268,074				13,409,459
Prepaid gas			87,028				116,372
Others			11,155				8,636
		$	18,246,164			$	18,981,290

Property, Plant and Equipment, Net

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment, Net [Abstract]

Property, plant and equipment, net

(6) Property, plant and equipment, net

As of June 30, 2024 and December 31, 2023, property, plant and equipment consisted of the following:

		June 30,				December 31,
		2024				2023

Land use rights		$	81,000,265			$	81,504,608
Building and improvements			67,156,279				67,939,059
Machinery and equipment			157,513,260				158,629,858
Vehicles			346,054				348,209
Construction in progress			-				-
Totals			306,015,858				308,421,734
Less: accumulated depreciation and amortization			(150,391,106	)			(144,447,712	)
Property, Plant and Equipment, net		$	155,624,752			$	163,974,022

As of June 30, 2024 and December 31, 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 June 30, 2024 and December 31, 2023, certain property, 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 Paper. Land use right of Tengsheng Paper with net value of $4,822,130 and $4,910,034, respectively, as of June 30, 2024 and December 31, 2023 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 $3,707,411 and $3,781,366, respectively, as of June 30, 2024 and December 31, 2023 was pledged for another long-term loan from credit union of Baoding Shengde. Land use right of Dongfang Paper with net value of $5,036,790 and $5,135,132, respectively, as of June 30, 2024 and December 31, 2023 was pledged for a long-term loan from credit union of Tengsheng Paper. Certain property, plant and equipment of Dongfang Paper with net values of $276,269 was pledged for a short-term loan from Bank of Cangzhou. See “Short-term bank loans” under Note (8), Loans Payable, for details of the transaction and asset collaterals.

Depreciation and amortization of property, plant and equipment was $3,381,095 and $3,463,814 for the three months ended June 30, 2024 and 2023, respectively. Depreciation and amortization of property, plant and equipment was $6,862,883 and $7,150,057 for the six months ended June 30, 2024 and 2023, respectively.

Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

(7) Leases

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 as of June 30, 2024 and December 31, 2023.

Amortization of the Leased Equipment was $nil and $37,661 for the three months ended June 30, 2024 and 2023. Amortization of the Leased Equipment was $nil and $76,526 for the six months ended June 30, 2024 and 2023. Total interest expenses for the sale-leaseback arrangement was $nil and $2,182 for the three months ended June 30, 2024 and 2023. Total interest expenses for the sale-leaseback arrangement was $nil and $6,671 for the six months ended June 30, 2024 and 2023.

Operating lease lessor

The Company has a non-cancellable agreement to lease plant to tenant under operating lease for 1 year from November 2023 to November 2024. The lease does not contain contingent payments. The rental income of the year was paid in advance by the tenant in December 2023.

Operating lease as lessee

The Company leases space under non-cancelable operating leases for plant and production equipment. The lease does not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the lease does not contain contingent rent provisions.

The lease include option to renew in condition that it is agreed by the landlord before expiry. Therefore, the majority of renewals to extend the lease terms are not included in its right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluate the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term.

As the Company’s leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

The components of the Company’s lease expense are as follows:

		Six Months Ended
		June 30, 2024
		RMB

Operating lease cost			70,158
Short-term lease cost			-
Lease cost			70,158

Supplemental cash flow information related to its operating leases was as follows for the period ended June 30, 2024:

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

		Six Months Ended
		June 30, 2024
		RMB
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflow from operating leases			-

Maturities of its lease liabilities for all operating leases are as follows as of June 30, 2024:

June 30,		Amount
2025			140,315
2026			140,315
2027			140,315
2028			140,315
2029			140,315
Thereafter			-
Total operating lease payments		$	701,577
Less: Interest			(99,291	)
Present value of lease liabilities			602,286
Less: current portion, record in current liabilities			(103,568	)
Present value of lease liabilities			498,718

The weighted average remaining lease terms and discount rates for all of its operating leases were as follows as of June 30, 2024:

		June 30,
		2024
		RMB
Remaining lease term and discount rate:
Weighted average remaining lease term (years)			4.1
Weighted average discount rate			7.56	%

Loans Payable

6 Months Ended

Jun. 30, 2024

Loans Payable [Abstract]

(8) Loans Payable

Short-term bank loans

		June 30,				December 31,
		2024				2023
Bank of Cangzhou 1		$	140,315			$	-
Bank of Cangzhou 2			280,631				-
Industrial and Commercial Bank of China (“ICBC”) Loan 1			-				2,824
ICBC Loan 2			-				70,594
ICBC Loan 3			-				350,149
ICBC Loan 4			2,806				-
ICBC Loan 5			140,316				-
ICBC Loan 6			140,316				-
ICBC Loan 7			137,509				-
Total short-term bank loans		$	841,893			$	423,567

On December 31, 2023, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $140,315 at a fixed interest rate of 5.5% per annum. The loan is secured by certain of the Company’s manufacturing equipment with net book value of $276,269 as of June 30, 2024. The loan will be due by December 30, 2024.

On December 31, 2023, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $280,631 at a fixed interest rate of 5.5% per annum. The loan will be due by December 30, 2024.

On September 15, 2023, the Company entered into a working capital loan agreement with the ICBC, with a balance of $nil and $2,824 as of June 30, 2024 and December 31, 2023, respectively. The 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 $nil and $70,594 as of June 30, 2024 and December 31, 2023, respectively. The 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 $nil and $350,149 as of June 30, 2024 and December 31, 2023, respectively. The 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 $2,806 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 11, 2025.

On June 21, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $140,316 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 21, 2025.

On June 22, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $140,316 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 22, 2025.

On June 24, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $137,509 as of June 30, 2024. The loan bears a fixed interest rate of 3.45% per annum. The loan will be due by June 24, 2025.

As of June 30, 2024, there were guaranteed short-term borrowings of $nil and unsecured bank loans of $701,577. As of December 31, 2023, there were guaranteed short-term borrowings of $nil and unsecured bank loans of $423,567.

The average short-term borrowing rates for the three months ended June 30, 2024 and 2023 were approximately 4.45% and 4.83%. The average short-term borrowing rates for the six months ended June 30, 2024 and 2023 were approximately 4.46% and 4.77%.

Long-term loans

As of June 30, 2024 and December 31, 2023, long-term loans were $11,308,021 and $11,378,429, respectively.

		June 30,				December 31,
		2024				2023
Rural Credit Union of Xushui District Loan 1		$	3,506,482			$	3,528,315
Rural Credit Union of Xushui District Loan 2			2,245,047				2,259,026
Rural Credit Union of Xushui District Loan 3			1,824,101				1,835,458
Rural Credit Union of Xushui District Loan 4			2,525,678				2,541,404
Rural Credit Union of Xushui District Loan 5			1,206,713				1,214,226
Total			11,308,021				11,378,429
Less: Current portion of long-term loans			(6,817,927	)			(6,874,497	)
Long-term loans		$	4,490,094			$	4,503,932

As of June 30, 2024, the Company’s long-term debt repayments for the next coming years were as follows:

		Amount
Fiscal year
Remainder of 2024		$	6,817,927
2025			3,367,571
2026 & after			1,122,523
Total			11,308,021

On July 15, 2013, 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 and payable in various installments from December 21, 2013 to July 26, 2018. On June 21, 2018, the loan was extended for additional 5 years and was due and payable in various installments from December 21, 2018 to June 20, 2023. On August 24, 2023, the loan was extended for another 3 years and will be due and payable on August 24, 2026. The loan is secured by certain of the Company’s manufacturing equipment with net book value of $nil as of June 30, 2024 and December 31, 2023. Interest payment is due monthly and bore a rate of 7.68% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $3,506,482 and $3,528,315. Out of the total outstanding loan balance, current portion amounted was $1,963,012 and $1,269,290, which is presented as current liabilities in the consolidated balance sheet and the remaining balance of $1,543,470 and $2,259,025 is presented as non-current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

On April 17, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which was due and payable in various installments from August 21, 2019 to April 16, 2021. 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 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. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $2,245,047 and $2,259,026, respectively, which are presented as non-current liabilities and current liabilities, respectively, in the consolidated balance sheet as of June 30, 2024 and December 31, 2023.

On December 12, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from June 21, 2020 to December 11, 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 December 11, 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 monthly and bore a rate of 7.56% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $1,824,101 and $1,835,458, respectively, which are presented as current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023.

On February 26, 2023, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from August 21, 2023 to February 24, 2025. The loan is secured by Dongfang Paper with its land use right as collateral for the benefit of the credit union. Interest payment is due monthly and bore a rate of 7% per annum. As of June 30, 2024 and December 31, 2023, the total outstanding loan balance was $2,525,678 and $2,541,404. Out of the total outstanding loan balance, current portion amounted was $2,525,678 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 June 30, 2024 and December 31, 2023, respectively. The loan was fully repaid in July 2024.

On December 5, 2023, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 3 years, which was due in various installments from June 21, 2024 to December 5, 2026. The loan was guaranteed by an independent third party. Interest payment was due monthly and bore a rate of 7% per annum. As of June 30, 2024 and December 31, 2023, total outstanding loan balance was $1,206,713 and $1,214,226, respectively. Out of the total outstanding loan balance, current portion amounted $505,136 and $225,903, which is presented as current liabilities and the remaining balance of $701,577 and $988,323 is presented as non-current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

Total interest expenses for the short-term bank loans and long-term loans for the three months ended June 30, 2024 and 2023 were $211,551 and $268,499, respectively. Total interest expenses for the short-term bank loans and long-term loans for the six months ended June 30, 2024 and 2023 were $421,841 and $513,179, respectively.

Related Party Transactions

6 Months Ended

Jun. 30, 2024

Related Party Transactions [Abstract]

Related Party Transactions

(9) Related Party Transactions

Mr. Zhenyong Liu, the Company’s CEO has loaned money to Dongfang Paper for working capital purposes over a period of time. On January 1, 2013,Dongfang Paper and Mr. Zhenyong Liu renewed the three-year term loan previously entered on January 1, 2010, and extended the maturity date further to December 31, 2015. On December 31, 2015, the Company paid off the loan of $2,249,279, together with interest of $391,374 for the period from 2013 to 2015. Approximately $359,676 and $361,915 of interest were outstanding to Mr. Zhenyong Liu, which were recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of June 30, 2024 and December 31, 2023, respectively.

On December 10, 2014, Mr. Zhenyong Liu provided a loan to the Company, amounted to $8,742,278 to Dongfang Paper for working capital purpose with an interest rate of 4.35% per annum, which was based on the primary lending rate of People’s Bank of China. The unsecured loan was provided on December 10, 2014, and would be originally due on December 10, 2017. During the year of 2016, the Company repaid $6,012,416 to Mr. Zhenyong Liu, together with interest of $288,596. In February 2018, the Company paid off the remaining balance, together with interest of $20,400. As of June 30, 2024 and December 31, 2023, approximately $42,095 and $42,357 of interest, respectively, were outstanding to Mr. Zhenyong Liu, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

On March 1, 2015, the Company entered an agreement with Mr. Zhenyong Liu which allows Dongfang Paper to borrow from the CEO an amount up to $17,201,342 (RMB120,000,000) for working capital purposes. The advances or funding under the agreement are due three years from the date each amount is funded. The loan is unsecured and carries an annual interest rate set on the basis of the primary lending rate of the People’s Bank of China at the time of the borrowing. On July 13, 2015, an unsecured amount of $4,324,636 was drawn from the facility. On October 14, 2016 an unsecured amount of $2,883,091 was drawn from the facility. In February 2018, the Company repaid $1,507,432 to Mr. Zhenyong Liu. The loan would be originally due on July 12, 2018. Mr. Zhenyong Liu agreed to extend the loan for additional 3 years and the remaining balance will be due on July 12, 2021. On November 23, 2018, the company repaid $3,768,579 to Mr. Zhenyong Liu, together with interest of $158,651. In December 2019, the company paid off the remaining balance, together with interest of 94,636. As of June 30, 2024 and December 31, 2023, the outstanding interest was $192,846 and $194,047, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

As of June 30, 2024 and December 31, 2023, total amount of loans due to Mr. Zhenyong Liu were $nil. The interest expense incurred for such related party loans were $nil for the three and six months ended June 30, 2024 and 2023. The accrued interest owing to Mr. Zhenyong Liu was approximately $594,617 and $598,319, as of June 30, 2024 and December 31, 2023, respectively, which was recorded in other payables and accrued liabilities.

In October 2022 and November 2022, the Company entered into two agreements with Mr. Zhenyong Liu, which allowed Mr. Zhenyong Liu to borrow from the Company an amount of $7,059,455 (RMB50,000,000) in total. The loans were unsecured and carried a fixed interest rate of 4.35% per annum. $4,235,673 (RMB30,000,000) was repaid by Mr. Zhengyong Liu in August 2023 and the remaining balance was repaid in December 2023. Interest income of the loan for the six months ended June 30, 2024 and 2023 were $nil and $176,847.

As of June 30, 2024 and December 31, 2023, amount due to shareholder was $727,433, which represents funds from shareholders to pay for various expenses incurred in the U.S. The amount is due on demand with interest free.

Notes Payable

6 Months Ended

Jun. 30, 2024

Notes Payable [Abstract]

(10) Notes payable

As of June 30, 2024, the Company had bank acceptance notes of $429,451 from the Cangzhou to suppliers for settling purchases of raw materials. The acceptance notes are used to essentially extend the payment of accounts payable and are issued under the banking facilities obtained from bank. The bank acceptance notes from the bank bore interest rate at nil% per annum and 0.05% of notes amount as handling change. The acceptance notes will become due and payable on July 16, 2024.

Other Payables and Accrued Liabilities

6 Months Ended

Jun. 30, 2024

Other payables and accrued liabilities [Abstract]

Other payables and accrued liabilities

(11) Other payables and accrued liabilities

		June 30,				December 31,
		2024				2023
Accrued electricity		$	115,216			$	3,054
Value-added tax payable			68,138				696
Accrued interest to a related party			594,617				598,319
Payable for purchase of property, plant and equipment			11,054,912				11,175,858
Accrued commission to salesmen			14,869				47,040
Accrued bank loan interest			1,207,344				1,070,708
Others			80,591				16,842
Totals		$	13,135,687			$	12,912,517

Derivative Liabilities

6 Months Ended

Jun. 30, 2024

Derivative Liabilities [Abstract]

Derivative Liabilities

(12) Derivative Liabilities

The Company analyzed the warrant for derivative accounting consideration under ASC 815, “Derivatives and Hedging, and hedging,” and determined that the instrument should be classified as a liability since the warrant becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

The Company determined its derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2024. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each warrant is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in the June 30, 2024:

		Six months ended
		June 30, 2024
Expected term		0.68 - 2.75
Expected average volatility		84% - 102%
Expected dividend yield		-
Risk-free interest rate		0.19% - 4.71%

The following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2024: Fair

Value Measurements Using Significant Observable Inputs (Level 3)

Balance at December 31, 2023		$	54
Change in fair value of derivative liability			(49	)

Balance at June 30, 2024		$	5

Common Stock

6 Months Ended

Jun. 30, 2024

Common Stocks [Abstract]

(13) Common Stock

Issuance of common stock to investors

On January 20, 2021, the Company offered and sold to certain institutional investors an aggregate of 2,618,182 shares of common stock and 2,618,182 warrants to purchase up to 2,618,182 shares of common stock in a best-efforts public offering for gross proceeds of approximately $14.4 million. The purchase price for each share of common stock and the corresponding warrant was $5.5. The exercise price of the warrant was $5.5 per share.

On March 1, 2021, the Company offered and sold to the public investors an aggregate of 2,927,786 shares of common stock and 1,463,893 warrants to purchase up to 1,463,893 shares of common stock in a firm commitment underwritten public offering for gross proceeds of approximately $21.9 million. The purchase price for each share of common stock and accompanying warrant was $7.5. The exercise price of the warrant was $7.5 per share.

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 Split. 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.

Warrants

6 Months Ended

Jun. 30, 2024

Warrants [Abstract]

(14) Warrants

On April 29, 2020, the Company and certain institutional investors entered into a securities purchase agreement, as amended on May 4, 2020 (the “2020 Purchase Agreement”), pursuant to which the Company agreed to sell to such investors an aggregate of 440,000 shares of common stock and warrants to purchase up to 440,000 shares of common stock in a concurrent private placement (the “May 2020 Warrants”). The exercise price of the May 2020 Warrant is $7.425 per share. These warrants become exercisable on July 23, 2020 and have a term of exercise equal to five years and six months from the date of issuance till July 23, 2025. 88,000 May 2020 Warrants were exercised in February 2021 at the exercise price of $7.425 per share and 352,000 May 2020 Warrants were outstanding as of June 30, 2024.

On January 20, 2021, the Company offered and sold to certain institutional investors an aggregate of 2,618,182 shares of common stock and 2,618,182 warrants to purchase up to 2,618,182 shares of common stock (the “January 2021 Warrants”). The January 2021 Warrants became exercisable on January 20, 2021 at an exercise price of $5.5 and will expire on January 20, 2026. 1,410,690 January 2021 Warrants were exercised in January and February of 2021 at the exercise price of $5.5 per share. 1,207,492 January 2021 Warrants were outstanding as of June 30, 2024.

On March 1, 2021, the Company offered and sold to the public investors an aggregate of 2,927,786 shares of common stock and 1,463,893 warrants to purchase up to 1,463,893 shares of common stock (the “March 2021 Warrants”). The March 2021 Warrants became exercisable on March 1, 2021 at an exercise price of $7.5 and will expire on March 1, 2026. 6,750 March 2021 Warrants were exercised in January and March 2021 at the exercise price of $7.5 per share and 1,457,143 March 2021 Warrants were outstanding as of June 30, 2024.

The Company classified warrants as liabilities and accounted for the issuance of the warrants as a derivative.

A summary of stock warrant activities is as below:

		Six months ended June 30, 2024
		Number				Weight average exercise price
Outstanding and exercisable at beginning of the period			3,016,635			$	6.6907
Issued during the period			-
Exercised during the period			-
Cancelled or expired during the period			-
Outstanding and exercisable at end of the period			3,016,635			$	6.6907

The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2024.

Warrants Outstanding										Warrants Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)				Weighted Average Exercise Price				Number of Shares				Weighted Average Exercise Price
3,016,635			1.59			$	6.6907				3,016,635			$	6.6907

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at June 30, 2024 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). The intrinsic value of the warrants as of June 30, 2024 and December 31, 2023 are nil.

Earnings Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Earnings Per Share

(15) Earnings Per Share

For the three months ended June 30, 2024 and 2023, basic and diluted net loss per share are calculated as follows:

		Three Months Ended June 30,
		2024				2023
Basic loss per share
Net loss for the period - numerator		$	(77,747	)		$	(1,253,493	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Net loss per share		$	(0.008	)		$	(0.12	)

Diluted income per share
Net income for the period - numerator		$	(77,747	)		$	(1,253,493	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Effect of dilution			-				-
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Diluted loss per share		$	(0.008	)		$	(0.12	)

For the six months ended June 30, 2024 and 2023, basic and diluted net loss per share are calculated as follows:

		Six Months Ended June 30,
		2024				2023
Basic loss per share
Net loss for the period - numerator		$	(3,824,283	)		$	(3,986,658	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Net loss per share		$	(0.38	)		$	(0.40	)

Diluted loss per share
Net loss for the period - numerator		$	(3,824,283	)		$	(3,986,658	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Effect of dilution			-				-
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Diluted loss per share		$	(0.38	)		$	(0.40	)

For the three and six months ended June 30, 2024 and 2023 there were no securities with dilutive effect issued and outstanding.

Income Taxes

6 Months Ended

Jun. 30, 2024

Income Taxes [Abstract]

(16) Income Taxes

United States

The Company may be subject to the United States of America Tax laws at a tax rate of 21%. No provision for the US federal income taxes has been made as the Company had no US taxable income for the second quarter ended June 30, 2024 and 2023, and management believes that its earnings are permanently invested in the PRC.

PRC

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 three months ended June 30, 2024 and 2023 were as follows:

		Three Months Ended
		June 30,
		2024				2023
Provision for Income Taxes
Current Tax Provision U.S.		$				$	-
Current Tax Provision PRC			416,770				351,260
Deferred Tax Provision PRC			-				-
Total Provision for (Deferred tax benefit)/ Income Taxes		$	416,770			$	351,260

The provisions for income taxes for six months ended June 30, 2024 and 2023 were as follows:

		Six Months Ended
		June 30,
		2024				2023
Provision for Income Taxes
Current Tax Provision U.S.		$	36,793			$	-
Current Tax Provision PRC			416,770				351,260
Deferred Tax Provision PRC			-				-
Total Provision for (Deferred tax benefit)/ Income Taxes		$	453,563			$	351,260

In addition to the reversible future PRC income tax benefits stemming from the timing differences of items such as recognition of asset disposal gain or loss and asset depreciation, the Company was incorporated in the United States and incurred net operating losses of approximately $62,499 and $530,581 for U.S. income tax purposes for the years ended December 31, 2023 and 2022, respectively. The net operating loss carried forward may be available to reduce future years’ taxable income. These carry forwards would expire, if not utilized, during the period of 2030 through 2035. As of June 30, 2024, management believed that the realization of all the U.S. income tax benefits from these losses, which generally would generate a deferred tax asset if it can be expected to be utilized in the future, appears not more than likely due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, As of June 30, 2024 and December 31, 2023, the Company provided a 100% valuation allowance on the U.S. deferred tax asset benefit to reduce the total deferred tax asset to the amount realizable for the PRC income tax purposes. Management reviews this valuation allowance periodically and will make adjustments as warranted. A summary of the otherwise deductible (or taxable) deferred tax items is as follows:

		June 30,				December 31,
		2024				2023
Deferred tax assets (liabilities)
Depreciation and amortization of property, plant and equipment		$	17,753,892			$	16,922,756
Impairment of property, plant and equipment			581,757				585,380
Miscellaneous			648,269				135,714
Net operating loss carryover of PRC company			156,717				274,525
(Gain) Loss on asset disposal			(63,669	)			(64,065	)
Total deferred tax assets			19,076,967				17,854,310
Less: Valuation allowance			(19,076,967	)			(17,854,310	)
Total deferred tax assets, net		$	-				-

During the three months ended June 30, 2024 and 2023, the effective income tax rate was estimated by the Company to be 122.9% and -38.9%, respectively

		Three Months Ended
		June 30,
		2024				2023
PRC Statutory rate			25.0	%			25.0	%
Effect of different tax jurisdiction
Effect of tax and book difference			(15.4	)%			(121.4	)%
Change in valuation allowance			113.3	%			57.5	%
Effective income tax rate			122.9	%			(38.9	)%

During the six months ended June 30, 2024 and 2023, the effective income tax rate was estimated by the Company to be -13.5% and -9.7%, respectively

		Six Months Ended
		June 30,
		2024				2023
PRC Statutory rate			25.0	%			25.0	%
Effect of different tax jurisdiction
Effect of tax and book difference			(2.2	)%			(42.7	)%
Change in valuation allowance			36.3	%			8.0	%
Effective income tax rate			(13.5	)%			(9.7	)%

As of June 30, 2024, except for the one-time transition tax under the 2017 TCJA which imposes a U.S. tax liability on all unrepatriated foreign E&Ps, the Company does not believe that its future dividend policy and the available U.S. tax deductions and net operating losses will cause the Company to recognize any other substantial current U.S. federal or state corporate income tax liability in the near future. Nor does it believe that the amount of the repatriation of the VIE’s earnings and profits for purposes of paying dividends will change the Company’s position that its PRC subsidiary Baoding Shengde and the VIE, Dongfang Paper are considered or are expected to be indefinitely reinvested offshore to support our future capacity expansion. If these earnings are repatriated to the U.S. resulting in U.S. taxable income in the future, or if it is determined that such earnings are to be remitted in the foreseeable future, additional tax provisions would be required.

The Company has adopted ASC Topic 740-10-05, Income Taxes. To date, the adoption of this interpretation has not impacted the Company’s financial position, results of operations, or cash flows. The Company performed self-assessment and the Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed, which in the PRC is usually 5 years. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of June 30, 2024 and December 31, 2023, management considered that the Company had no uncertain tax positions affecting its consolidated financial position and results of operations or cash flows, and will continue to evaluate for any uncertain position in future. There are no estimated interest costs and penalties provided in the Company’s consolidated financial statements for the six months ended June 30, 2024 and December 31, 2023, respectively. The Company’s tax positions related to open tax years are subject to examination by the relevant tax authorities and the major one is the China Tax Authority.

Stock Incentive Plans

6 Months Ended

Jun. 30, 2024

Stock Incentive Plans [Abstract]

Stock Incentive Plans

(17) Stock Incentive Plans

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 ISP”). Under the 2023 ISP, the Company has reserved a total of 1,500,000 shares of common stock for issuance as or under awards to be made to the directors, officers, employees and/or consultants of the Company and its subsidiaries.

All shares of common stock under the 2023 ISP, including shares originally authorized by equity holders and shares remaining for future issuance as of June 30, 2024, have been reserved.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies [Abstract]

Commitments and Contingencies

(18) Commitments and Contingencies

Xushui Land Lease

The Company leases 32.95 acres of land from a local government in Xushui District, Baoding City, Hebei, China through a real estate lease with a 30- year term, which expires on December 31, 2031. The lease requires an annual rental payment of approximately $16,884 (RMB120,000). This lease is renewable at the end of the 30-year term.

June 30,		Amount
2025			16,838
2026			16,838
2027			16,838
2028			16,838
2029			16,838
Thereafter			42,095
Total operating lease payments			126,285

Sale of Headquarters Compound Real Properties

On August 7, 2013, the Company’s Audit Committee and the Board of Directors approved the sale of the land use right of the Headquarters Compound (the “LUR”), the office building and essentially all industrial-use buildings in the Headquarters Compound (the “Industrial Buildings”), and three employee dormitory buildings located within the Headquarters Compound (the “Dormitories”) to Hebei Fangsheng for cash prices of approximately $2.77 million, $1.15 million, and $4.31 million respectively. Sales of the LUR and the Industrial Buildings were completed in year 2013.

In connection with the sale of the Industrial Buildings, Hebei Fangsheng agreed to lease the Industrial Buildings back to the Company for its original use with an annual rental payment of approximately $140,698 (RMB1,000,000). The lease was recorded in lease assets and liabilities in the consolidated balance sheet as of June 30, 2024.

Capital commitment

As of June 30, 2024, the Company has entered into several contracts for the purchase of paper machine of a new tissue paper production line PM10 and the improvement of Industrial Buildings. Total outstanding commitments under these contracts were $3,465,791 and $3,499,936 as of June 30, 2024 and December 31, 2023, respectively. The Company expected to pay off all the balances within 1-3 years.

Guarantees and Indemnities

The Company agreed with Baoding Huanrun Trading Co., a major supplier of raw materials, to guarantee certain obligations of this third party, and as of June 30, 2024 and December 31, 2023, the Company guaranteed its long-term loan from financial institutions amounting to $4,349,778 (RMB31,000,000) that will mature at various times in 2028. If Huanrun Trading Co., were to become insolvent, the Company could be materially adversely affected.

Segment Reporting

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segment Reporting

(19) Segment Reporting

Since March 10, 2010, Baoding Shengde started its operations and thereafter the Company manages its operations through three business operating segments: Dongfang Paper and Tengsheng Paper, which produces offset printing paper, corrugating medium paper and tissue paper, and Baoding Shengde, which produces face masks and digital photo paper. They are managed separately because each business requires different technology and marketing strategies.

The Company evaluates performance of its operating segments based on net income. Administrative functions such as finance, treasury, and information systems are centralized. However, where applicable, portions of the administrative function expenses are allocated among the operating segments based on gross revenue generated. The operating segments do share facilities in Xushui County, Baoding City, Hebei Province, China. All sales were sold to customers located in the PRC.

Summarized financial information for the three reportable segments is as follows:

		Three Months Ended
		June 30, 2024
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	26,212,815			$	36,973			$	-			$	-			$	-			$	26,249,788
Gross profit			3,228,326				36,973				-				-				-				3,265,299
Depreciation and amortization			893,311				2,096,538				391,246				-				-				3,381,095
Interest income			2,088				548				170				1				-				2,807
Interest expense			90,393				45,263				72,123				3,772				-				211,551
Income tax expense(benefit)			416,770				-				-				-				-				416,770
Net income (loss)			2,202,788				(2,111,359	)			(82,396	)			(86,780	)			-				(77,747	)

		Three Months Ended
		June 30, 2023
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	29,631,400			$	344,268			$	44,246			$	-			$	-			$	30,019,914
Gross profit			1,893,087				(709,660	)			(3,569	)			-				-				1,179,858
Depreciation and amortization			996,939				2,071,666				395,209				-				-				3,463,814
Loss on impairment of assets			-				-				375,136				-				-				375,136
Interest income			47,763				844				4,486				544				-				53,637
Interest expense			144,083				53,991				72,607				-				-				270,681
Income tax expense(benefit)			351,260				-				-				-				-				351,260
Net income (loss)			937,333				(1,487,869	)			(443,841	)			(259,116	)			-				(1,253,493	)

		Six Months Ended
		June 30, 2024
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	33,039,614				74,015				-				-				-				33,113,629
Gross profit			3,590,661				73,751				-				-				-				3,664,412
Depreciation and amortization			1,882,583				4,197,079				783,221				-				-				6,862,883
Interest income			3,550				1,084				343				13				-				4,990
Interest expense			179,900				90,117				144,368				7,456				-				421,841
Income tax expense(benefit)			416,770				-				-				36,793				-				453,563
Net income (loss)			1,068,547				(4,234,116	)			(136,908	)			(521,806	)			-				(3,824,283	)

		Six Months Ended
		June 30, 2023
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	49,159,596				571,312				79,883				-				-				49,810,791
Gross profit			2,332,167				(1,422,900	)			(6,408	)			-				-				902,859
Depreciation and amortization			2,137,405				4,209,594				803,058				-				-				7,150,057
Loss from impairment and disposal of property, plant and equipment			-				-				375,136				-				-				375,136
Interest income			180,946				1,537				5,721				1,701				-				189,905
Interest expense			290,785				82,565				146,500				-				-				519,850
Income tax expense(benefit)			351,260				-				-				-				-				351,260
Net income (loss)			367,869				(3,407,989	)			(543,126	)			(403,412	)			-				(3,986,658	)

As of June 30, 2024

Dongfang

Tengsheng

Baoding

Not
Attributable

Elimination of

Enterprise-
wide,

Paper

Paper

Shengde

to Segments

Inter-segment

consolidated

Total assets

$

59,259,853

122,777,281

7,338,286

1,986,806

-

191,362,226

As of December 31, 2023

Dongfang

Tengsheng

Baoding

Not Attributable

Elimination of

Enterprise-
wide,

Paper

Paper

Shengde

to Segments

Inter-segment

consolidated

Total assets

$

57,139,592

127,734,031

8,184,902

1,685,124

-

194,743,649

Concentration and Major Customers and Suppliers

6 Months Ended

Jun. 30, 2024

Concentration and Major Customers and Suppliers [Abstract]

Concentration and Major Customers and Suppliers

(20) Concentration and Major Customers and Suppliers

For the three and six months ended June 30, 2024 and 2023, the Company had no single customer contributed over 10% of total sales.

For the three months ended June 30, 2024, the Company had three major suppliers accounted for 76%, 16% and 7% of total purchases. For the three months ended June 30, 2023, the Company had three major suppliers accounted for 74%, 16% and 6% of total purchases.

For the six months ended June 30, 2024, the Company had three major suppliers accounted for 76%, 16% and 7% of total purchases. For the six months ended June 30, 2023, the Company had three major suppliers accounted for 67%, 13% and 10% of total purchases.

Concentration of Credit Risk

6 Months Ended

Jun. 30, 2024

Concentration of Credit Risk [Abstract]

Concentration of Credit Risk

(21) Concentration of Credit Risk

Financial instruments for which the Company is potentially subject to concentration of credit risk consist principally of cash. The Company places its cash in reputable financial institutions in the PRC and the United States. Although it is generally understood that the PRC central government stands behind all of the banks in China in the event of bank failure, there is no deposit insurance system in China that is similar to the protection provided by the Federal Deposit Insurance Corporation (“FDIC”) of the United States as of as of June 30, 2024 and December 31, 2023. On May 1, 2015, the new “Deposit Insurance Regulations” was effective in the PRC that the maximum protection would be up to RMB500,000 ($70,158) per depositor per insured financial intuition, including both principal and interest. For the cash placed in financial institutions in the United States, the Company’s U.S. bank accounts are all fully covered by the FDIC insurance as of June 30, 2024 and December 31, 2023, while for the cash placed in financial institutions in the PRC, the balances exceeding the maximum coverage of RMB500,000 amounted to RMB36,551,963 ($5,128,804) as of June 30, 2024.

Risks and Uncertainties

6 Months Ended

Jun. 30, 2024

Risks and Uncertainties [Abstract]

Risks and Uncertainties

(22) Risks and Uncertainties

The Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, foreign currency exchange rates, and operating in the PRC under its various laws and restrictions.

Subsequent Event

6 Months Ended

Jun. 30, 2024

Subsequent Event [Abstract]

Subsequent Event

(23) Subsequent Event

None.

Pay vs Performance Disclosure - USD ($)	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (77,747)	$ (1,253,493)	$ (3,824,283)	$ (3,986,658)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Accounting Policies, by Policy (Policies)	6 Months Ended
Accounting Policies, by Policy (Policies)	Jun. 30, 2024
Basis of Presentation and Significant Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of June 30, 2024 and the results of operations for the six months ended June 30, 2024 are not necessarily indicative of the results to be expected for any future period. Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates.
Valuation of long-lived asset	Valuation of long-lived asset The Company reviews the carrying value of long-lived assets to be held and used when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose.
Fair Value Measurements	Fair Value Measurements The Company has adopted ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts that the Company could realize in a current market exchange. As of June 30, 2024 and December 31, 2023, the carrying value of the Company’s short term financial instruments, such as cash and cash equivalents, accounts receivable, accounts and notes payable, short-term bank loans, balance due to a related party and obligation under capital lease, approximate at their fair values because of the short maturity of these instruments; while loans from credit union and loans from a related party approximate at their fair value as the interest rates thereon are close to the market rates of interest published by the People’s Bank of China. Management determined that liabilities created by beneficial conversion features associated with the issuance of certain warrants (see “Derivative liabilities” under Note (12)), meet the criteria of derivatives and are required to be measured at fair value. The fair value of these derivative liabilities was determined based on management’s estimate of the expected future cash flows required to settle the liabilities. This valuation technique involves management’s estimates and judgment based on unobservable inputs and is classified in level 3.
Non-Recurring Fair Value Measurements	Non-Recurring Fair Value Measurements The Company reviews long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow.
Share-Based Compensation	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 services. 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.

Organization and Business Background (Tables)

6 Months Ended

Jun. 30, 2024

Organization and Business Background [Abstract]

Schedule of Subsidiaries and Variable Interest Entities

As of June 30, 2024 and December 31, 2023, details of the Company’s subsidiaries and variable interest entities are as follows:

Name		Date of Incorporation or Establishment		Place of Incorporation or Establishment		Percentage of Ownership		Principal Activity
Subsidiary:
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		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.

Schedule of Aggregate Carrying Value of Dongfang Paper’s Assets and Liabilities

The Company and its consolidated subsidiaries are not required to provide financial support to the VIE, and no creditor (or beneficial interest holders) of the VIE have recourse to the assets of Company unless the Company separately agrees to be subject to such claims. There are no terms in any agreements or arrangements, implicit or explicit, which require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE does require financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIE.

		June 30,				December 31,
		2024				2023
ASSETS

Current Assets
Cash and bank balances		$	4,603,402			$	2,807,608
Restricted cash			899,508				472,983
Accounts receivable			2,638,219				575,526
Inventories			5,282,420				3,555,235
Prepayments and other current assets			17,353,714				18,617,351
Due from related parties			287,384				289,173

Total current assets			31,064,647				26,317,876

Operating lease right-of-use assets, net			476,771				528,648
Property, plant, and equipment, net			150,495,716				158,027,099
Deferred tax asset non-current			-				-

Total Assets		$	182,037,134			$	184,873,623

LIABILITIES

Current Liabilities
Short-term bank loans		$	420,946			$	-
Current portion of long-term loans			4,993,826				2,780,014
Lease liability			103,568				100,484
Accounts payable			-				4,991
Advance from customers			73,386				136,167
Accrued payroll and employee benefits			329,583				231,568
Other payables and accrued liabilities			11,925,967				11,843,973
Income taxes payable			415,635				-

Total current liabilities			18,262,911				15,097,197

Long-term loans			2,245,047				4,503,932
Lease liability - non-current			498,718				483,866

Total liabilities		$	21,006,676			$	20,084,995

Inventories (Tables)

6 Months Ended

Jun. 30, 2024

Inventories [Abstract]

Schedule of Inventories

Inventories consisted of the following as of June 30, 2024 and December 31, 2023:

		June 30,				December 31,
		2024				2023
Raw Materials
Recycled paper board		$	3,462,147			$	198,744
Recycled white scrap paper			10,581				10,647
Gas			65,761				21,428
Base paper and other raw materials			180,653				142,149
			3,719,142				372,968
Semi-finished Goods			298,349				300,207
Finished Goods			1,264,929				2,885,019
Total inventory, gross			5,282,420				3,558,194
Inventory reserve			-				(2,959	)
Total inventory, net		$	5,282,420			$	3,555,235

Prepayments and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2024

Prepayments and Other Current Assets [Abstract]

Schedule of Prepayments and Other Current Assets

Prepayments and other current assets consisted of the following as of June 30, 2024 and December 31, 2023:

		June 30,				December 31,
		2024				2023
Prepayment for purchase of materials		$	4,879,907			$	5,446,823
Value-added tax recoverable			13,268,074				13,409,459
Prepaid gas			87,028				116,372
Others			11,155				8,636
		$	18,246,164			$	18,981,290

Property, Plant and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment, Net [Abstract]

Schedule of Property, Plant and Equipment

As of June 30, 2024 and December 31, 2023, property, plant and equipment consisted of the following:

		June 30,				December 31,
		2024				2023

Land use rights		$	81,000,265			$	81,504,608
Building and improvements			67,156,279				67,939,059
Machinery and equipment			157,513,260				158,629,858
Vehicles			346,054				348,209
Construction in progress			-				-
Totals			306,015,858				308,421,734
Less: accumulated depreciation and amortization			(150,391,106	)			(144,447,712	)
Property, Plant and Equipment, net		$	155,624,752			$	163,974,022

Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Schedule of Lease Expense

The components of the Company’s lease expense are as follows:

		Six Months Ended
		June 30, 2024
		RMB

Operating lease cost			70,158
Short-term lease cost			-
Lease cost			70,158

Schedule of Leases Liabilities

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

		Six Months Ended
		June 30, 2024
		RMB
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflow from operating leases			-

Schedule of Maturities of its Lease Liabilities

Maturities of its lease liabilities for all operating leases are as follows as of June 30, 2024:

June 30,		Amount
2025			140,315
2026			140,315
2027			140,315
2028			140,315
2029			140,315
Thereafter			-
Total operating lease payments		$	701,577
Less: Interest			(99,291	)
Present value of lease liabilities			602,286
Less: current portion, record in current liabilities			(103,568	)
Present value of lease liabilities			498,718

Schedule of Weighted Average Remaining Lease Terms and Discount Rates

The weighted average remaining lease terms and discount rates for all of its operating leases were as follows as of June 30, 2024:

		June 30,
		2024
		RMB
Remaining lease term and discount rate:
Weighted average remaining lease term (years)			4.1
Weighted average discount rate			7.56	%

Loans Payable (Tables)

6 Months Ended

Jun. 30, 2024

Loans Payable [Abstract]

Schedule of Short-Term Bank Loans

Short-term bank loans

		June 30,				December 31,
		2024				2023
Bank of Cangzhou 1		$	140,315			$	-
Bank of Cangzhou 2			280,631				-
Industrial and Commercial Bank of China (“ICBC”) Loan 1			-				2,824
ICBC Loan 2			-				70,594
ICBC Loan 3			-				350,149
ICBC Loan 4			2,806				-
ICBC Loan 5			140,316				-
ICBC Loan 6			140,316				-
ICBC Loan 7			137,509				-
Total short-term bank loans		$	841,893			$	423,567

Schedule of Long-Term Loans

As of June 30, 2024 and December 31, 2023, long-term loans were $11,308,021 and $11,378,429, respectively.

		June 30,				December 31,
		2024				2023
Rural Credit Union of Xushui District Loan 1		$	3,506,482			$	3,528,315
Rural Credit Union of Xushui District Loan 2			2,245,047				2,259,026
Rural Credit Union of Xushui District Loan 3			1,824,101				1,835,458
Rural Credit Union of Xushui District Loan 4			2,525,678				2,541,404
Rural Credit Union of Xushui District Loan 5			1,206,713				1,214,226
Total			11,308,021				11,378,429
Less: Current portion of long-term loans			(6,817,927	)			(6,874,497	)
Long-term loans		$	4,490,094			$	4,503,932

Schedule of Long-Term Debt Repayments

As of June 30, 2024, the Company’s long-term debt repayments for the next coming years were as follows:

		Amount
Fiscal year
Remainder of 2024		$	6,817,927
2025			3,367,571
2026 & after			1,122,523
Total			11,308,021

Other Payables and Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2024

Other Payables and Accrued Liabilities [Abstract]

Schedule of Other Payables and Accrued Liabilities

		June 30,				December 31,
		2024				2023
Accrued electricity		$	115,216			$	3,054
Value-added tax payable			68,138				696
Accrued interest to a related party			594,617				598,319
Payable for purchase of property, plant and equipment			11,054,912				11,175,858
Accrued commission to salesmen			14,869				47,040
Accrued bank loan interest			1,207,344				1,070,708
Others			80,591				16,842
Totals		$	13,135,687			$	12,912,517

Derivative Liabilities (Tables)

6 Months Ended

Jun. 30, 2024

Derivative Liabilities [Abstract]

Schedule of Weighted-Average Assumptions

The following weighted-average assumptions were used in the June 30, 2024:

		Six months ended
		June 30, 2024
Expected term		0.68 - 2.75
Expected average volatility		84% - 102%
Expected dividend yield		-
Risk-free interest rate		0.19% - 4.71%

Schedule of Value Measurements

Value Measurements Using Significant Observable Inputs (Level 3)

Balance at December 31, 2023		$	54
Change in fair value of derivative liability			(49	)

Balance at June 30, 2024		$	5

Warrants (Tables)

6 Months Ended

Jun. 30, 2024

Warrants [Abstract]

Schedule of Stock Warrant Activities

A summary of stock warrant activities is as below:

		Six months ended June 30, 2024
		Number				Weight average exercise price
Outstanding and exercisable at beginning of the period			3,016,635			$	6.6907
Issued during the period			-
Exercised during the period			-
Cancelled or expired during the period			-
Outstanding and exercisable at end of the period			3,016,635			$	6.6907

Schedule of Outstanding and Exercisable Warrants

The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2024.

Warrants Outstanding										Warrants Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)				Weighted Average Exercise Price				Number of Shares				Weighted Average Exercise Price
3,016,635			1.59			$	6.6907				3,016,635			$	6.6907

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Income Per Share

For the three months ended June 30, 2024 and 2023, basic and diluted net loss per share are calculated as follows:

		Three Months Ended June 30,
		2024				2023
Basic loss per share
Net loss for the period - numerator		$	(77,747	)		$	(1,253,493	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Net loss per share		$	(0.008	)		$	(0.12	)

Diluted income per share
Net income for the period - numerator		$	(77,747	)		$	(1,253,493	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Effect of dilution			-				-
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Diluted loss per share		$	(0.008	)		$	(0.12	)

		Six Months Ended June 30,
		2024				2023
Basic loss per share
Net loss for the period - numerator		$	(3,824,283	)		$	(3,986,658	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Net loss per share		$	(0.38	)		$	(0.40	)

Diluted loss per share
Net loss for the period - numerator		$	(3,824,283	)		$	(3,986,658	)
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Effect of dilution			-				-
Weighted average common stock outstanding - denominator			10,065,920				10,065,920

Diluted loss per share		$	(0.38	)		$	(0.40	)

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2024

Income Taxes [Abstract]

Schedule of Provisions for Income Taxes

The provisions for income taxes for three months ended June 30, 2024 and 2023 were as follows:

		Three Months Ended
		June 30,
		2024				2023
Provision for Income Taxes
Current Tax Provision U.S.		$				$	-
Current Tax Provision PRC			416,770				351,260
Deferred Tax Provision PRC			-				-
Total Provision for (Deferred tax benefit)/ Income Taxes		$	416,770			$	351,260

The provisions for income taxes for six months ended June 30, 2024 and 2023 were as follows:

		Six Months Ended
		June 30,
		2024				2023
Provision for Income Taxes
Current Tax Provision U.S.		$	36,793			$	-
Current Tax Provision PRC			416,770				351,260
Deferred Tax Provision PRC			-				-
Total Provision for (Deferred tax benefit)/ Income Taxes		$	453,563			$	351,260

Schedule of Deferred Tax

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

		June 30,				December 31,
		2024				2023
Deferred tax assets (liabilities)
Depreciation and amortization of property, plant and equipment		$	17,753,892			$	16,922,756
Impairment of property, plant and equipment			581,757				585,380
Miscellaneous			648,269				135,714
Net operating loss carryover of PRC company			156,717				274,525
(Gain) Loss on asset disposal			(63,669	)			(64,065	)
Total deferred tax assets			19,076,967				17,854,310
Less: Valuation allowance			(19,076,967	)			(17,854,310	)
Total deferred tax assets, net		$	-				-

Schedule of Effective Income Tax Rate

During the three months ended June 30, 2024 and 2023, the effective income tax rate was estimated by the Company to be 122.9% and -38.9%, respectively

		Three Months Ended
		June 30,
		2024				2023
PRC Statutory rate			25.0	%			25.0	%
Effect of different tax jurisdiction
Effect of tax and book difference			(15.4	)%			(121.4	)%
Change in valuation allowance			113.3	%			57.5	%
Effective income tax rate			122.9	%			(38.9	)%

During the six months ended June 30, 2024 and 2023, the effective income tax rate was estimated by the Company to be -13.5% and -9.7%, respectively

		Six Months Ended
		June 30,
		2024				2023
PRC Statutory rate			25.0	%			25.0	%
Effect of different tax jurisdiction
Effect of tax and book difference			(2.2	)%			(42.7	)%
Change in valuation allowance			36.3	%			8.0	%
Effective income tax rate			(13.5	)%			(9.7	)%

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies [Abstract]

Schedule of Annual Rental Payment

This lease is renewable at the end of the 30-year term.

June 30,		Amount
2025			16,838
2026			16,838
2027			16,838
2028			16,838
2029			16,838
Thereafter			42,095
Total operating lease payments			126,285

Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Schedule of Financial Information for Reportable Segments

Summarized financial information for the three reportable segments is as follows:

		Three Months Ended
		June 30, 2024
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	26,212,815			$	36,973			$	-			$	-			$	-			$	26,249,788
Gross profit			3,228,326				36,973				-				-				-				3,265,299
Depreciation and amortization			893,311				2,096,538				391,246				-				-				3,381,095
Interest income			2,088				548				170				1				-				2,807
Interest expense			90,393				45,263				72,123				3,772				-				211,551
Income tax expense(benefit)			416,770				-				-				-				-				416,770
Net income (loss)			2,202,788				(2,111,359	)			(82,396	)			(86,780	)			-				(77,747	)

		Three Months Ended
		June 30, 2023
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	29,631,400			$	344,268			$	44,246			$	-			$	-			$	30,019,914
Gross profit			1,893,087				(709,660	)			(3,569	)			-				-				1,179,858
Depreciation and amortization			996,939				2,071,666				395,209				-				-				3,463,814
Loss on impairment of assets			-				-				375,136				-				-				375,136
Interest income			47,763				844				4,486				544				-				53,637
Interest expense			144,083				53,991				72,607				-				-				270,681
Income tax expense(benefit)			351,260				-				-				-				-				351,260
Net income (loss)			937,333				(1,487,869	)			(443,841	)			(259,116	)			-				(1,253,493	)

		Six Months Ended
		June 30, 2024
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	33,039,614				74,015				-				-				-				33,113,629
Gross profit			3,590,661				73,751				-				-				-				3,664,412
Depreciation and amortization			1,882,583				4,197,079				783,221				-				-				6,862,883
Interest income			3,550				1,084				343				13				-				4,990
Interest expense			179,900				90,117				144,368				7,456				-				421,841
Income tax expense(benefit)			416,770				-				-				36,793				-				453,563
Net income (loss)			1,068,547				(4,234,116	)			(136,908	)			(521,806	)			-				(3,824,283	)

		Six Months Ended
		June 30, 2023
		Dongfang				Tengsheng				Baoding				Not Attributable				Elimination of				Enterprise- wide,
		Paper				Paper				Shengde				to Segments				Inter-segment				consolidated

Revenues		$	49,159,596				571,312				79,883				-				-				49,810,791
Gross profit			2,332,167				(1,422,900	)			(6,408	)			-				-				902,859
Depreciation and amortization			2,137,405				4,209,594				803,058				-				-				7,150,057
Loss from impairment and disposal of property, plant and equipment			-				-				375,136				-				-				375,136
Interest income			180,946				1,537				5,721				1,701				-				189,905
Interest expense			290,785				82,565				146,500				-				-				519,850
Income tax expense(benefit)			351,260				-				-				-				-				351,260
Net income (loss)			367,869				(3,407,989	)			(543,126	)			(403,412	)			-				(3,986,658	)

As of June 30, 2024

Dongfang

Tengsheng

Baoding

Not
Attributable

Elimination of

Enterprise-
wide,

Paper

Paper

Shengde

to Segments

Inter-segment

consolidated

Total assets

$

59,259,853

122,777,281

7,338,286

1,986,806

-

191,362,226

As of December 31, 2023

Dongfang

Tengsheng

Baoding

Not Attributable

Elimination of

Enterprise-
wide,

Paper

Paper

Shengde

to Segments

Inter-segment

consolidated

Total assets

$

57,139,592

127,734,031

8,184,902

1,685,124

-

194,743,649

Organization and Business Background (Details)
¥ / shares in Units, $ / shares in Units, ¥ in Millions

3 Months Ended

6 Months Ended

Jun. 09, 2022

$ / shares

Feb. 23, 2022

USD ($)

Feb. 23, 2022

CNY (¥)

Feb. 10, 2010

USD ($)

Jun. 24, 2009

USD ($)

Oct. 29, 2007

shares

Jun. 30, 2024

$ / shares

Dec. 31, 2023

$ / shares

Jun. 30, 2023

Jun. 30, 2024

$ / shares

Jun. 30, 2023

Feb. 10, 2010

¥ / shares

Jun. 10, 2009

USD ($)

Organization and Business Background [Line Items]

Common stock, par value (in Dollars per share) | $ / shares

$ 0.001

$ 0.001

$ 0.001

$ 0.001

Reverse stock split

1-for-10

Percentage of ownership

100.00%

Registered capital (in Dollars)

$ 60,000,000

Exercise price per share (in Yuan Renminbi per share) | ¥ / shares

¥ 1

Percentage of distributable profit

100.00%

Dongfang Holding [Member]

Organization and Business Background [Line Items]

Aggregate shares of common stock (in Shares) | shares

7,450,497

Percentage of ownership

100.00%

Percentage of total assets

95.13%

95.13%

Baoding Shengde [Member]

Organization and Business Background [Line Items]

Percentage of ownership

100.00%

Registered capital (in Dollars)

$ 10,000,000

Loan agreement to terminate (in Dollars)

$ 10,000,000

Dongfang Paper [Member]

Organization and Business Background [Line Items]

Percentage of ownership

100.00%

Percentage of annual net profits

80.00%

Principal amount (in Dollars)

$ 10,000,000

Loan amount (in Dollars)

$ 10,000,000

Percentage of revenue

100.00%

100.00%

Hebei Tengsheng [Member]

Organization and Business Background [Line Items]

Consideration amount

$ 45,000,000

¥ 320

Tengsheng Paper [Member]

Organization and Business Background [Line Items]

Percentage of ownership

^[1]

Percentage of revenue

99.72%

99.84%

Percentage of total assets

94.93%

Subsidiary ownership interest

100.00%

[1]	Tengsheng Paper is 100% subsidiary of Dongfang Paper.

Organization and Business Background (Details) - Schedule of Subsidiaries and Variable Interest Entities

3 Months Ended

6 Months Ended

Dec. 31, 2023

Jun. 30, 2024

Dongfang Holding [Member]

Subsidiary:

Date of Incorporation or Establishment

Nov. 13, 2006

Place of Incorporation or Establishment

BVI

Percentage of Ownership

100.00%

Principal Activity

Inactive investment holding

Shengde Holdings [Member]

Subsidiary:

Date of Incorporation or Establishment

Feb. 25, 2009

Place of Incorporation or Establishment

State of Nevada

Percentage of Ownership

100.00%

Principal Activity

Investment holding

Baoding Shengde [Member]

Subsidiary:

Date of Incorporation or Establishment

Jun. 01, 2009

Place of Incorporation or Establishment

PRC

Percentage of Ownership

100.00%

Principal Activity

Paper production and distribution

Qianrong [Member]

Subsidiary:

Date of Incorporation or Establishment

Jul. 15, 2021

Place of Incorporation or Establishment

PRC

Percentage of Ownership

100.00%

Principal Activity

New material technology service

Dongfang Paper [Member]

Variable interest entity (“VIE”):

Date of Incorporation or Establishment

Mar. 10, 1996

Place of Incorporation or Establishment

PRC

Percentage of Ownership

^[1]

Principal Activity

Paper production and distribution

Tengsheng Paper [Member]

Subsidiary:

Percentage of Ownership

100.00%

Variable interest entity (“VIE”):

Date of Incorporation or Establishment

Apr. 07, 2011

Place of Incorporation or Establishment

PRC

Percentage of Ownership

^[2]

Principal Activity

Paper production and distribution

[1]	Dongfang Paper is treated as a 100% controlled variable interest entity of the Company.
[2]	Tengsheng Paper is 100% subsidiary of Dongfang Paper.

Organization and Business Background (Details) - Schedule of Aggregate Carrying Value of Dongfang Paper’s Assets and Liabilities - VIE [Member] - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Aggregate Carrying Value of Dongfang Paper’s Assets and Liabilities [Line Items]
Cash and bank balances	$ 4,603,402	$ 2,807,608
Restricted cash	899,508	472,983
Accounts receivable	2,638,219	575,526
Inventories	5,282,420	3,555,235
Prepayments and other current assets	17,353,714	18,617,351
Due from related parties	287,384	289,173
Total current assets	31,064,647	26,317,876
Operating lease right-of-use assets, net	476,771	528,648
Property, plant, and equipment, net	150,495,716	158,027,099
Deferred tax asset non-current
Total Assets	182,037,134	184,873,623
Current Liabilities
Short-term bank loans	420,946
Current portion of long-term loans	4,993,826	2,780,014
Lease liability	103,568	100,484
Accounts payable		4,991
Advance from customers	73,386	136,167
Accrued payroll and employee benefits	329,583	231,568
Other payables and accrued liabilities	11,925,967	11,843,973
Income taxes payable	415,635
Total current liabilities	18,262,911	15,097,197
Long-term loans	2,245,047	4,503,932
Lease liability - non-current	498,718	483,866
Total liabilities	$ 21,006,676	$ 20,084,995

Restricted Cash (Details) - USD ($)	6 Months Ended
Restricted Cash (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Restricted Cash [Line Items]
Restricted cash	$ 470,057	$ 472,983
Bank of cangzhou [Member]
Restricted Cash [Line Items]
Notes payable maturity	Jul. 16, 2024
Bank of cangzhou [Member]
Restricted Cash [Line Items]
Restricted cash	$ 429,451

Inventories (Details) - Schedule of Inventories - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Raw Materials
Raw Materials	$ 3,719,142	$ 372,968
Semi-finished Goods	298,349	300,207
Finished Goods	1,264,929	2,885,019
Total inventory, gross	5,282,420	3,558,194
Inventory reserve		(2,959)
Total inventory, net	5,282,420	3,555,235
Recycled paper board [Member]
Raw Materials
Raw Materials	3,462,147	198,744
Recycled white scrap paper [Member]
Raw Materials
Raw Materials	10,581	10,647
Gas [Member]
Raw Materials
Raw Materials	65,761	21,428
Base paper and other raw materials [Member]
Raw Materials
Raw Materials	$ 180,653	$ 142,149

Prepayments and Other Current Assets (Details) - Schedule of Prepayments and Other Current Assets - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Prepayments and Other Current Assets [Abstract]
Prepayment for purchase of materials	$ 4,879,907	$ 5,446,823
Value-added tax recoverable	13,268,074	13,409,459
Prepaid gas	87,028	116,372
Others	11,155	8,636
Total	$ 18,246,164	$ 18,981,290

Property, Plant and Equipment, Net (Details) - USD ($)	3 Months Ended		6 Months Ended
Property, Plant and Equipment, Net (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Property, Plant and Equipment, Net [Line Items]
Lease terms	50 years		50 years		50 years
Property, plant and equipment net	$ 155,624,752		$ 155,624,752		$ 163,974,022
Land use right net value	4,822,130		4,822,130		4,910,034
Property, plant and equipment	276,269		276,269
Depreciation and amortization of property, plant and equipment	3,381,095	$ 3,463,814	6,862,883	$ 7,150,057
Dongfang Paper [Member]
Property, Plant and Equipment, Net [Line Items]
Property, plant and equipment net
Dongfang Paper [Member] \| Land use Right [Member] \| Long-term Loan from Credit Union of Tengsheng Peper [Member]
Property, Plant and Equipment, Net [Line Items]
Land use right net value	5,036,790		5,036,790		5,135,132
Tengsheng Paper [Member] \| Land use Right [Member] \| Long-term Loan from Credit Union of Baoding Shengde [Member]
Property, Plant and Equipment, Net [Line Items]
Land use right net value	$ 3,707,411		$ 3,707,411
Tengsheng Paper [Member] \| Land use Right [Member] \| Long-term Loan from Credit Union of Baoding Shengde [Member]
Property, Plant and Equipment, Net [Line Items]
Land use right net value					$ 3,781,366

Property, Plant and Equipment, Net (Details) - Schedule of Property, Plant and Equipment - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Property, Plant and Equipment [Line Items]
Totals	$ 306,015,858	$ 308,421,734
Less: accumulated depreciation and amortization	(150,391,106)	(144,447,712)
Property, Plant and Equipment, net	155,624,752	163,974,022
Land use rights [Member]
Schedule of Property, Plant and Equipment [Line Items]
Totals	81,000,265	81,504,608
Building and improvements [Member]
Schedule of Property, Plant and Equipment [Line Items]
Totals	67,156,279	67,939,059
Machinery and equipment [Member]
Schedule of Property, Plant and Equipment [Line Items]
Totals	157,513,260	158,629,858
Vehicles [Member]
Schedule of Property, Plant and Equipment [Line Items]
Totals	346,054	348,209
Construction in progress [Member]
Schedule of Property, Plant and Equipment [Line Items]
Totals

Leases (Details)				3 Months Ended		6 Months Ended
Leases (Details)	Aug. 17, 2020 USD ($)	Aug. 06, 2020 USD ($)	Aug. 06, 2020 CNY (¥)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2024 CNY (¥)	Jun. 30, 2023 USD ($)	Nov. 30, 2024	Dec. 31, 2023 USD ($)
Leases [Line Items]
Leases back term		3 years	3 years
Implicit interest rate	15.60%
Sale lease-back transaction interest rate amount	$ 567,099
Leased equipment net				$ 476,771		$ 476,771				$ 528,648
Amortization of leased equipment					$ 37,661			$ 76,526
Interest expenses					$ 2,182			$ 6,671
TAC Leasing Co., Ltd. [Member]
Leases [Line Items]
Sale-leaseback arrangement sold leased equipment		$ 2,300,000	¥ 16,000,000
TLCL [Member]
Leases [Line Items]
Payment of nominal purchase price						14	¥ 100
Right of use assets and net present value of minimum lease payments	$ 2,349,452
Equipment [Member]
Leases [Line Items]
Leased equipment net
Forecast [Member]
Leases [Line Items]
Operating lease									1 year
Lease Financing Agreement [Member]
Leases [Line Items]
Total financing proceeds in amount		$ 2,300,000	¥ 16,000,000

Leases (Details) - Schedule of Lease Expense	6 Months Ended
Leases (Details) - Schedule of Lease Expense	Jun. 30, 2024 CNY (¥)
Schedule of Lease Expense [Abstract]
Operating lease cost	¥ 70,158
Short-term lease cost
Lease cost	¥ 70,158

Leases (Details) - Schedule of Leases Liabilities	6 Months Ended
Leases (Details) - Schedule of Leases Liabilities	Jun. 30, 2024 CNY (¥)
Schedule of Leases Liabilities [Abstract]
Operating cash outflow from operating leases

Leases (Details) - Schedule of Maturities of its Lease Liabilities - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Maturities of its Lease Liabilities [Abstract]
2025	$ 140,315
2026	140,315
2027	140,315
2028	140,315
2029	140,315
Thereafter
Total operating lease payments	701,577
Less: Interest	(99,291)
Present value of lease liabilities	602,286
Less: current portion, record in current liabilities	(103,568)	$ (100,484)
Present value of lease liabilities	$ 498,718	$ 483,866

Leases (Details) - Schedule of Weighted Average Remaining Lease Terms and Discount Rates	Jun. 30, 2024
Schedule of Weighted Average Remaining Lease Terms and Discount Rates [Abstract]
Weighted average remaining lease term (years)	4 years 1 month 6 days
Weighted average discount rate	7.56%

Loans Payable (Details) - USD ($)	3 Months Ended		6 Months Ended
Loans Payable (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Dec. 05, 2023	Aug. 24, 2023	Feb. 26, 2023	Nov. 15, 2022	Apr. 17, 2019	Jun. 21, 2018	Jul. 15, 2013
Loan Payable [Line Items]
Borrow amount					$ 280,631
Loans fixed interest rate, percentage	3.45%		3.45%		5.50%
Short-term bank loans	$ 841,893		$ 841,893		$ 423,567
Working capital loan	140,316		140,316
Short-term borrowings
Unsecured bank loans	$ 701,577		$ 701,577		423,567
Average short-term borrowing rates	4.45%	4.83%	4.46%	4.77%
Long-term loan	$ 11,308,021		$ 11,308,021		11,378,429
Long term debt term										5 years
Long term due date						Dec. 05, 2026
Loan agreement, term			3 years
Current portion of loan amount	6,817,927		$ 6,817,927		6,874,497
Interest expense short-term bank loans and long-term loans	211,551	$ 268,499	421,841	$ 513,179
Bank of cangzhou [Member]
Loan Payable [Line Items]
Borrow amount					$ 140,315
Loans fixed interest rate, percentage					5.50%
Net book value	$ 276,269		$ 276,269
Loan due date	Dec. 30, 2024		Dec. 30, 2024
ICBC [Member]
Loan Payable [Line Items]
Loans fixed interest rate, percentage	3.45%		3.45%
Loan due date	Jun. 21, 2025		Jun. 21, 2025
Short-term bank loans					$ 70,594
ICBC Loan 3 [Member]
Loan Payable [Line Items]
Loans fixed interest rate, percentage	3.45%		3.45%
Loan due date	Jun. 11, 2025		Jun. 11, 2025
Short-term bank loans					350,149
ICBC Loan 4 [Member]
Loan Payable [Line Items]
Loans fixed interest rate, percentage	3.45%		3.45%
Short-term bank loans	$ 2,806		$ 2,806
Working capital loan	137,509		137,509
Industrial and Commercial Bank of China (“ICBC”) Loan 1 [Member]
Loan Payable [Line Items]
Short-term bank loans					2,824
Short-term borrowings
Rural Credit Union of Xushui District Loan 2 [Member]
Loan Payable [Line Items]
Long-term loan	2,245,047		$ 2,245,047		2,259,026
Long term debt term							3 years				5 years	5 years
Long term debt, description			originally due and payable in various installments from December 21, 2013 to July 26, 2018.
Long term due date							Aug. 24, 2026
Secured loan net book value
Interest payment percent	7.68%		7.68%						7.00%
Current portion of loan amount	$ 1,963,012		$ 1,963,012		1,269,290
Non-current liabilities	1,543,470		1,543,470		2,259,025
Rural Credit Union of Xushui District Loan 1 [Member]
Loan Payable [Line Items]
Long-term loan	3,506,482		$ 3,506,482		3,528,315
Interest payment percent									7.00%
Rural Credit Union of Xushui District [Member]
Loan Payable [Line Items]
Long term debt term										2 years
Long term due date						Jun. 21, 2024
Loan agreement, term			2 years
Rural Credit Union of Xushui District Loan 3 [Member]
Loan Payable [Line Items]
Long-term loan	$ 1,824,101		$ 1,824,101		1,835,458
Interest payment percent	7.68%		7.68%						7.00%
Rural Credit Union of Xushui District Loan 4 [Member]
Loan Payable [Line Items]
Long-term loan	$ 2,525,678		$ 2,525,678		2,541,404
Interest payment percent	7.56%		7.56%
Rural Credit Union of Xushui District Loan 5 [Member]
Loan Payable [Line Items]
Long-term loan	$ 1,206,713		$ 1,206,713		1,214,226
Long term debt term								2 years
Interest payment percent	7.00%		7.00%
Current portion of loan amount	$ 2,525,678		$ 2,525,678		1,284,820
Non-current liabilities					1,256,584
Non-current liabilities
Rural Credit Union of Xushui District Loan 6 [Member]
Loan Payable [Line Items]
Long term debt term						3 years
Interest payment percent	7.00%		7.00%
Jiangna Yu [Member]
Loan Payable [Line Items]
Non-current liabilities	$ 701,577		$ 701,577		988,323
Current portion of loan amount		$ 505,136		$ 505,136	225,903
Working Capital Loan Agreement [Member] \| ICBC [Member]
Loan Payable [Line Items]
Loans fixed interest rate, percentage	3.45%		3.45%
Loan due date	Dec. 30, 2024		Dec. 30, 2024
Short-term bank loans					$ 2,824
Working Capital Loan Agreement [Member] \| ICBC Loan 1 [Member]
Loan Payable [Line Items]
Loans fixed interest rate, percentage	3.45%		3.45%
Short-term bank loans	$ 2,806		$ 2,806
Working Capital Loan Agreement [Member] \| ICBC Loan 4 [Member]
Loan Payable [Line Items]
Loans fixed interest rate, percentage	3.45%		3.45%
Working capital loan	$ 140,316		$ 140,316

Loans Payable (Details) - Schedule of Short-Term Bank Loans - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans	$ 841,893	$ 423,567
Bank of Cangzhou 1 [Member]
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans	140,315
Bank of Cangzhou 2 [Member]
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans	280,631
Industrial and Commercial Bank of China (“ICBC”) Loan 1 [Member]
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans		2,824
ICBC Loan 2 [Member]
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans		70,594
ICBC Loan 3 [Member]
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans		350,149
ICBC Loan 4 [Member]
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans	2,806
ICBC Loan 5 [Member]
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans	140,316
ICBC Loan 6 [Member]
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans	140,316
ICBC Loan 7 [Member]
Schedule of Short-Term Bank Loans [Line Items]
Total short-term bank loans	$ 137,509

Loans Payable (Details) - Schedule of Long-Term Loans - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Long-Term Loans [Line Items]
Total	$ 11,308,021	$ 11,378,429
Less: Current portion of long-term loans	(6,817,927)	(6,874,497)
Long-term loans	4,490,094	4,503,932
Rural Credit Union of Xushui District Loan 1 [Member]
Schedule of Long-Term Loans [Line Items]
Total	3,506,482	3,528,315
Rural Credit Union of Xushui District Loan 2 [Member]
Schedule of Long-Term Loans [Line Items]
Total	2,245,047	2,259,026
Rural Credit Union of Xushui District Loan 3 [Member]
Schedule of Long-Term Loans [Line Items]
Total	1,824,101	1,835,458
Rural Credit Union of Xushui District Loan 4 [Member]
Schedule of Long-Term Loans [Line Items]
Total	2,525,678	2,541,404
Rural Credit Union of Xushui District Loan 5 [Member]
Schedule of Long-Term Loans [Line Items]
Total	$ 1,206,713	$ 1,214,226

Loans Payable (Details) - Schedule of Long-Term Debt Repayments - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Long-Term Debt Repayments [Abstract]
Remainder of 2024	$ 6,817,927
2025	3,367,571
2026 & after	1,122,523
Total	$ 11,308,021	$ 11,378,429

Related Party Transactions (Details)			1 Months Ended			6 Months Ended		12 Months Ended
Related Party Transactions (Details)	Nov. 23, 2018 USD ($)	Dec. 10, 2014 USD ($)	Dec. 31, 2019 shares	Feb. 28, 2018 USD ($)	Dec. 31, 2015 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2016 USD ($)	Aug. 31, 2023 USD ($)	Aug. 31, 2023 CNY (¥)	Nov. 30, 2022 USD ($)	Nov. 30, 2022 CNY (¥)	Oct. 31, 2022 USD ($)	Oct. 31, 2022 CNY (¥)	Oct. 14, 2016 USD ($)	Jul. 13, 2015 USD ($)	Mar. 01, 2015 USD ($)	Mar. 01, 2015 CNY (¥)
Related Party Transactions [Line Items]
Loans repaid										$ 4,235,673	¥ 30,000,000
loan amount						$ 727,433		$ 727,433
Borrowings amount								280,631
Unsecured amount						701,577		423,567
Loan term				3 years
Interest amount
Interest paid (in Shares) \| shares			94,636
Loans amount
Borrowing amount												$ 7,059,455	¥ 50,000,000	$ 7,059,455	¥ 50,000,000
Interest income							$ 176,847
Mr. Zhengyong Liu [Member]
Related Party Transactions [Line Items]
Loans repaid					$ 2,249,279
Interest paid				$ 20,400	$ 391,374	42,095		42,357	$ 288,596
Outstanding loan balance						$ 359,676		361,915
loan amount		$ 8,742,278
Interest rate on loans		4.35%
Due date		Dec. 10, 2017		Jul. 12, 2018
Repaid debt									$ 6,012,416
Repayment of related party loans				$ 1,507,432
Fixed interest rate						4.35%
Loans Payable [Member]
Related Party Transactions [Line Items]
Outstanding loan balance						$ 192,846		194,047
Dongfang Paper [Member] \| Mr. Zhenyong Liu [Member]
Related Party Transactions [Line Items]
Repayment of related party loans	$ 3,768,579
Interest amount	$ 158,651
Chief Executive Officer [Member]
Related Party Transactions [Line Items]
Borrowings amount																		$ 17,201,342	¥ 120,000,000
Unsecured amount																$ 2,883,091	$ 4,324,636
Chief Executive Officer [Member] \| Mr. Zhenyong Liu [Member]
Related Party Transactions [Line Items]
Accrued interest						$ 594,617		$ 598,319

Notes Payable (Details) - USD ($)	6 Months Ended
Notes Payable (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Notes Payable [Abstract]
Bank acceptance notes (in Dollars)	$ 429,451
Bank acceptance notes percentage
Percentage of handling change	0.05%

Other Payables and Accrued Liabilities (Details) - Schedule of Other Payables and Accrued Liabilities - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Other Payables and Accrued Liabilities [Abstract]
Accrued electricity	$ 115,216	$ 3,054
Value-added tax payable	68,138	696
Accrued interest to a related party	594,617	598,319
Payable for purchase of property, plant and equipment	11,054,912	11,175,858
Accrued commission to salesmen	14,869	47,040
Accrued bank loan interest	1,207,344	1,070,708
Others	80,591	16,842
Totals	$ 13,135,687	$ 12,912,517

Derivative Liabilities (Details) - Schedule of Weighted-Average Assumptions	6 Months Ended
	Jun. 30, 2024
Schedule of Weighted-Average Assumptions [Line Items]
Expected dividend yield
Minimum [Member]
Schedule of Weighted-Average Assumptions [Line Items]
Expected term	8 months 4 days
Expected average volatility	84.00%
Risk-free interest rate	0.19%
Maximum [Member]
Schedule of Weighted-Average Assumptions [Line Items]
Expected term	2 years 9 months
Expected average volatility	102.00%
Risk-free interest rate	4.71%

Derivative Liabilities (Details) - Schedule of Value Measurements	6 Months Ended
	Jun. 30, 2024 USD ($)
Schedule of Value Measurements [Abstract]
Balance at December 31, 2023	$ 54
Change in fair value of derivative liability	(49)
Balance at June 30, 2024	$ 5

Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions	Jun. 09, 2022	Mar. 01, 2021	Jan. 20, 2021
Common Stock [Abstract]
Aggregate share			2,618,182
Common stock shares			2,618,182
Warrants to purchase shares			2,618,182
Gross proceeds (in Dollars)		$ 21.9	$ 14.4
corresponding warrant price per share (in Dollars per share)			$ 5.5
Exercise price of warrant (in Dollars per share)		$ 7.5	$ 5.5
Investors an aggregate shares		2,927,786
Warrants to purchase shares		1,463,893
Shares of common stock		1,463,893
Warrant price (in Dollars per share)		$ 7.5
Reverse stock split	1-for-10
Reverse stock split, per share (in Dollars per share)	$ 0.001

Warrants (Details) - USD ($)				6 Months Ended
Warrants (Details) - USD ($)	Mar. 01, 2021	Jan. 20, 2021	Apr. 29, 2020	Jun. 30, 2024	Dec. 31, 2023
Warrants [Line Items]
Issuance of common stock and warrants		2,618,182
Issuance of warrant	6,750	1,410,690	88,000
Warrant exercise price (in Dollars per share)	$ 7.5
Warrant outstanding				352,000
Warrants to purchase shares of common stock	1,463,893	2,618,182
Warrent expire date	Mar. 01, 2026	Jan. 20, 2026
Intrinsic value of the warrants (in Dollars)
Warrant [Member]
Warrants [Line Items]
Issuance of common stock and warrants	2,927,786		440,000
Exercise price (in Dollars per share)			$ 7.425
Warrant exercise price (in Dollars per share)	$ 7.5	$ 5.5	$ 7.425	$ 5.5
Warrant outstanding				1,207,492
Warrants to purchase shares of common stock	1,463,893	2,618,182
Common Stock [Member] \| Warrant [Member]
Warrants [Line Items]
Warrant outstanding				1,457,143
Private Placement [Member]
Warrants [Line Items]
Issuance of common stock and warrants			440,000

Warrants (Details) - Schedule of Stock Warrant Activities - Warrant [Member]	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Schedule of Stock Warrant Activities [Line Items]
Outstanding and exercisable at beginning of the period, Number	3,016,635
Outstanding and exercisable at beginning of the period, Weight average exercise price (in Dollars per share) \| $ / shares	$ 6.6907
Issued during the period, Number
Exercised during the period, Number
Cancelled or expired during the period, Number
Outstanding and exercisable at end of the period, Number	3,016,635
Outstanding and exercisable at end of the period, Weight average exercise price (in Dollars per share) \| $ / shares	$ 6.6907

Warrants (Details) - Schedule of Outstanding and Exercisable Warrants - Warrant [Member]	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Schedule of Outstanding and Exercisable Warrants [Line Items]
Warrants Outstanding, Number of Shares \| shares	3,016,635
Warrants Outstanding, Weighted Average Remaining Contractual life (in years)	1 year 7 months 2 days
Warrants Outstanding, Weighted Average Exercise Price \| $ / shares	$ 6.6907
Warrants Exercisable, Number of Shares \| shares	3,016,635
Warrants Exercisable, Weighted Average Exercise Price \| $ / shares	$ 6.6907

Earnings Per Share (Details) - Schedule of Basic and Diluted Net Income Per Share - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Basic loss per share
Net income (loss) for the period - numerator	$ (77,747)	$ (1,253,493)	$ (3,824,283)	$ (3,986,658)
Weighted average common stock outstanding - denominator	10,065,920	10,065,920	10,065,920	10,065,920
Net loss per share	$ (0.008)	$ (0.12)	$ (0.38)	$ (0.4)
Diluted income per share
Weighted average common stock outstanding - denominator	10,065,920	10,065,920	10,065,920	10,065,920
Diluted loss per share	$ (0.008)	$ (0.12)	$ (0.38)	$ (0.4)
Effect of dilution

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Income Taxes [Line Items]
Tax laws, percentage			21.00%
Net operating losses (in Dollars)					$ 62,499	$ 530,581
Description of carry forwards expire			These carry forwards would expire, if not utilized, during the period of 2030 through 2035.
Percentage of valuation allowance	100.00%		100.00%		100.00%
Effective income tax rate	(38.90%)	122.90%	(13.50%)	(9.70%)
Income tax, statute of limitations period			5 years
PRC [Member]
Income Taxes [Line Items]
Statutory tax rate			25.00%

Income Taxes (Details) - Schedule of Provisions for Income Taxes - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Provision for Income Taxes
Current Tax Provision U.S.			$ 36,793
Current Tax Provision PRC	$ 416,770	351,260	416,770	351,260
Deferred Tax Provision PRC
Total Provision for (Deferred tax benefit)/ Income Taxes	$ 416,770	$ 351,260	$ 453,563	$ 351,260

Income Taxes (Details) - Schedule of Deferred Tax - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Deferred tax assets (liabilities)
Depreciation and amortization of property, plant and equipment	$ 17,753,892	$ 16,922,756
Impairment of property, plant and equipment	581,757	585,380
Miscellaneous	648,269	135,714
Net operating loss carryover of PRC company	156,717	274,525
(Gain) Loss on asset disposal	(63,669)	(64,065)
Total deferred tax assets	19,076,967	17,854,310
Less: Valuation allowance	(19,076,967)	(17,854,310)
Total deferred tax assets, net

Income Taxes (Details) - Schedule of Effective Income Tax Rate	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Taxes [Abstract]
PRC Statutory rate	25.00%	25.00%	25.00%	25.00%
Effect of different tax jurisdiction
Effect of tax and book difference	(15.40%)	(121.40%)	(2.20%)	(42.70%)
Change in valuation allowance	113.30%	57.50%	36.30%	8.00%
Effective income tax rate	122.90%	(38.90%)	(13.50%)	(9.70%)

Stock Incentive Plans (Details)	Oct. 31, 2023 shares
Stock Incentive Plans [Abstract]
Number of shares	1,500,000

Commitments and Contingencies (Details)	6 Months Ended
Commitments and Contingencies (Details)	Jun. 30, 2024 USD ($) a	Jun. 30, 2024 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2023 CNY (¥)	Aug. 07, 2013 USD ($)
Commitments and Contingencies [Line Items]
Expiration term	December 31, 2031	December 31, 2031
Annual rental payment	$ 140,698	¥ 1,000,000
Outstanding commitments amount	3,465,791		$ 3,499,936
Long-term loan from financial institutions	$ 4,349,778			¥ 31,000,000
Employee One [Member]
Commitments and Contingencies [Line Items]
Building located employee					$ 2,770,000
Employee Two [Member]
Commitments and Contingencies [Line Items]
Building located employee					1,150,000
Employee Three [Member]
Commitments and Contingencies [Line Items]
Building located employee					$ 4,310,000
Xushui Land Lease [Member]
Commitments and Contingencies [Line Items]
Area of land (in Acres) \| a	32.95
Lease expiration period	30 years	30 years
Annual rental payment	$ 16,884	¥ 120,000
Minimum [Member]
Commitments and Contingencies [Line Items]
Expected payment term	1 year	1 year
Maximum [Member]
Commitments and Contingencies [Line Items]
Expected payment term	3 years	3 years

Commitments and Contingencies (Details) - Schedule of Annual Rental Payment - Land lease [Member]	Jun. 30, 2024 USD ($)
Commitments and Contingencies (Details) - Schedule of Annual Rental Payment [Line Items]
2025	$ 16,838
2026	16,838
2027	16,838
2028	16,838
2029	16,838
Thereafter	42,095
Total operating lease payments	$ 126,285

Segment Reporting (Details)	May 10, 2010
Segment Reporting [Abstract]
Number of reportable segments	3

Segment Reporting (Details) - Schedule of Financial Information for Reportable Segments - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Dongfang Paper [Member]
Schedule of Financial Information for Reportable Segments [Line Items]
Revenues	$ 26,212,815	$ 29,631,400	$ 33,039,614	$ 49,159,596
Gross profit	3,228,326	1,893,087	3,590,661	2,332,167
Depreciation and amortization	893,311	996,939	1,882,583	2,137,405
Loss from impairment and disposal of property, plant and equipment
Interest income	2,088	47,763	3,550	180,946
Interest expense	90,393	144,083	179,900	290,785
Income tax expense(benefit)	416,770	351,260	416,770	351,260
Net income (loss)	2,202,788	937,333	1,068,547	367,869
Total assets	59,259,853		59,259,853		$ 57,139,592
Tengsheng Paper [Member]
Schedule of Financial Information for Reportable Segments [Line Items]
Revenues	36,973	344,268	74,015	571,312
Gross profit	36,973	(709,660)	73,751	(1,422,900)
Depreciation and amortization	2,096,538	2,071,666	4,197,079	4,209,594
Loss from impairment and disposal of property, plant and equipment
Interest income	548	844	1,084	1,537
Interest expense	45,263	53,991	90,117	82,565
Income tax expense(benefit)
Net income (loss)	(2,111,359)	(1,487,869)	(4,234,116)	(3,407,989)
Total assets	122,777,281		122,777,281		127,734,031
Baoding Shengde [Member]
Schedule of Financial Information for Reportable Segments [Line Items]
Revenues		44,246		79,883
Gross profit		(3,569)		(6,408)
Depreciation and amortization	391,246	395,209	783,221	803,058
Loss from impairment and disposal of property, plant and equipment		375,136		375,136
Interest income	170	4,486	343	5,721
Interest expense	72,123	72,607	144,368	146,500
Income tax expense(benefit)
Net income (loss)	(82,396)	(443,841)	(136,908)	(543,126)
Total assets	7,338,286		7,338,286		8,184,902
Not Attributable to Segments [Member]
Schedule of Financial Information for Reportable Segments [Line Items]
Revenues
Gross profit
Depreciation and amortization
Loss from impairment and disposal of property, plant and equipment
Interest income	1	544	13	1,701
Interest expense	3,772		7,456
Income tax expense(benefit)			36,793
Net income (loss)	(86,780)	(259,116)	(521,806)	(403,412)
Total assets	1,986,806		1,986,806		1,685,124
Elimination of Inter-segment [Member]
Schedule of Financial Information for Reportable Segments [Line Items]
Revenues
Gross profit
Depreciation and amortization
Loss from impairment and disposal of property, plant and equipment
Interest income
Interest expense
Income tax expense(benefit)
Net income (loss)
Total assets
Enterprise-wide, consolidated [Member]
Schedule of Financial Information for Reportable Segments [Line Items]
Revenues	26,249,788	30,019,914	33,113,629	49,810,791
Gross profit	3,265,299	1,179,858	3,664,412	902,859
Depreciation and amortization	3,381,095	3,463,814	6,862,883	7,150,057
Loss from impairment and disposal of property, plant and equipment		375,136		375,136
Interest income	2,807	53,637	4,990	189,905
Interest expense	211,551	270,681	421,841	519,850
Income tax expense(benefit)	416,770	351,260	453,563	351,260
Net income (loss)	(77,747)	$ (1,253,493)	(3,824,283)	$ (3,986,658)
Total assets	$ 191,362,226		$ 191,362,226		$ 194,743,649

Concentration and Major Customers and Suppliers (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| No Customer [Member]
Concentration and Major Customers and Suppliers [Line Items]
Concentration credit risk, percentage	10.00%			10.00%
Supplier Concentration Risk [Member] \| Purchase [Member] \| one suppliers [Member]
Concentration and Major Customers and Suppliers [Line Items]
Concentration credit risk, percentage	76.00%	74.00%	76.00%	67.00%
Supplier Concentration Risk [Member] \| Purchase [Member] \| Two Suppliers [Member]
Concentration and Major Customers and Suppliers [Line Items]
Concentration credit risk, percentage	16.00%	16.00%	16.00%	13.00%
Supplier Concentration Risk [Member] \| Purchase [Member] \| Three Suppliers [Member]
Concentration and Major Customers and Suppliers [Line Items]
Concentration credit risk, percentage	7.00%	6.00%	7.00%	10.00%

Concentration of Credit Risk (Details)	May 01, 2015 USD ($)	May 01, 2015 CNY (¥)	Jun. 30, 2024 USD ($)	Jun. 30, 2024 CNY (¥)	Dec. 31, 2023 CNY (¥)
Concentration of Credit Risk [Line Items]
Deposit insurance regulations	$ 70,158	¥ 500,000
Maximum coverage from FDIC			$ 5,128,804	¥ 36,551,963
PRC [Member]
Concentration of Credit Risk [Line Items]
Maximum coverage from FDIC				¥ 500,000	¥ 500,000

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