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, 2022 and 2021 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.
Impact of COVID-19 on Our Operations and Financial Performance
Comparison of the Three months ended June 30, 2022 and 2021
Revenue of Offset Printing Paper, Corrugating Medium Paper and Tissue Paper Products
36,813,631 (8,413 ) $ (5,523,713 ) -11.37 % -15.00 % Offset Printing Paper
Monthly sales revenue for the 24 months ended June 30, 2022, are summarized below:
The Average Selling Prices (ASPs) for our main products in the three months ended June 30, 2022 and 2021 are summarized as follows:
Quantities sold for regular CMP that was produced by the PM6 production line from July 2020 to June 2022 are as follows:
Cost of sales for offset printing paper was $nil for the quarter ended June 30, 2022, as compared to $5,909,029 for the comparable period in 2021.
Changes in cost of sales and cost per tonne by product for the quarters ended June 30, 2022 and 2021 are summarized below:
The pricing trends of our major raw materials for the 24-month period from July 2020 to June 2022 are shown below:
Offset Printing Paper, CMP and Tissue Paper Products
Monthly gross profit margins on the sales of our CMP and offset printing paper for the 24-month period ended June 30, 2022 are as follows:
Gross profit for face masks for the three months ended June 30, 2022 and 2021 were $18,204 and $10,829, representing a gross margin of 20.79% and 9.95%, respectively.
Selling, General and Administrative Expenses
As a result and the factors discussed above, net loss was $287,913 for the quarter ended June 30, 2022, representing an increase of $165,335, or 36.48%, from $453,248 for the quarter ended June 30, 2021.
Comparison of the six months ended June 30, 2022 and 2021
Revenue of Offset Printing Paper, Corrugating Medium Paper and Tissue Paper Products
Changes in cost of sales and cost per tonne by product for the six months ended June 30, 2022 and 2021 are summarized below:
Offset Printing Paper, CMP and Tissue Paper Products
The overall gross profit margin for offset printing paper, CMP and tissue paper products decreased by 4.91 percentage points, from 6.84% for the six months ended June 30, 2021, to 1.93% for the six months ended June 30, 2022.
Selling, General and Administrative Expenses
A summary of changes in major inventory items is as follows:
Capital Expenditure Commitment as of June 30, 2022
As a result of the sale and leaseback, a deferred gain in the amount of $430,695 was recorded. The deferred gain is amortized over the lease term and as an offset to amortization of the Leased Equipment.
Our cash, cash equivalents and restricted cash as of June 30, 2022 was $14,344,077, an increase of $3,142,465, from $11,201,612 as of December 31, 2021. The increase of cash and cash equivalents for the six months ended June 30, 2022 was attributable to a number of factors including:
i. Net cash provided by (used in) operating activities
ii. Net cash used in investing activities
iii. Net cash provided by financing activities
Industrial and Commercial Bank of China ("ICBC") Loan $ 5,660,518
Long-term loans from credit union
As of June 30, 2022 and December 31, 2021, loans payable to Rural Credit Union of Xushui District, amounted to $9,327,413 and $9,818,530, respectively.
As of June 30, 2022 and December 31, 2021, 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
© Edgar Online, source Glimpses