IT TECH PACKAGING, INC.
For the period ended Mar 31, 2025. Filed May 9, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
ITP$0.12-2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-15.
0001213900-24-099096
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001213900-25-041500
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 144 previous paragraphs and 102 current paragraphs.
42 unchanged; 43 reworded; 17 added; 52 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Gross profit margin for regular CMP for the three months ended March 31, 2025 was 1.45%, or 4.23 percentage points lower, as compared to gross profit margin of 5.68% for the three months ended March 31, 2024. Such decrease was mainly due to the decrease in ASP of regular CMP, partially offset by the decrease in unit cost of sales in the first quarter of 2025.
Current report
Liquidity and Capital Resources
Current report
As of March 31, 2025, we had current assets of $29,499,038 (including a VAT（“Value Added Tax”） recoverable of Tengsheng Paper in amount of $13,173,067), and current liabilities of $20,933,963, resulting in a working capital of $8,565,075. However, production of Baoding Shende has been suspended in 2024 and the first quarter of 2025, rendering related VAT unrecoverable in the short term. Net working capital excluding VAT recoverable as of March 31, 2025 was a working capital deficit of $4,607,992. Baoding Shengde and Tengsheng Paper have incurred loss that there is doubt about these subsidiaries ability to continue as going concerns. The main reason of losses was due to high depreciation costs, decreased market demand, and elevated material costs. Our future sustainability is dependent on our capacity to generate cash from our operational endeavors and secure additional capital to fund our ongoing activities. Should we fail to secure necessary funding, we may be unable to realize our assets and discharge our liabilities in the normal course of business.
Current report
To address these challenges, we plan to optimize raw material structure and stabilize manufacturing capacity utilization, which will help to reduce procurement costs. Additionally, we are actively exploring new products and adjusting pricing strategies in a timely manner to secure a larger market share.
Current report
Furthermore, we will maintain rigorous control over inventory, working capital, and cash flow to mitigate financial risks. We will also strategically utilize financing quotas from the capital market to ensure the smooth and healthy operation of the company.
Current report
Our continued existence as a going concern depends on the successful implementation of our business plan. This includes increasing market acceptance of our products to boost sales volume and achieve economies of scale, while deploying more effective marketing strategies and cost control measures to better manage the operating cash flow position.
Current report
Capital Expenditure Commitment
Current report
On December 24, 2024, the Company entered into a loan agreement with the Rural Credit Union of Xushui District, with a balance of $1,811,039 and $1,808,469 as of March 31, 2025 and December 31, 2024, respectively. The loan is secured by the equipment of Baoding Shengde as collateral for the benefit of the bank. The loan bears a fixed rate of 6% and will be due by December 23, 2025.
Current report
On December 24, 2024, the Company entered into a loan agreement with the Rural Credit Union of Xushui District, with a balance of $2,228,971 and $2,225,808 as of March 31, 2025 and December 31, 2024, respectively. The loan is secured by the equipment of Baoding Shengde as collateral for the benefit of the bank and guaranteed by a third party company. The loan bears a fixed rate of 6% and will be due by December 23, 2025.
Current report
On December 28, 2024, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $306,484 at a fixed interest rate of 5.5% per annum. The loan is guaranteed by Mr. Zhenyong Liu. The loan will be due by December 27, 2025.
Current report
On December 28, 2024, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $69,655 at a fixed interest rate of 5.5% per annum. The loan is secured by certain of the Company’s manufacturing equipment and guaranteed by Mr. Zhenyong Liu. The loan will be due by December 27, 2025.
Current report
On March 10, 2025, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $208,966 at a fixed interest rate of 5.5% per annum. The loan is secured by certain of the Company’s manufacturing equipment and guaranteed by Mr. Zhenyong Liu. The loan will be due by March 9, 2026.
Current report
On June 11, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $2,786 and $2,782 as of March 31, 2025 and December 31, 2024, respectively. The loan bears a fixed interest rate of 3.45% per annum. The loan is due for repayment by June 11, 2025.
Current report
On June 21, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $139,311 and $139,113 as of March 31, 2025 and December 31, 2024, respectively. The loan bears a fixed interest rate of 3.45% per annum. The loan is due for repayment by June 21, 2025.
Current report
On June 22, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $139,311 and $139,113 as of March 31, 2025 and December 31, 2024, respectively. The loan bears a fixed interest rate of 3.45% per annum. The loan is due for repayment by June 22, 2025.
Current report
On June 24, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $136,524 and $136,331 as of as of March 31, 2025 and December 31, 2024, respectively. The loan bears a fixed interest rate of 3.45% per annum. The loan is due for repayment by June 24, 2025.
Current report
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, which emphasizes the importance of providing more granular and detailed expense information in financial statements. The update requires entities to disaggregate expenses by nature and function on the income statement, offering a clearer picture of an entity’s cost structure and operational efficiency. This enhanced disclosure is intended to improve the transparency and comparability of financial reporting. Entities must apply the new guidance retrospectively to all periods presented in the financial statements. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of assessing the impact of these changes on its financial reporting and will implement the necessary adjustments to comply with the updated standards.
Removed paragraphs (52)
Previous report
CMP.
Previous report
Offset printing paper
Previous report
Revenue from offset printing paper was $nil for the three months ended September 30, 2024, representing a decrease of $69,227, or 100.00%, from $69,227 for the three months ended September 30, 2023. Production of offset printing paper was suspended during the third quarter of 2024.
Previous report
Tissue Paper Products
Previous report
Revenue from tissue paper products was $nil for the three months ended September 30, 2024, representing a decrease of $264,099, or 100.00%, from $264,099 for the three months ended September 30, 2023. Production of tissue paper products was suspended during the third quarter of 2024.
Previous report
Revenue of Face Mask
Previous report
Revenue generated from selling face mask were $nil and $15,198 for the three months ended September 30, 2024 and 2023, respectively.
Previous report
Cost of sales for offset printing paper was $ nil for the quarter ended September 30, 2024, as compared to $64,011 for the comparable period in 2023. The production of offset printing paper was suspended in the third quarter of 2024.
Previous report
Cost of sales for tissue paper products was $ nil for the quarter ended September 30, 2024, as compared to $998,569 for the comparable period in 2023. The production of tissue paper products was suspended in the third quarter of 2024.
Previous report
Gross profit margin for regular CMP for the three months ended September 30, 2024 was 7.54%, or 0.53 percentage points higher, as compared to gross profit margin of 7.01% for the three months ended September 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 third quarter of 2024.
Previous report
Face Masks
Previous report
Gross loss for face masks for the three months ended September 30, 2024 and 2023 were $nil and $2,393.
Previous report
Comparison of the Nine months ended September 30, 2024 and 2023
Previous report
Revenue for the nine months ended September 30, 2024 was $58,195,129, representing a decrease of $7,387,222, or 11.26%, from $65,582,351 for the same period in the previous year. This was mainly due to the decrease in ASP of CMP, partially offset by the increase in sales quantity of regular CMP.
Previous report
Revenue from sales of offset printing paper, CMP and tissue paper products for the nine months ended September 30, 2024 was $58,083,990, a decrease of $7,399,292, or 11.30%, from $65,483,282 for the nine months ended September 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 nine months ended September 30, 2024 amounted to 168,919 tonnes, a decrease of 4,398 tonnes, or 2.54%, compared to 173,317 tonnes sold during the nine months ended September 30, 2023. Total quantities of CMP and offset printing paper sold decreased by 3,672 tonnes in the nine 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 nine months ended September 30, 2024. The changes in revenue and quantity sold for the nine months ended September 30, 2024 and 2023 are summarized as follows:
Previous report
Revenue of Face Masks
Previous report
Revenue generated from selling face masks were $nil and $95,080 for the nine months ended September 30, 2024 and 2023.
Previous report
Cost of Sales
Previous report
Total cost of sales for CMP, offset printing paper and tissue paper products in the nine months ended September 30, 2024 was $52,612,788, a decrease of $12,104,998, or 18.70%, from $64,717,786 for the nine months ended September 30, 2023. This was mainly due to the decrease in the unit material costs of CMP.
Previous report
Cost of sales for CMP was $52,612,788 for the nine months ended September 30, 2024, as compared to $58,592,582 in the same period of 2023. The decrease in the cost of sales of $5,979,794 for CMP was mainly due to the decrease in average cost of sales, partially offset by the increase in the quantities of regular CMP sold in the nine months of 2024. Average cost of sales per tonne for CMP decreased by 11.40%, from $351 for the nine months ended September 30, 2023, to $311 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.
Previous report
Cost of sales for offset printing paper was $nil for the nine months ended September 30, 2024, as compared to $3,143,496 in the same period of 2023.
Previous report
Cost of sales for tissue paper products was $nil for the nine months ended September 30, 2024, as compared to $2,981,708 in the same period of 2023.
Previous report
Gross profit
Previous report
Gross profit for the nine months ended September 30, 2024 was $5,581,794 (representing 9.59% of the total revenue), representing an increase of $4,832,158, or 644.60%, from the gross profit of $749,636 (representing 1.14% of the total revenue) for the nine months ended September 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.
Previous report
Gross profit for offset printing paper, CMP and tissue paper products for the nine months ended September 30, 2024 was $5,471,202, an increase of $4,705,706, or 614.73%, from the gross profit of $765,496 for the nine months ended September 30, 2023. The increase was mainly the result of the factors discussed above.
Previous report
The overall gross profit margin for offset printing paper, CMP and tissue paper products increased by 8.25 percentage points, from 1.17% for the nine months ended September 30, 2023, to 9.42% for the nine months ended September 30, 2024.
Previous report
Gross profit margin for regular CMP for the nine months ended September 30, 2024 was 9.44%, or 4.18 percentage points higher, as compared to gross profit margin of 5.26% for the nine months ended September 30, 2023. Such increase was primarily due to the decrease in material costs, partially offset by the decrease in ASP of regular CMP.
Previous report
Gross profit margin for light-weight CMP for the nine months ended September 30, 2024 was 9.33%, or 7.65 percentage points higher, as compared to gross profit margin of 1.68% for the nine months ended September 30, 2023. Such increase was primarily due to the decrease in material costs, partially offset by the decrease in ASP of light-weight CMP.
Previous report
Face Masks
Previous report
Gross loss for face mask for the nine months ended September 30, 2024 and 2023 was $nil and $8,801, respectively.
Previous report
Selling, General and Administrative Expenses
Previous report
Selling, general and administrative expenses for the nine months ended September 30, 2024 were $9,999,833, an increase of $3,846,320, or 62.51% from $6,153,513 for the nine months ended September 30, 2023. The increase was mainly due to the increase in depreciation of idle fixed assets during production suspension and accrued liability for legal proceeding the Company was jointly liable for repayment of a loan.
Previous report
Loss from Operations
Previous report
Operating loss for the nine months ended September 30, 2024 was $4,418,039, a decrease of loss of $1,357,518, or 23.50%, from $5,775,557 for the nine months ended September 30, 2023. The decrease of loss from operations was primarily due to the increase in gross profit, partially offset by the increase in selling, general and administrative expenses.
Previous report
Other Income and Expenses
Previous report
Interest expense for the nine months ended September 30, 2024 decreased by $174,397, from $767,668 for the nine months ended September 30, 2023, to $593,271. The Company had short-term and long-term interest-bearing loans and lease obligation that aggregated $9,788,224 as of September 30, 2024, as compared to $12,105,731 as of September 30, 2023.
Previous report
Gain on derivative liability
Previous report
Net Loss
Previous report
As a result of the above, net loss was $5,798,229 for the nine months ended September 30, 2024, representing a decrease of loss of $163,797, or 2.75%, from $5,962,026 for the nine months ended September 30, 2023.
Previous report
Capital Expenditure Commitment as of September 30, 2024
Showing the first 40 of 52 passages. Open the source sections for the rest.
Reworded paragraphs (43)
Previous wording
Revenue for the three months ended September 30, 2024 was $25,081,500, an increase of $9,309,940, or 59.03%, from $15,771,560 for the same period in the previous year. This was mainly due to the increase of sales volume of corrugating medium paper (“CMP”), partially offset by the decrease in average selling prices (“ASP”) of
Current wording
Revenue for the three months ended March 31, 2025 was $10,897,266, an increase of $4,033,425, or 58.76%, from $6,863,841 for the same period in the previous year. This was mainly due to the increase of sales volume of corrugating medium paper (“CMP”), partially offset by the decrease in average selling prices (“ASP”) of CMP.
Previous wording
Revenue from sales of offset printing paper, CMP and tissue paper products for the three months ended September 30, 2024 was $25,044,375, representing an increase of $9,287,976, or 58.95%, from $15,756,399 for the third quarter of 2023. Total offset printing paper, CMP and tissue paper products sold during the three months ended September 30, 2024 amounted to 74,884 tonnes, representing an increase of 30,077 tonnes, or 67.13%, compared to 44,807 tonnes sold in the comparable period in the previous year. Production of offset printing paper and tissue paper products were suspended due to the rising natural gas price in first half of 2024 and is expected to resume at the end of 2024. The changes in revenue dollar amount and in quantity sold for the three months ended September 30, 2024 and 2023 are summarized as follows:
Current wording
Revenue from sales of offset printing paper, CMP and tissue paper products for the three months ended March 31, 2025 was $10,897,266, representing an increase of $4,070,466, or 59.62%, from $6,826,800 for the first quarter of 2024. Total offset printing paper, CMP and tissue paper products sold during the three months ended March 31, 2025 amounted to 31,607 tonnes, representing an increase of 12,937 tonnes, or 69.29%, compared to 18,670 tonnes sold in the comparable period in the previous year. Production of offset printing paper and tissue paper products were suspended from 2024 through first quarter of 2025 and is expected to resume in the second half of 2025. The changes in revenue dollar amount and in quantity sold for the three months ended March 31, 2025 and 2024 are summarized as follows:
Previous wording
Revenue from CMP amounted to $25,044,375 (100.00% of the total offset printing paper, CMP and tissue paper products revenues) for the three months ended September 30, 2024, representing an increase of $9,621,302, or 62.38%, from $15,423,073 for the comparable period in 2023.
Current wording
Revenue from CMP amounted to $10,897,266 (100.00% of the total offset printing paper, CMP and tissue paper products revenues) for the three months ended March 31, 2025, representing an increase of $4,070,466, or 59.62%, from $6,826,800 for the comparable period in 2024.
Previous wording
We sold 74,884 tonnes of CMP in the three months ended September 30, 2024 as compared to 44,396 tonnes for the same period in 2023, representing a 68.67% increase in quantity sold.
Current wording
We sold 31,607 tonnes of CMP in the three months ended March 31, 2025 as compared to 18,670 tonnes for the same period in 2024, representing a 69.29% increase in quantity sold.
Previous wording
ASP for regular CMP decreased from $350/tonne for the three months ended September 30, 2023 to $337/tonne for the three months ended September 30, 2024, representing a 3.71% decrease. ASP in RMB for regular CMP for the third quarter of 2023 and 2024 was RMB2,532 and RMB2,386, respectively, representing a 5.76% decrease. The quantity of regular CMP sold increased by 27,935 tonnes, from 34,186 tonnes in the third quarter of 2023 to 62,121 tonnes in the third quarter of 2024.
Current wording
ASP for regular CMP decreased from $368/tonne for the three months ended March 31, 2024 to $347/tonne for the three months ended March 31, 2025, representing a 5.71% decrease. ASP in RMB for regular CMP for the first quarter of 2024 and 2025 was RMB2,611 and RMB2,487, respectively, representing a 4.74% decrease. The quantity of regular CMP sold increased by 11,122 tonnes, from 15,640 tonnes in the first quarter of 2024 to 26,762 tonnes in the first quarter of 2025.
Previous wording
ASP for light-weight CMP decreased from $340/tonne for the three months ended September 30, 2023 to $324/tonne for the three months ended September 30, 2024, representing a 4.71% decrease. ASP in RMB for light-weight CMP for the third quarter of 2023 and 2024 was RMB2,439 and RMB2,297, respectively, representing a 5.81% decrease. The quantity of light-weight CMP sold increased by 2,553 tonnes, from 10,210 tonnes in the third quarter of 2023, to 12,763 tonnes in the third quarter of 2024.
Current wording
ASP for light-weight CMP decreased from $355/tonne for the three months ended March 31, 2024 to $334/tonne for the three months ended March 31, 2025, representing a 5.92% decrease. ASP in RMB for light-weight CMP for the first quarter of 2024 and 2025 was RMB2,522 and RMB2,397, respectively, representing a 4.94% decrease. The quantity of light-weight CMP sold increased by 1,815 tonnes, from 3,030 tonnes in the first quarter of 2024, to 4,845 tonnes in the first quarter of 2025.
Previous wording
Our PM6 production line, which produces regular CMP, has a designated capacity of 360,000 tonnes /year. The utilization rates for the third quarter of 2024 and 2023 were 68.96% and 38.07%, respectively, representing an increase of 30.89%. Quantities sold for regular CMP that was produced by the PM6 production line from October 2022 to September 2024 are as follows:
Current wording
Our PM6 production line, which produces regular CMP, has a designated capacity of 360,000 tonnes /year. The utilization rates for the first quarter of 2025 and 2024 were 30.44% and 15.11%, respectively, representing an increase of 15.33%. Quantities sold for regular CMP that was produced by the PM6 production line from April 2023 to March 2025 are as follows:
Previous wording
Total cost of sales for CMP, offset printing paper and tissue paper products for the quarter ended September 30, 2024 was $23,163,835, an increase of $7,256,618, or 45.62%, from $15,907,217 for the comparable period in 2023. This was mainly due to the increase in sales quantity of CMP, partially offset by and the decrease of the unit material cost of CMP products.
Current wording
Total cost of sales for CMP, offset printing paper and tissue paper products for the quarter ended March 31, 2025 was $10,813,180, an increase of $4,348,716, or 67.27%, from $6,464,464 for the comparable period in 2024. This was mainly due to the increase in sales quantity of CMP, partially offset by and the decrease of the unit material cost of Regular CMP.
Previous wording
Cost of sales for CMP was $23,163,835 for the quarter ended September 30, 2024, as compared to $14,844,637 for the comparable period in 2023. The increase in the cost of sales of $8,319,198 for CMP was mainly due to the increase in sales volume of CMP, partially offset by the decrease in average unit cost of sales of CMP. Average cost of sales per tonne for CMP decreased by 7.49%, from $334 in the third quarter of 2023 to $309 in the third 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 third quarter of 2024 compared to the third quarter of 2023.
Current wording
Cost of sales for CMP was $10,813,180 for the quarter ended March 31, 2025, as compared to $6,464,464 for the comparable period in 2024. The increase in the cost of sales of $4,348,716 for CMP was mainly due to the increase in sales volume of CMP, partially offset by the decrease in average unit cost of sales of CMP. Average cost of sales per tonne for CMP decreased by 1.16%, from $346 in the first quarter of 2024 to $342 in the first quarter of 2025. The decrease in average cost of sales was mainly attributable to the improvement on utilization rate of PM6 production line, which led to the reduction in unit manufacturing costs, partially offset by the higher average unit purchase costs (net of applicable value added tax) of recycled paper board. Changes in cost of sales and cost per tonne by product for the quarters ended March 31, 2025 and 2024 are summarized below:
Previous wording
Our average unit purchase costs (net of applicable value added tax) of recycled paper board in the three months ended September 30, 2024 were RMB 1,214/tonne (approximately $171/tonne), as compared to RMB 1,239/tonne (approximately $176/tonne) for the three months ended September 30, 2023. These changes (in US dollars) represent a year-over-year decrease of 2.84% 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.
Current wording
Our average unit purchase costs (net of applicable value added tax) of recycled paper board in the three months ended March 31, 2025 were RMB 1,321/tonne (approximately $184/tonne), as compared to RMB 1,276/tonne (approximately $180/tonne) for the three months ended March 31, 2024. These changes (in US dollars) represent a year-over-year increase of 2.22% 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.
Previous wording
Electricity and gas are our two main energy sources. Electricity and gas accounted for approximately 5% and 14.3% of total sales in the third quarter of 2024, respectively, compared to 5% and 13.3% of total sales in the third quarter of 2023. The monthly energy cost as a percentage of total monthly sales of our main paper products for the 24 months ended September 30, 2024 are summarized as follows:
Current wording
Electricity and gas are our two main energy sources. Electricity and gas accounted for approximately 5% and 16.8% of total sales in the first quarter of 2025, respectively, compared to 4% and 12.4% of total sales in the third quarter of 2024. The monthly energy cost as a percentage of total monthly sales of our main paper products for the 24 months ended March 31, 2025 are summarized as follows:
Previous wording
Gross profit for the three months ended September 30, 2024 was $1,917,381 (representing 7.64% of the total revenue), representing an increase of $2,070,604, from the gross loss of $153,223 (representing 0.97% of the total revenue) for the three months ended September 30, 2023, as a result of factors described above.
Current wording
Gross profit for the three months ended March 31, 2025 was $84,086 (representing 0.77% of the total revenue), representing a decrease of $315,027, or 78.93%, from the gross profit of $399,113 (representing 5.81% of the total revenue) for the three months ended March 31, 2024, as a result of factors described above.
Previous wording
Gross profit for offset printing paper, CMP and tissue paper products for the three months ended September 30, 2024 was $1,880,540, representing an increase of $2,031,358, from the gross loss of $150,818 for the three months ended September 30, 2023. The increase was mainly the result of the factors discussed above.
Current wording
Gross profit for offset printing paper, CMP and tissue paper products for the three months ended March 31, 2025 was $84,086, representing a decrease of $278,250, or 76.79%, from the gross profit of $362,336 for the three months ended March 31, 2024. The decrease was mainly the result of the factors discussed above.
Previous wording
The overall gross profit margin for offset printing paper, CMP and tissue paper products increased by 8.47 percentage points, from -0.96% for the three months ended September 30, 2023, to 7.51% for the three months ended September 30, 2024.
Current wording
The overall gross profit margin for offset printing paper, CMP and tissue paper products decreased by 4.54 percentage points, from 5.31% for the three months ended March 31, 2024, to 0.77% for the three months ended March 31, 2025.
Previous wording
Gross profit margin for light-weight CMP for the three months ended September 30, 2024 was 7.33%, or 14.80 percentage points higher, as compared to gross profit margin of -7.47% for the three months ended September 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 third quarter of 2024.
Current wording
Gross profit margin for light-weight CMP for the three months ended March 31, 2025 was -3.12%, or 6.44 percentage points lower, as compared to gross profit margin of 3.32% for the three months ended March 31, 2024. The decrease was mainly due to the decrease of ASP of light-weight CMP in the first quarter of 2025.
Previous wording
Selling, general and administrative expenses for the three months ended September 30, 2024 were $3,381,502, an increase of $1,046,756, or 44.83% from $2,334,746 for the three months ended September 30, 2023. The increase was mainly due to the increase in depreciation of idle fixed assets during production suspension and accrued liability for legal proceeding the Company was jointly liable for repayment of a loan.
Current wording
Selling, general and administrative expenses for the three months ended March 31, 2025 were $3,461,321, a decrease of $439,462, or 11.27% from $3,900,783 for the three months ended March 31, 2024. The decrease was mainly due to the decrease in depreciation of idle fixed assets during production suspension.
Previous wording
Operating loss for the quarter ended September 30, 2024 was $1,464,121, a decrease of loss of $1,020,392 or 41.07%, from $2,484,513 for the quarter ended September 30, 2023. The increase in income from operations was primarily due to the increase in gross profit, partially offset by the increase in selling, general and administrative expenses.
Current wording
Operating loss for the quarter ended March 31, 2025 was $3,377,235, an increase of $124,435, or 3.55%, from $3,501,670 for the quarter ended March 31, 2024. The increase was primarily due to the decrease in in selling, general and administrative expenses, partially offset by the increase in gross profit.
Previous wording
Interest expense for the three months ended September 30, 2024 decreased by $76,388, from $247,818 in the three months ended September 30, 2023, to $171,430. The Company had short-term and long-term interest-bearing loans, related party loans and leasing obligations that aggregated $9,788,224 as of September 30, 2024, as compared to $12,105,731 as of September 30, 2023.
Current wording
Interest expense for the three months ended March 31, 2025 decreased by $77,443, from $210,290 in the three months ended March 31, 2024, to $132,847. The Company had short-term and long-term interest-bearing loans that aggregated $9,722,494 as of March 31, 2025, as compared to $12,204,370 as of March 31, 2024.
Previous wording
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 September 30, 2024 and 2023 was a gain of $2 and $660,429, respectively.
Current wording
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 March 31, 2025 and 2024 was a gain of $4,553 and $34, respectively.
Previous wording
As a result and the factors discussed above, net loss was $1,973,946 for the quarter ended September 30, 2024, representing a decrease of loss of $1,422, or 0.07%, from $1,975,368 for the quarter ended September 30, 2023.
Current wording
As a result and the factors discussed above, net loss was $3,503,785 for the quarter ended March 31, 2025, representing an increase of $242,751, or 6.48%, from $3,746,536 for the quarter ended March 31, 2024.
Previous wording
Net accounts receivable increased by $1,151,844, or 200.14%, to $1,727,370 as of September 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.
Current wording
Net accounts receivable increased by $1,840,053, or 639.85%, to $2,127,629 as of March 31, 2025, as compared with $287,576 as of December 31, 2024. We usually collect accounts receivable within 30 days of delivery and completion of sales.
Previous wording
Inventories consist of raw materials (accounting for 71.70% of total value of inventory as of September 30, 2024), semi-finished goods and finished goods. As of September 30, 2024, the recorded value of inventory increased by 61.24% to $5,732,539 from $3,555,235 as of December 31, 2023. As of September 30, 2024, the inventory of recycled paper board, which is the main raw material for the production of CMP, was $3,873,233, approximately $3,674,489, or 1848.86%, 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.
Current wording
Inventories consist of raw materials (accounting for 73.4% of total value of inventory as of March 31, 2025), semi-finished goods and finished goods. As of March 31, 2025, the recorded value of inventory increased by 97.4% to $4,642,056 from $2,351,876 as of December 31, 2024. As of March 31, 2025, the inventory of recycled paper board, which is the main raw material for the production of CMP, was $3,244,750, approximately $1,891,207, or 139.72%, higher than the balance as of December 31, 2024. In March 2025, we increased our procurement volume of recycled paper board in anticipation of rising purchase price and to prepare for the expanded production output as planned for the upcoming quarter.
Previous wording
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 $140,847 (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.
Current wording
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 $139,394 (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.
Previous wording
As of September 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.
Current wording
As of March 31, 2025, we had approximately $3.4 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.
Previous wording
Our cash, cash equivalents and restricted cash as of September 30, 2024 was $4,892,914, an increase of $500,993, from $4,391,921 as of December 31, 2023. The increase of cash and cash equivalents for the nine months ended September 30, 2024 was attributable to a number of factors including:
Current wording
Our cash, cash equivalents and restricted cash as of March 31, 2025 was $5,070,360, a decrease of $1,880,216, from $6,950,576 as of December 31, 2024. The decrease of cash and cash equivalents for the three months ended March 31, 2025 was attributable to a number of factors including:
Previous wording
Net cash provided by operating activities was $2,831,111 for the nine months ended September 30, 2024. The balance represented a decrease of cash of $4,663,003, or 62.22%, from net cash of $7,494,114 provided for the nine months ended September 30, 2023. Net loss for the nine months ended September 30, 2024 was $5,798,229, representing a decrease of loss from operations of $163,797, or 2.75%, from $5,962,026 for the nine months ended September 30, 2023. Changes in various asset and liability account balances throughout the nine months ended September 30, 2024 also contributed to the net change in cash from operating activities in the nine months ended September 30, 2024. Chief among such changes is the increase of accounts receivable in the amount of $1,160,996 during the nine months of 2024. There was also an increase of $2,108,280 in the ending inventory balance as of September 30, 2024 (a decrease to net cash for the nine months ended September 30, 2024 cash flow purposes). In addition, the Company had non-cash expenses relating to depreciation and amortization in the amount of $10,346,181. The Company also had a net increase of $122,747 in prepayment and other current assets (a decrease to net cash) and a net increase of $1,406,850 in other payables and accrued liabilities and related parties (an increase to net cash), as well as an increase in income tax payable of $345,270 (an increase to net cash) during the nine months ended September 30, 2024.
Current wording
Net cash used in operating activities was $2,474,978 for the three months ended March 31, 2025. The balance represented a decrease of cash of $3,099,398, or 496.36%, from $624,420 provided for the three months ended March 31, 2024. Net loss for the three months ended March 31, 2025 was $3,503,785, representing an increase of $242,751, or 6.48%, from a net loss of $3,746,536 for the three months ended March 31, 2024. Changes in various asset and liability account balances throughout the three months ended March 31, 2025 also contributed to the net change in cash from operating activities in three months ended March 31, 2025. Chief among such changes is the increase of accounts receivable in the amount of $1,878,313 during the three months of 2025. There was also an increase of $2,256,756 in the ending inventory balance as of March 31, 2025 (a decrease to net cash for the three months ended March 31, 2025 cash flow purposes). In addition, the Company had non-cash expenses relating to depreciation and amortization in the amount of $3,547,398. The Company also had a net decrease of $1,262,163 in prepayment and other current assets (an increase to net cash) and a net increase of $433,825 in other payables and accrued liabilities and related parties (an increase to net cash), as well as a decrease in income tax payable of $81,069 (a decrease to net cash) during the three months ended March 31, 2025.
Previous wording
We incurred $315,152 in net cash expenditures for purchases of property, plant and equipment during the nine months ended September 30, 2024, as compared to $9,211,711 for the same period of 2023.
Current wording
We incurred $8,364 in net cash expenditures for purchases of property, plant and equipment during the three months ended March 31, 2025, as compared to $9,027 for the same period of 2024.
Previous wording
Net cash used in financing activities was $2,112,706 for the nine months ended September 30, 2024, as compared to net cash provided by financing activities in the amount of $1,997,269 for the nine months ended September 30, 2023. The net cash outflow for the nine months ended September 30, 2024 was mainly for repayment of bank loans.
Current wording
Net cash used in financing activities was $585,456 for the three months ended March 31, 2025, as compared to net cash provided by financing activities in the amount of $422,488 for the three months ended March 31, 2024. The net cash outflow for the three months ended March 31, 2025 was from the proceeds of bank loans.
Previous wording
As of September 30, 2024, there were guaranteed short-term borrowings of $142,707 and unsecured bank loans of $713,531. As of December 31, 2023, there were guaranteed short-term borrowings of $nil and unsecured bank loans of $423,567.
Current wording
As of March 31, 2025, there were guaranteed short-term borrowings of $2,814,076 and unsecured bank loans of $417,932. As of December 31, 2024, there were guaranteed short-term borrowings of $2,225,808 and unsecured bank loans of $417,339.
Previous wording
The average short-term borrowing rates for the three months ended September 30, 2024 and 2023 were approximately 4.47% and 4.52%. The average short-term borrowing rates for the nine months ended September 30, 2024 and 2023 were approximately 4.47% and 4.66%.
Current wording
The average short-term borrowing rates for the three months ended March 31, 2025 and 2024 were approximately 5.74% and 4.48%.
Previous wording
As of September 30, 2024 and December 31, 2023, long-term loans were $8,931,986 and $11,378,429, respectively.
Current wording
As of March 31, 2025 and December 31, 2024, long-term loans were $4,679,447 and $4,672,806, respectively.
Previous wording
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 September 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 September 30, 2024 and December 31, 2023, the total outstanding loan balance was $3,566,229 and $3,528,315. Out of the total outstanding loan balance, current portion amounted was $1,996,460 and $1,269,290, which is presented as current liabilities in the consolidated balance sheet and the remaining balance of $1,569,769 and $2,259,025 is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2024 and December 31, 2023, respectively.
Current wording
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 March 31, 2025 and December 31, 2024. 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 March 31, 2025 and December 31, 2024, the total outstanding loan balance was $3,481,375 and $3,476,434. Out of the total outstanding loan balance, current portion amounted was $2,645,510 and $2,641,756, which is presented as current liabilities in the consolidated balance sheet and the remaining balance of $835,865 and $834,678 is presented as non-current liabilities in the consolidated balance sheet as of March 31, 2025 and December 31, 2024, respectively.
Previous wording
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 September 30, 2024 and December 31, 2023, total outstanding loan balance was $1,227,274 and $1,214,226, respectively. Out of the total outstanding loan balance, current portion amounted $513,743 and $225,903, which is presented as current liabilities and the remaining balance of $713,531 and $988,323 is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2024 and December 31, 2023, respectively.
Current wording
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 is guaranteed by an independent third party. Interest payment is due monthly and bears a rate of 7% per annum. As of March 31, 2025 and December 31, 2024, total outstanding loan balance was $1,198,072 and $1,196,372, respectively. Out of the total outstanding loan balance, current portion amounted $919,451 and $918,146, which is presented as current liabilities and the remaining balance of $278,621 and $278,226 is presented as non-current liabilities in the consolidated balance sheet as of March 31, 2025 and December 31, 2024, respectively.
Previous wording
Total interest expenses for the short-term bank loans and long-term loans for the three months ended September 30, 2024 and 2023 were $171,430 and $247,628, respectively. Total interest expenses for the short-term bank loans and long-term loans for the nine months ended September 30, 2024 and 2023 were $593,271 and $760,807, respectively.
Current wording
Total interest expenses for the short-term bank loans and long-term loans for the three months ended March 31, 2025 and 2024 were $132,847 and $209,586, respectively.
Previous wording
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 $365,804 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 September 30, 2024 and December 31, 2023, respectively.
Current wording
Mr. Zhenyong Liu 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 $357,100 and $356,594 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 March 31, 2025 and December 31, 2024, respectively.
Previous wording
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 September 30, 2024 and December 31, 2023, approximately $42,812 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.
Current wording
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 March 31, 2025 and December 31, 2024, approximately $41,793 and $41,734 of interest 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.
Previous wording
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 September 30, 2024 and December 31, 2023, the outstanding interest was $196,132 and $194,047, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.
Current wording
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 March 31, 2025 and December 31, 2024, the outstanding interest was $191,465 and $191,193, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.
Previous wording
As of September 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 nine months ended September 30, 2024 and 2023. The accrued interest owing to Mr. Zhenyong Liu was approximately $604,748 and $598,319, as of September 30, 2024 and December 31, 2023, respectively, which was recorded in other payables and accrued liabilities.
Current wording
As of March 31, 2025 and December 31, 2024, 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 months ended March 31, 2025 and 2024. The net interest owed to Mr. Zhenyong Liu was approximately $305,033 and $304,600, as of March 31, 2025 and December 31, 2024, respectively, which was recorded in other payables and accrued liabilities.
Previous wording
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 nine months ended September 30, 2024 and 2023 were $nil and $263,342.
Current wording
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 three months ended March 31, 2025 and 2024 were $nil.
Previous wording
As of September 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.
Current wording
As of March 31, 2025 and December 31, 2024, amount due to shareholder was $10,000 and $nil, respectively, which represents funds from shareholders to pay for various expenses incurred in the U.S. The amount is due on demand with interest free.
Showing the first 40 of 43 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
Changes in cost of sales and cost per tonne by product for the quarters ended September 30, 2024 and 2023 are summarized below:
Previous report — wording carried elsewhere
Revenue of Offset Printing Paper, Corrugating Medium Paper and Tissue Paper Products
Previous report — wording carried elsewhere
ASPs for our main products in the nine-month period ended September 30, 2024 and 2023 are summarized as follows:
Previous report — wording carried elsewhere
Changes in cost of sales and cost per tonne by product for the nine months ended September 30, 2024 and 2023 are summarized below:
Previous report — wording carried elsewhere
Offset Printing Paper, CMP and Tissue Paper Products
Previous report — wording carried elsewhere
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 nine months ended September 30, 2022 and 2023 was a gain of $51 and $646,020, respectively.
Previous report — wording carried elsewhere
On December 31, 2023, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $142,706 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 $251,593 as of September 30, 2024. The loan will be due by December 30, 2024.