Tantech Reports Financial Results for the First Six Months of 2021

About this update from Tantech Holdings Ltd.

LISHUI, China , Oct. 22, 2021 /PRNewswire/ -- Tantech Holdings Ltd (NASDAQ: TANH) (" Tantech " or the "Company"), a clean energy company in China , today reported its unaudited financial results for the six months ended June 30, 2021 . Mr. Wangfeng Yan, Chief Executive Officer of Tantech , said, "While we continue to have a competitive edge in selling our bamboo-based charcoal products, we have been working hard on the strategic shift in our business from being solely engaged in consumer product sales to expanding into the specialty vehicle market. We have focused on product costs as we have increased operating cash flow for our longer-term growth in the vehicle market. Ongoing COVID-19 challenges, including supply chain and logistics bottlenecks, have added cost and margin pressure in our ongoing consumer business, but we hope to see some stabilization into next year." "As to our specialty vehicle and electric vehicle (EV) business, we believe our feature-rich, environmentally friendly customizable midibuses present an attractive option for corporate customer as businesses return to normal operations. We have invested heavily in technology advancements for specialty-use EVs rather than the more competitive, domestic general consumer EV market for this reason. We are fully committed to the EV segment, which we expect will be a key long-term growth driver for us. Despite some recent delays in government rebates related to EVs, longer term we expect our specialty EV business will expand with customer demand for a cleaner environment and for zero-emission vehicles. Importantly, we had approximately $40.7 million cash at June 30, 2021 , which gives us the ability to fund our growth initiatives and build value for shareholders." Financial Results For the Six Months Ended June 30 , ($ millions, except per share data and percentages) 2021 2020 Change Revenues $ 20.6 $ 22.9 (9.9) % Gross profit $ 4.0 $ 3.1 29.3 % Gross margin 19.3 % 13.4 % 5.9 percentage points Operating expenses $ 9.7 $ 1.3 666.0 % Net (loss) income attributable to common stockholders of Tantech Holdings Ltd $ (6.6) $ 1.2 (636.8) % Basic/Diluted (loss) earnings per share $ (0.18) $ 0.04 $ (0.22)  Total revenue decreased by approximately $2.3 million , or 9.9%, to approximately $20.6 million in the six months ended June 30, 2021 from approximately $22.9 million in the same period of 2020. The decrease was mainly attributable to the decrease of the sales volume of the Company's consumer products.  Our gross profit increased by approximately $0.9 million , or 29.3% to approximately $4.0 million in the six months ended June 30, 2021 from approximately $3.1 million in the same period of 2020. The gross profit margin was 19.3% in the six months ended June 30, 2021 , as compared to 13.4% in the same period of 2020. On a segment basis, gross margins for consumer product and EV segments were 19.1% and 38.5%, respectively, for the six months ended June 30, 2021 , compared to 13.6% and 5.3%, respectively, for the six months ended June 30, 2020 . The increase in overall gross margin was primarily attributable to the higher average selling price of our charcoal-based products, offset by the decease of selling volume as compared to the same period last year.  Research and development expenses increased by $6.0 million , or 1,996.4%, to $6.4 million in the six months ended June 30, 2021 from $0.3 million in the same period of 2020. The increase was primarily due to the R&D activities in connection with our EV segment. During the six months ended June 30, 2021 , we increased our investment significantly for the smart electric sanitation vehicles designed for closed industrial parks and residential communities. We have manufactured two prototype model vehicles and expect to receive orders from potential customers in the near future.  Total operating expenses increased by $8.4 million , or 666.0%, to $9.7 million in the six months ended June 30, 2021 from $1.3 million in the same period of 2020, which was mainly due to increased research and development expenses of $6.0 million and increased share based compensation of $1.8 million for the six months ended June 30, 2021 as compared to the same period of 2020.  Our loss before income tax was approximately $5.7 million for the six months ended June 30, 2021 , compared to an income before income tax of approximately $1.7 million for the six months ended June 30, 2020 .  The Company had approximately $40.7 million cash on hand, and maintained positive working capital as of June 30, 2021 . About Tantech Holdings Ltd For the past decade, Tantech has been a highly specialized high-tech enterprise producing, researching and developing bamboo charcoal-based products with an established domestic and international sales and distribution network. Since 2017, when the Company acquired 70% of Shangchi Automobile, a vehicle manufacturer based in Zhangjiagang City, Jiangsu Province , it has manufactured and sold vehicles. The Company established two new subsidiaries, Lishui Smart New Energy Automobile Co., Ltd. and Zhejiang Shangchi New Energy Automobile Co., Ltd. , in November 2020 , to produce and sell street sweepers and other electric vehicles. The Company is fully ISO 90000 and ISO 14000 certified and has received a number of national, provincial and local honors, awards and certifications for its products and scientific research efforts. For more information please visit: http://ir.tantech.cn . Forward-Looking Statements This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the sales, plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the Company with the Securities and Exchange Commission . All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof. Tantech Holdings Ltd and Subsidiaries Consolidated Balance Sheets (Unaudited) June 30 , 2021 December 31 , 2020 Assets Current Assets Cash and cash equivalents* $ 40,711,801 $ 37,119,195 Restricted cash* - 220,109 Accounts receivable, net* 36,369,508 34,410,597 Inventories, net* 420,194 671,251 Advances to suppliers, net * 7,054,987 6,854,461 Advances to suppliers – related party - 1,533,000 Prepaid taxes* 1,177,989 1,046,667 Prepaid expenses and other receivables, net* 463,974 45,467 Total Current Assets* 86,198,453 81,900,747 Property, plant and equipment, net* 2,273,629 2,477,912 Other Assets Manufacturing rebate receivable* 5,815,305 5,755,237 Intangible assets, net* 434,913 664,033 Long-term Investment 25,763,433 25,497,316 Total Other Assets* 32,013,651 31,916,586 Total Assets* $ 120,485,733 $ 116,295,245 Liabilities and Stockholders' Equity Current Liabilities Short-term bank loans $ 5,313,070 $ 5,564,790 Bank acceptance notes payable* - 1,753,109 Accounts payable* 2,305,363 1,543,994 Due to related parties* 2,194,460 2,019,087 Customer deposits* 6,167,807 3,183,088 Taxes payable* 1,050,811 571,354 Due to third parties - 306,600 Accrued liabilities and other payables* 960,446 1,861,835 Total Current Liabilities* 17,991,957 16,803,857 Total Liabilities* 17,991,957 16,803,857 Stockholders' Equity Common stock, $0.001 par value, 50,000,000 shares authorized, 42,874,097 and 35,894,097 shares issued and outstanding as of June 30, 2021 and December 31, 2020 , respectively 42,874 35,894 Additional paid-in capital 57,164,201 48,392,181 Statutory reserves 6,437,506 6,437,506 Retained earnings 38,909,553 45,480,031 Accumulated other comprehensive loss (517,118) (1,493,070) Total Stockholders' Equity attributable to the Company 102,037,016 98,852,542 Noncontrolling interest 456,760 638,846 Total Stockholders' Equity 102,493,776 99,491,388 Total Liabilities and Stockholders' Equity $ 120,485,733 $ 116,295,245 * please see "Note 3: Variable Interest Entities" in the notes accompanying the unaudited financial statements filed on the Company's Report of Foreign Private Issuer on Form 6-K dated October 22, 2021 . Tantech Holdings Ltd and Subsidiaries Consolidated Statements of Comprehensive Loss (Unaudited) For the Six Months Ended June 30 , 2021 2020 Revenues $ 20,633,188 $ 22,889,784 Cost of revenues 16,660,387 19,817,263 Gross Profit 3,972,801 3,072,521 Operating expenses Selling expenses 122,045 201,217 General and administrative expenses 1,399,295 763,945 Share-based compensation 1,840,000 - Research and development expenses 6,351,853 302,553 Total operating expenses 9,713,193 1,267,715 (Loss) income from operations (5,740,392) 1,804,806 Other income (expenses) Interest income 57,374 17,962 Interest expense (137,594) (184,288) Government subsidy income 47,033 10,926 Rental income from a related party 67,166 - Other income, net 1,796 6,593 Total other income (expenses) 35,775 (148,807) (Loss) income before provision for income taxes (5,704,617) 1,655,999 Provision for income taxes 1,047,595 684,804 Net (loss) income (6,752,212) 971,195 Less: net loss attributable to noncontrolling interest (181,734) (253,220) Net (loss) income attributable to common stockholders of Tantech Holdings Ltd. $ (6,570,478) $ 1,224,415 Net (loss) income (6,752,212) 971,195 Other comprehensive income (loss): Foreign currency translation adjustment 975,600 (1,394,434) Comprehensive loss (5,776,612) (423,239) Less: Comprehensive loss attributable to noncontrolling interest (182,086) (251,974) Comprehensive loss attributable to common stockholders of Tantech Holdings Ltd. $ (5,594,526) $ (171,265) (Loss) earnings per share - Basic and Diluted $ (0.18) $ 0.04 Weighted Average Shares Outstanding - Basic and Diluted 37,253,764 28,872,602 Tantech Holdings Ltd and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30 , 2021 2020 Cash flows from operating activities Net (loss) income $ (6,752,212) $ 971,195 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation expense 234,756 227,049 Amortization of intangible asset 235,593 216,781 Allowance for doubtful accounts - accounts receivable 14,395 - Loss from disposal of property, plant and equipment - 2,867 Issuance of common stock for services 1,840,000 33,812 Inventory markdown 296,702 - Changes in operating assets and liabilities: Accounts receivable (1,611,062) (4,653,105) Advances to suppliers (128,735) 9,607,140 Advances to suppliers - related party 1,546,000 (1,422,000) Inventory (39,140) (1,317,697) Prepaid expenses and other receivables (417,223) 8,280 Accounts payable 743,811 1,032,112 Accrued liabilities and other payables (917,137) 232,756 Customer deposits 2,945,780 (2,908,226) Taxes payable, net of prepaid taxes 352,443 409,442 Net cash (used in) provided by operating activities (1,656,029) 2,440,406 Cash flows from investing activities Acquisition of property, plant and equipment (5,086) (9,524) Proceeds from disposal of property, plant and equipment - 21,450 Net cash (used in) provided by investing activities (5,086) 11,926 Cash flows from financing activities Proceeds from equity financing 6,939,000 - Repayment of loans from third party (309,200) - Bank acceptance notes payable, net of repayment (1,767,975) 1,221,327 Proceeds from bank loans 2,473,600 6,652,116 Repayment of bank loans (2,782,800) (6,794,316) Proceeds from (repayment of) loans from related parties, net 161,589 (557,765) Net cash provided by financing activities 4,714,214 521,362 Effect of exchange rate changes on cash, restricted cash and cash equivalents 319,398 (198,016) Net increase in cash, restricted cash and cash equivalents 3,372,497 2,775,678 Cash, restricted cash and cash equivalents, beginning of period 37,339,304 12,645,977 Cash, restricted cash and cash equivalents, end of period $ 40,711,801 $ 15,421,655 Supplemental disclosure information: Income taxes paid $ 709,980 $ 28,487 Interest paid $ 137,594 $ 168,560 View original content: https://www.prnewswire.com/news-releases/tantech-reports-financial-results-for-the-first-six-months-of-2021-301406749.html SOURCE Tantech Holdings Ltd.

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