Tantech Reports Full Year 2021 Financial Results

About this update from Tantech Holdings Ltd.

Highlights (Full Year 2021 Compared to Full Year 2020) 30.7% Increase in Revenue to $55.3 Million 133.0% Increase in Gross Profit to $10.4 Million 8.3 Percentage Point Expansion in Gross Margin $105.8 Million Current Asset Balance with $21.8 Million in Current Liabilities at December 31, 2021 , with a $7.2 Million Market Capitalization at July 12, 2022 LISHUI, China , July 18, 2022 /PRNewswire/ -- Tantech Holdings Ltd (NASDAQ: TANH) (" Tantech " or the "Company"), a clean energy company, today reported its audited financial results for the twelve months ended December 31, 2021 . Mr. Wangfeng Yan, Chief Executive Officer of Tantech , said, "We achieved a record 30.7% increase in revenue to $55.3 million for the full year 2021 compared to the full year 2020. On top of that we drove a 133.0% increase in gross profit to 10.4 million, with an 8.3 percentage point expansion in gross margin. Our results are even more impressive given our team's ability to execute and remain focused in the face of the COVID-19 pandemic and closures in China , and global supply chain challenges. This impacted our profitability in 2021 and continues to in 2022 but we are working diligently with our supply chain partners to mitigate costs, secure inventory and best support demand from our customers." Mr. Wangfeng Yan, Chief Executive Officer of Tantech , continued, "Overall, we are pleased with our continued execution on multiple fronts as we drove growth in our core business, made major progress in the transformation of our EV and specialty vehicles business, and strengthened our balance sheet. We are excited about opportunities in the specialty EV market based on customer feedback and forecasts for specialty EVs, including electric driverless street sweepers, supported by the global zero-emission vehicle trend, as well as favorable government policies and support in terms of subsidies, grants and tax rebates. Domestically, China has become the largest new energy vehicle market in the world led by the government's endorsement and its focus on petroleum resource independence, environmental protection and the 'Made in China 2025' industrial upgrade. We are already collaborating with technology companies and consultants on developing specialty EVs, and plan to invest heavily in this area in 2022." "Finally," concluded Mr. Wangfeng Yan, Chief Executive Officer of Tantech , "the fact that we ended 2021 with a $105.8 million current asset balance with just $21.8 million in current liabilities – and our recent market capitalization was just $7.2 million – underscores the significant opportunity we believe exists to fund our growth initiatives and build value for shareholders. We are confident that we can achieve our goal by continuing to successfully execute and delivering positive proof points on our EV and speciality vehicle business transformation, while showing a further expansion in revenue and profit growth." Financial Results For the Twelve Months Ended December 31 , ($ millions, except per share data and percentages) 2021 2020 Change Revenues $ 55.3 $ 42.3 30.7 % Gross profit $ 10.4 $ 4.5 133.0 % Gross margin 18.9 % 10.6 % 8.3 percentage points Operating expenses $ 18.9 $ 14.8 27.8 % Net (loss) income attributable to common stockholders of Tantech Holdings Ltd $ (8.4) $ (6.5) 28.2 % Basic/Diluted (loss) earnings per share $ (2.01) $ (2.21) $ (9.0) % Total revenue increased by approximately $13.0 million , or 30.7%, to approximately $55.3 million in fiscal 2021 from approximately $42.3 million in fiscal 2020. The increase was mainly attributable to the significant increase of our revenues from consumer products due to higher sales volume from existing and new customers. Revenue from Company's EV segment increased 382.4% to approximately $1.9 million in fiscal 2021, as compared to approximately $0.4 million in fiscal 2020, with increased sales of smart electronic sanitation vehicles, income from the sale of electric specialty vehicles and power batteries and commission income for electric specialty vehicles sold on behalf of other manufacturers. Our gross profit increased by approximately $6.0 million , or 133.0% to approximately $10.4 million in fiscal 2021 from approximately $4.5 million in fiscal 2020. The gross profit margin was 18.9% in fiscal 2021, as compared to 10.6% in fiscal 2020. On a segment basis, gross margins for consumer product and EV segments were 18.7% and 24.2%, respectively, for fiscal 2021, compared to 10.7% and (3.0)%, respectively, for fiscal 2020. The increase in overall gross margin was primarily attributable to the higher selling price and lower unit cost related to consumer product segment and EV segment. Research and development expenses increased by $7.2 million , or 804.8%, to $8.1 million in fiscal 2021 from $0.9 million in fiscal 2020. The increase was primarily due to the R&D activities in connection with our EV segment. During fiscal 2021, we increased our investment significantly for smart electric sanitation vehicles designed to be used in closed industrial parks and residential communities. We have successfully manufactured sanitation vehicles and generated revenue approximately $1.9 million from EV sales in fiscal year 2021. Total operating expenses increased by $4.1 million , or 27.8%, to $18.9 million in fiscal 2021 from $14.8 million in fiscal 2020, which was mainly due to increases of approximately $7.9 million in general and administrative expense and $7.2 million in research and development expenses, offset by a decrease of approximately $12.0 million in impairment of intangible assets for fiscal 2021, as compared to of the fiscal 2020. Loss before income tax was approximately $8.3 million in fiscal 2021, a decrease of approximately $2.4 million compared to a loss of approximately $10.6 million in fiscal 2020. The decrease was primarily attributable to an increase of approximately $6.0 million in gross profit compared to fiscal 2020. As of December 31, 2021 , the Company had cash and restricted cash on hand of approximately $43.6 million . Current assets were approximately $105.8 million and current liabilities were approximately $21.8 million , which resulted in a current ratio of 4.9:1. Total stockholders' equity as of December 31, 2021 was approximately $112.5 million . 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. The Company's subsidiary, First International Commercial Factoring (Shenzhen) Co., LTD , is engaged in commercial factoring for businesses in and related to its supply chain. In May 2022 , the Company established a wholly-owned subsidiary, EPakia Inc. Based in the Mid-Atlantic region of the United States , EPakia plans to develop biodegradable packaging business in the United States and other international markets. 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, except as expressly required by applicable law. Tantech Holdings Ltd and Subsidiaries Consolidated Balance Sheets (audited) For the Twelve Months Ended December 31 , 2021 2020 Assets Current Assets Cash and cash equivalents $ 43,144,049 $ 37,119,195 Restricted cash 422,832 220,109 Accounts receivable, net 44,962,926 34,410,597 Inventories, net 1,069,698 671,251 Due from related party 10,354,051 - Advances to suppliers, net 3,420,628 6,854,461 Advances to suppliers – related party — 1,533,000 Prepaid taxes 1,609,466 1,046,667 Prepaid expenses and other receivables, net 824,239 45,467 Total Current Assets 105,807,889 81,900,747 Property, plant and equipment, net 2,103,947 2,477,912 Other Assets Manufacturing rebate receivable — 5,755,237 Intangible assets, net 205,971 664,033 Right of use assets 313,172 — Long-term Investment 26,096,079 25,497,316 Total Other Assets 26,615,222 31,916,586 Total Assets (Note 3 at VIE) $ 134,527,058 $ 116,295,245 Liabilities and Stockholders' Equity Current Liabilities Short-term bank loans $ 4,719,552 $ 5,564,790 Bank acceptance notes payable — 1,753,109 Accounts payable 1,563,787 1,543,994 Due to related parties 1,847,421 2,019,087 Customer deposits 3,580,622 3,183,088 Taxes payable 823,701 571,354 Loan payable to third parties 7,002,385 306,600 Lease liabilities-current 115,330 — Accrued liabilities and other payables 2,114,258 1,861,835 Total Current Liabilities 21,767,056 16,803,857 Lease liabilities non-current 223,291 — Total Liabilities 21,990,347 16,803,857 Stockholders' Equity Common stock, $0.01 par value, 60,000,000 shares authorized, 6,399,460 and 3,589,409 shares issued and outstanding as of December 31, 2021 and 2020, respectively* 63,995 35,894 Additional paid-in capital 69,566,786 48,392,181 Statutory reserves 6,874,614 6,437,506 Retained earnings 36,684,794 45,480,031 Accumulated other comprehensive income (loss) 1,071,149 (1,493,070) Total Stockholders' Equity attributable to the Company 114,261,338 98,852,542 Noncontrolling interest (1,724,627) 638,846 Total Stockholders' Equity 112,536,711 99,491,388 Total Liabilities and Stockholders' Equity $ 134,527,058 $ 116,295,245 *Retroactively restated for one-for-ten reverse split with effective date of February 25, 2022 . * please see "Note 3: Variable Interest Entities" in the notes accompanying the audited financial statements filed on the Company's Report of Foreign Private Issuer on Form 20-F dated July 18, 2022 . Tantech Holdings Ltd and Subsidiaries Consolidated Statements of Comprehensive Loss (audited) For the Twelve Months Ended December 31 , 2021 2020 Revenues $ 55,263,673 $ 42,283,670 Cost of revenues 44,832,347 37,807,297 Gross Profit 10,431,326 4,476,373 Operating expenses Selling expenses 221,364 977,201 General and administrative expenses 8,831,407 955,210 Share based compensation 1,840,000 — Impairment of goodwill and intangible asset — 11,998,606 Research and development expenses 8,053,400 890,316 Total operating expenses 18,946,171 14,821,333 Loss from operations (8,514,845) (10,344,960) Other income (expenses) Interest income 117,735 50,732 Interest expense (740,400) (300,125) Rental income from related party 117,958 — Gain from sale property to a related party 545,874 — Other income (loss), net 210,176 (39,530) Total other income (expenses) 251,343 (288,923) Loss before income tax expense (8,263,502) (10,633,883) Income tax expense (credit) 2,429,480 (611,655) Net loss (10,692,982) (10,022,228) Less: net loss attributable to noncontrolling interest (2,334,853) (3,501,808) Net loss attributable to common stockholders of Tantech Holdings Ltd $ (8,358,129) $ (6,520,420) Net loss (10,692,982) (10,022,228) Other comprehensive income (loss): Foreign currency translation adjustment 2,535,599 5,892,311 Comprehensive loss (8,157,383) (4,129,917) Less: Comprehensive loss attributable to noncontrolling interest (2,363,473) (3,707,370) Comprehensive loss attributable to common stockholders of Tantech Holdings Ltd $ (5,793,910) $ (422,547) Loss per share - Basic and Diluted* $ (2.01) $ (2.21) Weighted Average Shares Outstanding - Basic and Diluted Continuing operations and discontinued operations* 4,148,737 2,956,624 *Retroactively restated for one-for-ten reverse split with effective date of February 25, 2022 . Tantech Holdings Ltd and Subsidiaries Consolidated Statements of Cash Flows (audited) For the Twelve Months Ended, December 31 , 2021 2020 Cash flows from operating activities Net loss $ (10,692,982) $ (10,022,228) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Allowance (Reversal of) for doubtful accounts - accounts receivable (52,789) (845,416) Reversal of allowance for doubtful accounts - advance to suppliers (142,799) (378,233) Write off manufacturing rebate receivable 5,819,059 — Reversal of allowance for doubtful accounts – other receivables — (84,573) Share based compensation 1,840,000 — Inventory reserve 359,501 92,064 Impairment of goodwill and intangible asset — 11,998,606 Decrease in deferred tax liability — (1,799,791) Depreciation expense 444,462 436,427 Amortization of intangible asset 472,140 441,489 Amortization of right of use assets 44,964 — (Gain) Loss from disposal of property, plant and equipment (545,844) 68,614 Issuance of common stock for service — 33,812 Contingent liability 535,389 — Changes in operating assets and liabilities: Accounts receivable - non-related party (9,573,463) 8,024,036 Advances to suppliers 3,694,066 7,093,022 Advances to suppliers - related party 1,550,000 (1,448,000) Inventory (737,552) (125,492) Prepaid expenses and other receivables (768,288) 133,768 Manufacturing rebate receivable 2,374,720 Accounts payable (16,266) (206,261) Accrued liabilities and other payables (323,441) 313,552 Customer deposits 318,875 (3,792,409) Collection of receivables from discontinued operations — — Lease liabilities (19,824) — Taxes payable (295,666) 1,863,853 Net cash (used in) provided by operating activities (8,090,458) 14,171,560 Cash flows from investing activities Acquisition of property, plant and equipment (220,308) (144,806) Proceeds from disposal of property, plant and equipment 748,612 21,842 Additions to intangible assets (4,220) — Net cash provided by (used in) investing activities 524,084 (122,964) Cash flows from financing activities Proceeds from loans from third parties 6,917,589 — Repayment of loans from third parties (310,000) — Bank acceptance notes payable, net of repayment (1,772,550) 1,448,667 Proceeds from bank loans 7,774,800 9,568,384 Repayment of bank loans (8,738,900) (11,230,688) Proceeds from (repayment of) loans from related parties, net (10,428,196) 98,474 Proceeds from issuance of common stock and warrants 19,362,706 9,055,232 Net cash provided by) financing activities 12,805,449 8,940,069 Effect of exchange rate changes on cash, restricted cash and cash equivalents 988,502 1,704,662 Net increase in cash, restricted cash and cash equivalents 6,227,577 24,693,327 Cash, restricted cash and cash equivalents, beginning of year 37,339,304 12,645,977 Cash, restricted cash and cash equivalents, end of year $ 43,566,881 $ 37,339,304 Supplemental disclosure information: Income taxes paid $ 2,278,134 $ 436,566 Interest paid $ 265,248 $ 308,690 Supplemental non-cash activities: Common shares issued for service $ 1,840,000 $ 33,812 View original content: https://www.prnewswire.com/news-releases/tantech-reports-full-year-2021-financial-results-301588047.html SOURCE Tantech Holdings Ltd.

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