PR Newswire | Apr 27, 2021 04:00PM EDT

04/27 15:00 CDT

Tantech Announces Full Year 2020 Financial Results LISHUI, China, April 27, 2021

LISHUI, China, April 27, 2021 /PRNewswire/ -- Tantech Holdings Ltd (NASDAQ: TANH) ("Tantech" or the "Company"), a clean energy company in China, today announced its audited financial results for the year ended December 31, 2020.

Full Year 2020 Financial Results

For the Twelve Months Ended December 31,

($ millions, expect pershare data and 2020 2019 Changepercentages)

Revenues $ 42.3 $ 49.2 (14.1) %

Consumer product $ 29.4 $ 45.8 (35.8) %

Trading $ 12.5 $ 3.4 269.3 %

Gross profit $ 4.5 $ 6.0 (25.0) %

Gross margin 10.6 % 12.1 % (1.5) percentage points

Net income (loss)attributable to common $ (6.5) $ (6.3) $ (0.2)stockholders of TantechHoldings Ltd

Basic/ Diluted earnings $ (0.22) $ (0.22) $ 0.0(loss) per share

Total revenues decreased 14.1% to $42.3 million from $49.2 million. The decrease was mainly attributable to the significant decrease of the Company's revenues from consumer products due to COVID-19. However, the ? Company' revenue from trading segment increased due to higher demands for its bamboo charcoal used for active charcoal masks, air purification and sanitation products in order to combat COVID-19. The Company also had higher revenue from EV segment as compared to 2019.

During the year 2020, due to the impact of COVID-19, our subsidiary Shangchi Automobile Co., Ltd. ("Shangchi Automobile") was unable to maintain normal operations and all sales and marketing events were disrupted due to travel restrictions and other government regulations. While the spread of COVID-19 has gradually been under control in China, it could adversely affect the Company's business for the future. Shangchi Automobile has no immediate ? business plan to start manufacturing the electric vehicles. Management determined that the electric vehicle manufacturing license should be impaired. The Company recorded an impairment of $12.0 million for the year ended December 31, 2020. For the year ended December 31, 2019, the Company recorded an impairment of $1.1 million because the carrying amount was not recoverable and it exceeded its fair value based on the management's assessment for the electric vehicle manufacturing license.

Gross profit decreased 25% to $4.5 million in 2020 from $6.0 million in 2019, and gross margin decreased to 10.6% from 12.1%, primarily due to lower revenues, and higher raw materials and supply chain costs, in the full year ? 2020 compared to the full year 2019. As a joint effort to fight COVID-19, the Company charged lower gross margin for certain orders. As a result, the gross margin of trading segment decreased to 5.4% in fiscal 2020 from 32.8% in fiscal 2019.

Selling expenses increased 205.3% to $1.0 million in 2020 from $0.3 million ? in 2019, as the Company complied with new, higher-cost sales activities, while continuing to invest in online marketing support and expanding its electric vehicle (the "EV") sales efforts during 2020.

General and administration expenses decreased 79.5% to $1.0 million in 2020 ? from $4.7 million in 2019. The decrease was primarily attributable to the recovery of bad debt provision of $1.3 million in 2020 as compared to 2019.

Research and development expenses increased $0.9 million in 2020 from $0.3 million in 2019, primarily due to increased activities related to electrical ? battery and vehicle research in the Company's electric vehicle segment, mainly on driverless street sweepers, as compared to the same period last year.

? Other expenses decreased 25.3% to $0.3 million from $0.4 million, primarily due to lower interest expense in 2020, as compared to 2019.

Net loss attributable to common stockholders of Tantech Holdings Ltd was ? increased to $6.5 million for the full year 2020 from a net loss of $6.3 million for the full year 2019, with net loss per share on both a basic and diluted basis of $0.22 in 2020 compared to $0.22 in 2019.

The Company maintains a positive working capital as of December 31, 2020 and generated positive cash flows from its operations for the years ended ? December 31, 2020 and 2019. As of December 31, 2020, the Company had a $37.1 million balance of cash and cash equivalents, with total shareholders' equity of approximately $99.5 million.

Mr. Wangfeng Yan, Chief Executive Officer of Tantech, said, "Our team remained focused during 2020 and adjusted to the global COVID-19 challenges. Government restrictions and closures slowed growth in our business, including the sales of our electric vehicles. We moved quickly, however, when the economy re-opened to restart our R&D efforts and re-engage with our supply channel and customers. On the other side, demand was stable in 2020 for our bamboo-based charcoal products, and our revenue from trading segment increased due to higher demands for our bamboo charcoal used for active charcoal masks, air purification and sanitation products in order to combat COVID-19. We were pleased that our strong supply chain relationships put us in a position to help people in such a difficult time."

Mr. Wangfeng Yan, Chief Executive Officer of Tantech, added, "We will continue to leverage our leadership position in the charcoal products industry to drive revenue, profit growth and increased operating cash flow. There are many opportunities in front of us given the estimated $30 billion size of the domestic China market for bamboo production, and bamboo's position as a pillar industry of economic development. Our many innovations and strong brand recognition give us a competitive advantage, as we work to achieve the Company's long-term strategic objectives. At the same time, we continue to build momentum in the EV market, where we currently hold more than 20 core technologies and patents about EV, including nanotechnology for raw materials for power lithium electronics, group technology of power lithium electronics and battery management technology. Our priority remains on leveraging our R&D expertise to develop new energy-efficient specialty-use electric vehicles, including driverless street sweepers. Our engineers have built sleek, high efficiency, low-operating-cost vehicles for the industrial market. Overall, we like the industrial EV market segment given its size, global footprint and support of favorable infrastructure policies in major markets."

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 in November 2020, with the plan 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 quality 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 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

December 31, December 31, 2020 2019

Assets

Current Assets

Cash and cash equivalents (Note 3 at VIE) $ 37,119,195 $ 12,440,457

Restricted cash (Note 3 at VIE) 220,109 205,520

Accounts receivable, net (Note 3 at VIE) 34,410,597 39,352,408

Inventories, net (Note 3 at VIE) 671,251 595,627

Advances to suppliers, net (Note 3 at VIE) 6,854,461 13,079,889

Advances to suppliers - related party 1,533,000 -

Prepaid taxes (Note 3 at VIE) 1,046,667 2,396,349

Prepaid expenses and other receivables, net (Note 3 at VIE) 45,467 91,377

Total Current Assets (Note 3 at VIE) 81,900,747 68,161,627

Property, plant and equipment, net (Note 3 at VIE) 2,477,912 2,700,034

Other Assets

Manufacturing rebate receivable (Note 3 at VIE) 5,755,237 7,746,116

Intangible assets, net (Note 3 at VIE) 664,033 12,959,017

Long-term Investment 25,497,316 23,883,983

Total Other Assets (Note 3 at VIE) 31,916,586 44,589,116

Total Assets (Note 3 at VIE) $ 116,295,245 $ 115,450,777

Liabilities and Stockholders' Equity

Current Liabilities

Short-term bank loans $ 5,564,790 $ 6,861,208

Bank acceptance notes payable (Note 3 at VIE) 1,753,109 205,520

Accounts payable (Note 3 at VIE) 1,543,994 1,650,851

Due to related parties (Note 3 at VIE) 2,019,087 1,838,603

Customer deposits (Note 3 at VIE) 3,183,088 6,742,659

Taxes payable (Note 3 at VIE) 571,354 102,704

Due to third parties 306,600 287,200

Accrued liabilities and other payables (Note 3 at VIE) 1,861,835 1,444,896

Total Current Liabilities (Note 3 at VIE) 16,803,857 19,133,641

Deferred tax liability (Note 3 at VIE) - 1,784,875

Total Liabilities (Note 3 at VIE) 16,803,857 20,918,516

Stockholders' Equity

Common stock, $0.001 par value, 50,000,000 shares authorized,

35,894,097 and 28,853,242 shares issued and outstanding as of 35,894 28,853

December 31, 2020 and 2019, respectively

Additional paid-in capital 48,392,181 39,310,178

Statutory reserves 6,437,506 6,379,276

Retained earnings 45,480,031 52,058,681

Accumulated other comprehensive loss (1,493,070) (7,590,943)

Total Stockholders' Equity attributable to the Company 98,852,542 90,186,045

Noncontrolling interest 638,846 4,346,216

Total Stockholders' Equity 99,491,388 94,532,261

Total Liabilities and Stockholders' Equity $ 116,295,245 $ 115,450,777

Tantech Holdings Ltd and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

For the Years Ended December 31

2020 2019

Revenues $ 42,283,670 $ 49,230,570

Cost of revenues 37,807,297 43,253,070

Gross Profit 4,476,373 5,977,500

Operating expenses

Selling expenses 977,201 319,946

General and administrative expenses 955,210 4,655,382

Impairment of goodwill and intangible asset 11,998,606 9,584,000

Research and development expenses 890,316 327,260

Total operating expenses 14,821,333 14,886,588

Income (loss) from operations (10,344,960) (8,909,088)

Other income (expenses)

Interest income 50,732 53,060

Interest expense (300,125) (443,262)

Other (loss) income, net (39,530) 3,669

Total other expenses (288,923) (386,533)

(Loss) income before income tax expense (10,633,883) (9,295,621)(credit)

Income tax expense (credit) (611,655) 363,662

Net (loss) income from continuing (10,022,228) (9,659,283)operations

Discontinued operation:

Income from discontinued operations, net of - 270,479tax

Loss from disposal of discontinued - (569,891)operations

Net (loss) income from discontinued - (299,412)operations

Net (loss) income (10,022,228) (9,958,695)

Less: net loss attributable tononcontrolling interest from continuing (3,501,808) (3,601,728)operations

Net (loss) income attributable to common $ (6,520,420) $ (6,356,967)stockholders of Tantech Holdings Ltd

Net (loss) income (10,022,228) (9,958,695)

Other comprehensive income (loss):

Foreign currency translation adjustment 5,892,311 (5,494,731)

Comprehensive (loss) income (4,129,917) (15,453,426)

Less: Comprehensive loss attributable (3,707,370) (3,571,880)to noncontrolling interest

Comprehensive income (loss) attributable to $ (422,547) $ (11,881,546)common stockholders of Tantech Holdings Ltd

(Loss) earnings per share - Basic andDiluted

Continuing operations $ (0.22) $ (0.21)

Discontinued operations $ 0.00 $ (0.01)

Total $ (0.22) $ (0.22)

Weighted Average Shares Outstanding - Basicand Diluted

Continuing operations and discontinued 29,566,243 28,853,242operations

Tantech Holdings Ltd and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31

2020 2019

Cash flows from operating activities

Net (loss) income $ (10,022,228) $ (9,958,695)

Net loss (income) from discontinued operations - 299,412

Net (loss) income from continuing operations (10,022,228) (9,659,283)

Adjustments to reconcile net income (loss) to net cash

provided by operating activities:

(Reversal of) Allowance for doubtful accounts - (845,416) 1,297,752accounts receivable

(Reversal of) Allowance for doubtful accounts - (378,233) 164,220advance to suppliers

(Reversal of) Allowance for doubtful accounts - (84,573) 705,400other receivables

Allowance for doubtful accounts - due from related - -party

Inventory reserve 92,064 1,030,236

Impairment of goodwill and intangible asset 11,998,606 9,584,000

Decrease in deferred tax liability (1,799,791) (165,500)

Depreciation expense 436,427 462,639

Amortization of intangible asset 441,489 441,489

Amortization of prepaid consulting expense - 140,738

Loss (gain) from disposal of property, plant and 68,614 (8,047)equipment

Issuance of common stock for service 33,812 -

Changes in operating assets and liabilities:

Accounts receivable - non-related party 8,024,036 (9,879,682)

Accounts receivable - related party - -

Advances to suppliers 7,093,022 415,727

Advances to suppliers, non-current - -

Advances to suppliers - related party (1,448,000) -

Inventory (125,492) 242,142

Prepaid expenses and other receivables 133,768 9,127

Manufacturing rebate receivable 2,374,720 1,563,840

Accounts payable (206,261) (751,363)

Accrued liabilities and other payables 313,552 (78,923)

Customer deposits (3,792,409) 6,184,836

Collection of receivable from discontinued operations - 8,962,187

Taxes payable 1,863,853 (597,392)

Net cash provided by continuing operations 14,171,560 10,064,143

Net cash provided by discontinued operations - 4,632,769

Net cash provided by operating activities 14,171,560 14,696,912

Cash flows from investing activities

Acquisition of property, plant and equipment (144,806) (92,369)

Proceeds from disposal of property, plant and 21,842 16,580equipment

Additions to intangible assets - -

Payment for investment - (6,707,570)

Proceeds from disposition of subsidiaries - 854,567

Net cash used in continuing operations (122,964) (5,928,792)

Net cash used in discontinued operations - (1,522)

Net cash used in investing activities (122,964) (5,930,314)

Cash flows from financing activities

Proceeds from (repayment of) loans from third parties - (2,823,890)

Notes receivable - -

Bank acceptance notes payable, net of repayment 1,448,667 (1,823,003)

Proceeds from bank loans 9,568,384 6,918,544

Repayment of bank loans (11,230,688) (7,352,944)

Proceeds from (repayment of) loans from related 98,474 (378,833)parties, net

Proceeds from issuance of common stock and warrants 9,055,232 -

Net cash provided by (used in) continuing operations 8,940,069 (5,460,126)

Net cash provided by discontinued operations - -

Net cash provided by (used in) financing activities 8,940,069 (5,460,126)

Effect of exchange rate changes on cash, restricted cash 1,704,662 (530,288)and cash equivalents

Net increase (decrease) in cash, restricted cash and cash equivalents 24,693,327 2,776,184

Cash, restricted cash and cash equivalents, beginning of year 12,645,977 9,869,793

Cash, restricted cash and cash equivalents, end of year $ 37,339,304 $ 12,645,977

Supplemental disclosure information:

Income taxes paid $ 436,566 $ 1,105,876

Interest paid $ 308,690 $ 439,869

Supplemental non-cash activities:

Common shares issued for service $ 33,812 $ -

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SOURCE Tantech Holdings Ltd.