PR Newswire | Oct 22, 2021 04:30PM EDT

10/22 15:30 CDT

Tantech Reports Financial Results for the First Six Months of 2021 LISHUI, China, Oct. 22, 2021

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 2021 2020 Changepercentages)

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 $ (6.6) $ 1.2 (636.8) %stockholders of Tantech Holdings Ltd

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, December 31,

2021 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 42,874 35,89430, 2021 and December 31, 2020, respectively

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 theunaudited financialstatements filed on the Company's Report of Foreign Private Issuer on Form 6-Kdated 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 $ (6,570,478) $ 1,224,415Holdings Ltd.

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 $ (5,594,526) $ (171,265)Tantech Holdings Ltd.

(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

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SOURCE Tantech Holdings Ltd.