UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-34577

IT TECH PACKAGING, INC.

(Exact name of registrant as specified in its charter)

Nevada		20-4158835
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		identification No.)

Science Park, Juli Rd, Xushui District, Baoding City

Hebei Province, The People’s Republic of China 072550

(Address of principal executive offices and Zip Code)

011 - (86) 312-8698215

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001		ITP		NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

As of November 13, 2025, there were 16,965,420 shares of the registrant’s common stock, par value $0.001, outstanding.

TABLE OF CONTENTS

Part I. - FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46

Item 4.	Controls and Procedures	46

Part II. - OTHER INFORMATION		47

Item 1.	Legal Proceedings	47

Item 1A.	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3.	Defaults Upon Senior Securities	47

Item 4.	Mine Safety Disclosures	47

Item 5.	Other Information	48

Item 6.	Exhibits	48

SIGNATURES		49

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 2024

	September 30,			December 31,
	2025			2024
	(Unaudited)
ASSETS

Current Assets
Cash and bank balances	$	8,072,936		$	5,916,373
Restricted cash		1,046,771			1,034,203
Accounts receivable (net of allowance for doubtful accounts of $90,225 and $53,111 as of September 30, 2025 and December 31, 2024, respectively)		2,079,190			287,576
Inventories		3,899,571			2,351,876
Prepayments and other current assets		19,650,854			17,951,267
Due from related parties		1,015,043			920,008

Total current assets		35,764,365			28,461,303

Prepayment on property, plant and equipment		8,444			-
Operating lease right-of-use assets, net		347,477			421,868
Property, plant, and equipment, net		137,903,414			146,911,883
Value-added tax recoverable		1,674,492			1,751,732
Deferred tax asset non-current		-			-

Total Assets	$	175,698,192		$	177,546,786

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Short-term bank loans	$	5,094,645		$	4,451,616
Current portion of long-term loans		-			3,559,902
Lease liability		113,786			245,604
Accounts payable		-			1
Advance from customers		11,911			11,773
Due to related parties		374,565			43,468
Accrued payroll and employee benefits		369,886			207,508
Other payables and accrued liabilities		12,393,873			11,545,990
Income taxes payable		308,636			80,905

Total current liabilities		18,667,302			20,146,767

Long-term loans		4,727,324			1,112,904
Lease liability - non-current		254,030			231,147
Derivative liability		-			5,651

Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $18,629,300 and $16,976,765 as of September 30, 2025 and December 31, 2024, respectively)		23,648,656			21,496,469

Commitments and Contingencies

Stockholders’ Equity
Common stock $0.001 par value per share; Authorized: 50,000,000 shares; Issued and outstanding: 16,965,420 shares as of September 30, 2025 and 10,065,920 shares as of December 31, 2024, respectively.		16,965			10,066
Additional paid-in capital		90,228,996			89,172,771
Statutory earnings reserve		6,080,574			6,080,574
Accumulated other comprehensive loss		(11,159,033	)		(12,998,986	)
Retained earnings		66,882,034			73,785,892

Total stockholders’ equity		152,049,536			156,050,317

Total Liabilities and Stockholders’ Equity	$	175,698,192		$	177,546,786

See accompanying notes to condensed consolidated financial statements.

IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenues	$	25,601,344		$	25,081,500		$	61,293,251		$	58,195,129

Cost of sales		(23,579,498	)		(23,164,119	)		(57,913,574	)		(52,613,335	)

Gross Profit		2,021,846			1,917,381			3,379,677			5,581,794

Selling, general and administrative expenses		(3,018,187	)		(3,381,502	)		(9,516,283	)		(9,999,833	)
Gain on impairment of assets		3,709			-			3,709			-

Loss from Operations		(992,632	)		(1,464,121	)		(6,132,897	)		(4,418,039	)

Other Income (Expense):
Interest income		1,146			7,313			4,098			12,303
Interest expense		(150,702	)		(171,430	)		(427,520	)		(593,271	)
Gain on derivative liability		303			2			5,651			51

Loss before Income Taxes		(1,141,885	)		(1,628,236	)		(6,550,668	)		(4,998,956	)

Income Tax Expenses		(306,362	)		(345,710	)		(353,190	)		(799,273	)

Net Loss		(1,448,247	)		(1,973,946	)		(6,903,858	)		(5,798,229	)

Other Comprehensive Income
Foreign currency translation adjustment		1,180,212			2,843,180			1,839,953			1,785,411

Total Comprehensive (Loss) Income	$	(268,035	)	$	869,234		$	(5,063,905	)	$	(4,012,818	)

Losses Per Share:

Basic and Diluted Losses per Share	$	(0.11	)	$	(0.20	)	$	(0.51	)	$	(0.58	)

Outstanding – Basic and Diluted		13,617,133			10,065,920			13,617,133			10,065,920

See accompanying notes to condensed consolidated financial statements.

IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

(Unaudited)

	Nine Months Ended
	September 30,
	2025			2024
Cash Flows from Operating Activities:
Net income	$	(6,903,858	)	$	(5,798,229	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,664,999			10,346,181
Gain on derivative liability		(5,651	)		(51	)
Gain from disposal and impairment of property, plant and equipment		(3,709	)		-
(Recovery from) Allowance for bad debts		(26,677	)		30,262
Allowances for inventories, net		(31,522	)		(2,951	)
Deferred tax		-			-
Changes in operating assets and liabilities:
Accounts receivable		(1,811,293	)		(1,160,996	)
Prepayments and other current assets		(1,319,298	)		(122,747	)
Inventories		(1,477,521	)		(2,108,280	)
Accounts payable		(1	)		(4,979	)
Advance from customers		-			(99,219	)
Related parties		245,948			(365,452	)
Accrued payroll and employee benefits		158,777			121,000
Other payables and accrued liabilities		673,142			1,651,302
Income taxes payable		225,114			345,270
Net Cash Provided by Operating Activities		388,450			2,831,111

Cash Flows from Investing Activities:
Purchases of property, plant and equipment		(29,977	)		(315,152	)
Proceeds from sale of property, plant and equipment		4,191			-

Net Cash Used in Investing Activities		(25,786	)		(315,152	)

Cash Flows from Financing Activities:
Proceeds from issuance of shares and warrants, net		1,063,124			-
Proceeds from short term bank loans		5,057,067			845,082
Proceeds from long term loans		4,692,455			-
Repayment of bank loans		(9,162,791	)		(2,957,788	)

Net Cash Provided by (Used in) Financing Activities		1,649,855			(2,112,706	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents		156,612			97,740

Net Increase in Cash and Cash Equivalents		2,169,131			500,993

Cash, Cash Equivalents and Restricted Cash - Beginning of Period		6,950,576			4,391,921

Cash, Cash Equivalents and Restricted Cash - End of Period	$	9,119,707		$	4,892,914

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest, net of capitalized interest cost	$	434,714		$	382,493
Cash paid for income taxes	$	128,076		$	454,003

Cash and bank balances		8,072,936			4,414,848
Restricted cash		1,046,771			478,066
Total cash, cash equivalents and restricted cash shown in the statement of cash flows		9,119,707			4,892,914

See accompanying notes to condensed consolidated financial statements.

IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

(Unaudited)

									Accumulated
					Additional		Statutory		Other
	Common Stock				Paid-in		Earnings		Comprehensive			Retained
	Shares		Amount		Capital		Reserve		Income (loss)			Earnings			Total
Balance at December 31, 2023		10,065,920	$	10,066	$	89,172,771	$	6,080,574	$	(10,555,534	)	$	83,628,986		$	168,336,863
Foreign currency translation adjustment										1,785,411						1,785,411
Net loss													(5,798,229	)		(5,798,229	)
Balance at September 30, 2024		10,065,920	$	10,066	$	89,172,771	$	6,080,574	$	(8,770,123	)	$	77,830,757		$	164,324,045

Balance at December 31, 2024		10,065,920	$	10,066	$	89,172,771	$	6,080,574	$	(12,998,986	)	$	73,785,892		$	156,050,317
Issuance of shares to institutional investor		6,899,500		6,899		1,056,225										1,063,124
Foreign currency translation adjustment										1,839,953						1,839,953
Net loss													(6,903,858	)		(6,903,858	)
Balance at September 30, 2025		16,965,420	$	16,965	$	90,228,996	$	6,080,574	$	(11,159,033	)	$	66,882,034		$	152,049,536

See accompanying notes to condensed consolidated financial statements.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Organization and Business Background

IT Tech Packaging, Inc. (the “Company”) was incorporated in the State of Nevada on December 9, 2005, under the name “Carlateral, Inc.” Through the steps described immediately below, we became the holding company for Hebei Baoding Dongfang Paper Milling Company Limited (“Dongfang Paper”), a producer and distributor of paper products in China, on October 29, 2007.

Effective on August 1, 2018, we changed our corporate name to IT Tech Packaging, Inc.. The name change was effected through a parent/subsidiary short-form merger of IT Tech Packaging, Inc., our wholly-owned Nevada subsidiary formed solely for the purpose of the name change, with and into us. We were the surviving entity. In connection with the name change, our common stock began being traded under a new NYSE symbol, “ITP,” and a new CUSIP number, 46527C100, at such time.

On June 9, 2022, the Board of Directors of the Company approved a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-10 (the “Reverse Stock Split”). The Reverse Stock Split become effective on July 7, 2022 (the “Effective Date”), and the shares began trading on the split-adjusted basis on the NYSE American under the Company’s existing trading symbol “ITP” at market open on July 8, 2022. The new CUSIP number following the Reverse Stock Split is 46527C 209. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Reverse Stock Split.

On October 29, 2007, pursuant to an agreement and plan of merger (the “Merger Agreement”), the Company acquired DongfangZhiye Holding Limited (“Dongfang Holding”), a corporation formed on November 13, 2006 under the laws of the British Virgin Islands, and issued the shareholders of Dongfang Holding an aggregate of 7,450,497 (as adjusted for a four-for-one reverse stock split effected in November 2009) shares of our common stock, which shares were distributed pro-rata to the shareholders of Dongfang Holding in accordance with their respective ownership interests in Dongfang Holding. At the time of the Merger Agreement, Dongfang Holding owned all of the issued and outstanding stock and ownership of Dongfang Paper and such shares of Dongfang Paper were held in trust with Zhenyong Liu, Xiaodong Liu and Shuangxi Zhao, for Mr. Liu, Mr. Liu and Mr. Zhao (the original shareholders of Dongfang Paper) to exercise control over the disposition of Dongfang Holding’s shares in Dongfang Paper on Dongfang Holding’s behalf until Dongfang Holding successfully completed the change in registration of Dongfang Paper’s capital with the relevant PRC Administration of Industry and Commerce as the 100% owner of Dongfang Paper’s shares. As a result of the merger transaction, Dongfang Holding became a wholly owned subsidiary of the Company, and Dongfang Holding’s wholly owned subsidiary, Dongfang Paper, became an indirectly owned subsidiary of the Company.

Dongfang Holding, as the 100% owner of Dongfang Paper, was unable to complete the registration of Dongfang Paper’s capital under its name within the proper time limits set forth under PRC law. In connection with the consummation of the restructuring transactions described below, Dongfang Holding directed the trustees to return the shares of Dongfang Paper to their original shareholders, and the original Dongfang Paper shareholders entered into certain agreements with Baoding Shengde Paper Co., Ltd. (“Baoding Shengde”) to transfer the control of Dongfang Paper over to Baoding Shengde.

On June 24, 2009, the Company consummated a number of restructuring transactions pursuant to which it acquired all of the issued and outstanding shares of Shengde Holdings Inc., a Nevada corporation. Shengde Holdings Inc. was incorporated in the State of Nevada on February 25, 2009. On June 1, 2009, Shengde Holdings Inc. incorporated Baoding Shengde, a limited liability company organized under the laws of the PRC. Because Baoding Shengde is a wholly-owned subsidiary of Shengde Holdings Inc., it is regarded as a wholly foreign-owned entity under PRC law.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

To ensure proper compliance of the Company’s control over the ownership and operations of Dongfang Paper with certain PRC regulations, on June 24, 2009, the Company entered into a series of contractual agreements (the “Contractual Agreements”) with Dongfang Paper and Dongfang Paper Equity Owners via the Company’s wholly owned subsidiary Shengde Holdings Inc. (“Shengde Holdings”) a Nevada corporation and Baoding Shengde Paper Co., Ltd. (“Baoding Shengde”), a wholly foreign-owned enterprise in the PRC with an original registered capital of $10,000,000 (subsequently increased to $60,000,000 in June 2010). Baoding Shengde is mainly engaged in production and distribution of digital photo paper and single-use face masks and is 100% owned by Shengde Holdings. Prior to February 10, 2010, the Contractual Agreements included (i) Exclusive Technical Service and Business Consulting Agreement, which generally provides that Baoding Shengde shall provide exclusive technical, business and management consulting services to Dongfang Paper, in exchange for service fees including a fee equivalent to 80% of Dongfang Paper’s total annual net profits; (ii) Loan Agreement, which provides that Baoding Shengde will make a loan in the aggregate principal amount of $10,000,000 to Dongfang Paper Equity Owners in exchange for each such shareholder agreeing to contribute all of its proceeds from the loan to the registered capital of Dongfang Paper; (iii) Call Option Agreement, which generally provides, among other things, that Dongfang Paper Equity Owners irrevocably grant to Baoding Shengde an option to purchase all or part of each owner’s equity interest in Dongfang Paper. The exercise price for the options shall be RMB1 which Baoding Shengde should pay to each of Dongfang Paper Equity Owner for all their equity interests in Dongfang Paper; (iv) Share Pledge Agreement, which provides that Dongfang Paper Equity Owners will pledge all of their equity interests in Dongfang Paper to Baoding Shengde as security for their obligations under the other agreements described in this section. Specifically, Baoding Shengde is entitled to dispose of the pledged equity interests in the event that Dongfang Paper Equity Owners breach their obligations under the Loan Agreement or Dongfang Paper fails to pay the service fees to Baoding Shengde pursuant to the Exclusive Technical Service and Business Consulting Agreement; and (v) Proxy Agreement, which provides that Dongfang Paper Equity Owners shall irrevocably entrust a designee of Baoding Shengde with such shareholder’s voting rights and the right to represent such shareholder to exercise such owner’s rights at any equity owners’ meeting of Dongfang Paper or with respect to any equity owner action to be taken in accordance with the laws and Dongfang Paper’s Articles of Association. The terms of the agreement are binding on the parties for as long as Dongfang Paper Equity Owners continue to hold any equity interest in Dongfang Paper. A Dongfang Paper Equity Owner will cease to be a party to the agreement once it transfers its equity interests with the prior approval of Baoding Shengde. As the Company had controlled Dongfang Paper since July 16, 2007 through Dongfang Holding and the trust until June 24, 2009, and continued to control Dongfang Paper through Baoding Shengde and the Contractual Agreements, the execution of the Contractual Agreements is considered as a business combination under common control.

On February 10, 2010, Baoding Shengde and the Dongfang Paper Equity Owners entered into a Termination of Loan Agreement to terminate the above- mentioned $10,000,000 Loan Agreement. Because of the Company’s decision to fund future business expansions through Baoding Shengde instead of Dongfang Paper, the $10,000,000 loan contemplated was never made prior to the point of termination. The parties believe the termination of the Loan Agreement does not in itself compromise the effective control of the Company over Dongfang Paper and its businesses in the PRC.

An agreement was also entered into among Baoding Shengde, Dongfang Paper and the Dongfang Paper Equity Owners on December 31, 2010, reiterating that Baoding Shengde is entitled to 100% of the distributable profit of Dongfang Paper, pursuant to the above- mentioned Contractual Agreements. In addition, Dongfang Paper and the Dongfang Paper Equity Owners shall not declare any of Dongfang Paper’s unappropriated earnings as dividend, including the unappropriated earnings of Dongfang Paper from its establishment to 2010 and thereafter.

On June 25, 2019, Dongfang Paper entered into an acquisition agreement with the shareholder of Tengsheng Paper Co., Ltd. (“Tengsheng Paper”), a limited liability company organized under the laws of the PRC, pursuant to which Dongfang Paper would acquire Tengsheng Paper. Full payment of the consideration in the amount of RMB320 million (approximately $45 million) was made on February 23, 2022.

QianrongQianhui Hebei Technology Co., Ltd, a wholly owned subsidiary of Shengde holding, was incorporated on July 15, 2021. It is a service provider of high quality material solutions for textile, cosmetics and paper production.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company has no direct equity interest in Dongfang Paper. However, through the Contractual Agreements described above, the Company is found to be the primary beneficiary (the “Primary Beneficiary”) of Dongfang Paper and is deemed to have the effective control over Dongfang Paper’s activities that most significantly affect its economic performance, resulting in Dongfang Paper and its subsidiary, being treated as a controlled variable interest entity of the Company in accordance with Topic 810 - Consolidation of the Accounting Standards Codification (the “ASC”) issued by the Financial Accounting Standard Board (the “FASB”). The revenue generated from Dongfang Paper and Tengsheng Paper for the three and nine months ended September 30, 2025 and 2024 was accounted for 100% of the Company’s total revenue. Dongfang Paper and Tengsheng Paper also accounted for 96.09% and 96.07% of the total assets of the Company as of September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, details of the Company’s subsidiaries and variable interest entities are as follows:

Name	Date of Incorporation or Establishment	Place of Incorporation or Establishment	Percentage of Ownership	Principal Activity
Subsidiary:
Dongfang Holding	November 13, 2006	BVI	100%	Inactive investment holding
Shengde Holdings	February 25, 2009	State of Nevada	100%	Investment holding
Baoding Shengde	June 1, 2009	PRC	100%	Paper production and distribution
Qianrong	July 15, 2021	PRC	100%	New material technology service

Variable interest entity (“VIE”):
Dongfang Paper	March 10, 1996	PRC	Control*	Paper production and distribution
Tengsheng Paper	April 07, 2011	PRC	Control**	Paper production and distribution

*	Dongfang Paper is treated as a 100% controlled variable interest entity of the Company.

**	Tengsheng Paper is 100% subsidiary of Dongfang Paper.

However, uncertainties in the PRC legal system could cause the Company’s current ownership structure to be found to be in violation of any existing and/or future PRC laws or regulations and could limit the Company’s ability, through its subsidiary, to enforce its rights under these contractual arrangements. Furthermore, shareholders of the VIE may have interests that are different than those of the Company, which could potentially increase the risk that they would seek to act contrary to the terms of the aforementioned agreements.

In addition, if the current structure or any of the contractual arrangements were found to be in violation of any existing or future PRC law, the Company may be subject to penalties, which may include, but not be limited to, the cancellation or revocation of the Company’s business and operating licenses, being required to restructure the Company’s operations or being required to discontinue the Company’s operating activities. The imposition of any of these or other penalties may result in a material and adverse effect on the Company’s ability to conduct its operations. In such case, the Company may not be able to operate or control the VIE, which may result in deconsolidation of the VIE. The Company believes the possibility that it will no longer be able to control and consolidate its VIE will occur as a result of the aforementioned risks and uncertainties is remote.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company has aggregated the financial information of Dongfang Paper in the table below. The aggregate carrying value of Dongfang Paper’s assets and liabilities (after elimination of intercompany transactions and balances) in the Company’s condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 are as follows:

The Company and its consolidated subsidiaries are not required to provide financial support to the VIE, and no creditor (or beneficial interest holders) of the VIE have recourse to the assets of Company unless the Company separately agrees to be subject to such claims. There are no terms in any agreements or arrangements, implicit or explicit, which require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE does require financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIE.

	September 30,		December 31,
	2025		2024
	(Unaudited)
ASSETS

Current Assets
Cash and bank balances	$	7,049,454	$	5,850,910
Restricted cash		1,046,771		1,034,203
Accounts receivable		2,079,190		287,576
Inventories		3,899,571		2,351,876
Prepayments and other current assets		19,590,642		17,922,229
Due from related parties				-

Total current assets		33,665,628		27,446,794

Prepayment on property, plant and equipment		8,444		-
Operating lease right-of-use assets, net		347,477		421,868
Property, plant, and equipment, net		134,800,288		142,702,663
Deferred tax asset non-current		-		-

Total Assets	$	168,821,837	$	170,571,325

LIABILITIES

Current Liabilities
Short-term bank loans	$	591,091	$	-
Current portion of long-term loans		-		3,559,902
Lease liability		113,786		245,604
Accounts payable		-		-
Advance from customers		11,911		11,773
Due to related parties		26,550		26,244
Accrued payroll and employee benefits		315,006		172,239
Other payables and accrued liabilities		12,280,966		11,536,047
Income taxes payable		308,636		80,905

Total current liabilities		13,647,946		15,632,714

Long-term loans		4,727,324		1,112,904
Lease liability - non-current		254,030		231,147

Total liabilities	$	18,629,300	$	16,976,765

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(2) Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and notes required by the United States of America generally accepted accounting principles (“GAAP”) for annual financial statements are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024 of the Company, and its subsidiaries and variable interest entity (which we sometimes refer to collectively as “the Company”, “we”, “us” or “our”).

Principles of Consolidation

Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of September 30, 2025 and the results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for any future period.

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates.

Liquidity and Going Concern

As of September 30, 2025, the Company had current assets of $35,764,365 (including a VAT （“Value Added Tax”）recoverable of Tengsheng Paper in amount of $13,307,848), and current liabilities of $18,667,302, resulting in a working capital of $17,097,063. However, production of Tengsheng Paper has been suspended in 2024 and the nine months ended September 30, 2025, rendering related VAT unrecoverable in the short term. Net working capital excluding VAT recoverable as of September 30, 2025 was a working capital of $3,789,215. 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. Therefore, there was a substantial doubt about the ability of the Company to continue as a going concern that it may be unable to realize its assets and discharge its liabilities in the normal course of business as of September 30, 2025.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

To address these challenges, the Company plans to optimize its raw material structure and stabilize manufacturing capacity utilization, which will help to reduce procurement and production costs. Additionally, the Company is actively exploring new products and adjusting pricing strategies in a timely manner to secure a larger market share.

Furthermore, the Company will maintain rigorous control over inventory, working capital, and cash flow to mitigate financial risks. The Company will also strategically utilize financing quotas from the capital market to ensure the smooth and healthy operation of the company.

The Company’s continued existence as a going concern depends on the successful implementation of its business plan. This includes increasing market acceptance of its 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.

Valuation of long-lived asset

The Company reviews the carrying value of long-lived assets to be held and used when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

Fair Value Measurements

The Company has adopted ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts that the Company could realize in a current market exchange. As of September 30, 2025 and December 31, 2024, the carrying value of the Company’s short term financial instruments, such as cash and cash equivalents, accounts receivable, accounts and short-term bank loans and balance due to a related party, approximate at their fair values because of the short maturity of these instruments; while loans from credit union and loans from a related party approximate at their fair value as the interest rates thereon are close to the market rates of interest published by the People’s Bank of China.

Management determined that liabilities created by beneficial conversion features associated with the issuance of certain warrants (see “Derivative liabilities” under Note (11)), meet the criteria of derivatives and are required to be measured at fair value. The fair value of these derivative liabilities was determined based on management’s estimate of the expected future cash flows required to settle the liabilities. This valuation technique involves management’s estimates and judgment based on unobservable inputs and is classified in level 3.

Non-Recurring Fair Value Measurements

The Company reviews long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow.

Share-Based Compensation

The Company uses the fair value recognition provision of ASC Topic 718, Compensation-Stock Compensation, which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the vesting period.

The Company also applies the provisions of ASC Topic 505-50, Equity Based Payments to Non-Employees to account for stock-based compensation awards issued to non-employees for services. Such awards for services are recorded at either the fair value of the consideration received or the fair value of the instruments issued in exchange for such services, whichever is more reliably measurable.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(3) Restricted Cash

Restricted cash of $1,046,771 and $1,034,203 as of September 30, 2025 and December 31, 2024 was presented for the cash deposited mainly at the Industrial and Commercial Bank of China of Tengsheng Paper. The deposits were restricted due to the legal proceeding against Tengsheng Paper and Jie Ping, who served as the executive director and the legal representative of Tengsheng Paper.

(4) Inventories

Raw materials inventory includes mainly recycled paper board and recycled white scrap paper. Finished goods include mainly products of corrugating medium paper, offset printing paper and tissue paper products. Inventories consisted of the following as of September 30, 2025 and December 31, 2024:

	September 30,			December 31,
	2025			2024
Raw Materials
Recycled paper board	$	2,630,267		$	1,353,543
Recycled white scrap paper		10,613			10,491
Gas		50,683			16,334
Base paper and other raw materials		177,095			132,348
		2,868,658			1,512,716
Semi-finished Goods		299,243			295,792
Finished Goods		1,434,505			1,269,487
Total inventory, gross		4,602,406			3,077,995
Inventory reserve		(702,835	)		(726,119	)
Total inventory, net	$	3,899,571		$	2,351,876

The movement of inventory reserve was as follows:

	Nine Months Ended September 30,
	2025			2024

Balance at beginning of year	$	726,119		$	2,959
Additional charge (written off), net		(31,522	)		(2,951	)
Foreign currency translation difference		8,238			(8	)

Balance at the end of year	$	702,835		$	-

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(5) Prepayments and other current assets

Prepayments and other current assets consisted of the following as of September 30, 2025 and December 31, 2024:

	September 30,			December 31,
	2025			2024
Prepayment for purchase of materials	$	6,839,665		$	5,634,870
Value-added tax recoverable		13,307,848			13,154,375
Prepayment for utilities		237,187			14,096
Prepaid land lease		62,973			-
Others		10,453			8,527
Allowance for doubtful accounts		(807,272	)		(860,601	)
	$	19,650,854		$	17,951,267

The movement of allowance for doubtful accounts was as follows:

	Nine Months Ended September 30,
	2025			2024

Balance at beginning of year	$	860,601		$	-
Additional charge (written off), net		(62,903	)		7,042
Foreign currency translation difference		9,574			93

Balance at the end of year	$	807,272		$	7,135

(6) Property, plant and equipment, net

As of September 30, 2025 and December 31, 2024, property, plant and equipment consisted of the following:

	September 30,			December 31,
	2025			2024

Land use rights	$	81,243,077		$	80,306,144
Building and improvements		67,357,592			66,580,793
Machinery and equipment		158,001,509			156,179,361
Vehicles		334,878			343,088
Totals		306,937,056			303,409,386
Less: accumulated depreciation and amortization		(169,033,642	)		(156,497,503	)
Property, Plant and Equipment, net	$	137,903,414		$	146,911,883

As of September 30, 2025 and December 31, 2024, land use rights represented twenty four parcels of state-owned lands located in Xushui District and Wei County of Hebei Province in China, with lease terms of 50 years expiring in 2061 and 2068, respectively.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of September 30, 2025 and December 31, 2024, certain property, plant and equipment of Dongfang Paper with net values of $nil, have been pledged pursuant to a long-term loan from credit union of Dongfang Paper. Certain property, plant and equipment of Baoding Shengde with net value of $2,282,024 and $3,407,848, respectively, as of September 30, 2025 and December 31, 2024, have been pledged pursuant two short-term loans from credit union of Baoding Shengde. Certain property, plant and equipment of Dongfang Paper with net values of $132,208 was pledged for a short-term loan from Bank of Cangzhou. Certain property, plant and equipment of Dongfang Paper with net values of $222,500 was pledged for another short-term loan from Bank of Cangzhou. See “Short-term bank loans” under Note (8), Loans Payable, for details of the transaction and asset collaterals.

Depreciation and amortization of property, plant and equipment was $3,574,417 and $3,483,298 for the three months ended September 30, 2025 and 2024, respectively. Depreciation and amortization of property, plant and equipment was $10,664,999 and $10,346,181 for the nine months ended September 30, 2025 and 2024, respectively.

(7) Leases

Operating lease lessor

The Company had a non-cancellable agreement to lease plant to tenant under operating lease for 1 year from November 2023 to November 2024. The lease did not contain contingent payments. The rental income of the year was paid in advance by the tenant in December 2023.

Operating lease as lessee

The Company leases space under non-cancelable operating leases for plant and production equipment. The lease does not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the lease does not contain contingent rent provisions.

The lease include option to renew in condition that it is agreed by the landlord before expiry. Therefore, the majority of renewals to extend the lease terms are not included in its right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluate the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term.

As the Company’s leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The components of the Company’s lease expense are as follows:

	Nine Months Ended
	September 30, 2025
	RMB

Operating lease cost		78,728
Short-term lease cost		-
Lease cost		78,728

Supplemental cash flow information related to its operating leases was as follows for the period ended September 30, 2025:

Cash paid for amounts included in the measurement of lease liabilities:

	Nine Months Ended
	September 30, 2025
	RMB
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflow from operating leases		139,698

Maturities of its lease liabilities for all operating leases are as follows as of September 30, 2025:

September 30,	Amount
2026		140,736
2027		140,736
2028		140,736
Thereafter		-
Total operating lease payments	$	422,208
Less: Interest		(54,392	)
Present value of lease liabilities		367,816
Less: current portion, record in current liabilities		(113,786	)
Present value of lease liabilities		254,030

The weighted average remaining lease terms and discount rates for all of its operating leases were as follows as of September 30, 2025:

	September 30,
	2025
Remaining lease term and discount rate:	RMB
Weighted average remaining lease term (years)		2.9
Weighted average discount rate		7.56	%

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(8) Loans Payable

Short-term bank loans

	September 30,		December 31,
	2025		2024
Rural Credit Union of Xushui District Loan 1	$	-	$	1,808,469
Rural Credit Union of Xushui District Loan 2		-		2,225,808
Rural Credit Union of Xushui District Loan 3		1,829,569		-
Rural Credit Union of Xushui District Loan 4		2,251,777		-
Bank of Cangzhou Loan 1		309,619		-
Bank of Cangzhou Loan 2		70,368		-
Bank of Cangzhou Loan 3		211,104		-
Industrial and Commercial Bank of China (“ICBC”) Loan 1		-		2,782
ICBC Loan 2		-		139,113
ICBC Loan 3		-		139,113
ICBC Loan 4		-		136,331
ICBC Loan 5		2,815		-
ICBC Loan 6		140,736		-
ICBC Loan 7		140,736		-
ICBC Loan 8		137,921		-

Total short-term bank loans	$	5,094,645	$	4,451,616

On December 24, 2024, the Company entered into a loan agreement with the Rural Credit Union of Xushui District, with a balance of $nil and $1,808,469 as of September 30, 2025 and December 31, 2024, respectively. The loan was secured by the equipment of Baoding Shengde as collateral for the benefit of the bank. The loan bore a fixed rate of 6%. The loan was repaid on September 30, 2025.

On December 24, 2024, the Company entered into a loan agreement with the Rural Credit Union of Xushui District, with a balance of $nil and $2,225,808 as of September 30, 2025 and December 31, 2024, respectively. The loan was secured by the equipment of Baoding Shengde as collateral for the benefit of the bank and guaranteed by a third party company. The loan bore a fixed rate of 6%. The loan was repaid on September 30, 2025.

On September 30, 2025, the Company entered into a loan agreement with the Rural Credit Union of Xushui District, with a balance of $1,829,569 as of September 30, 2025. The loan is guaranteed by Mr. Liu Zhenyong and 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 September 29, 2026.

On September 30, 2025, the Company entered into a loan agreement with the Rural Credit Union of Xushui District, with a balance of $2,251,777 as of September 30, 2025. 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 September 29, 2026.

On December 28, 2024, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $309,619 at a fixed interest rate of 5.5% per annum. The loan is guaranteed by Mr. Liu Zhenyong. The loan will be due by December 27, 2025.

On December 28, 2024, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $70,368 at a fixed interest rate of 5.5% per annum. The loan is secured by the Company’s manufacturing equipment and guaranteed by Mr. Liu Zhenyong. The loan will be due by December 27, 2025.

On March 10, 2025, the Company entered into a working capital loan agreement with the Bank of Cangzhou, to borrow $211,104 at a fixed interest rate of 5.5% per annum. The loan is secured by the Company’s manufacturing equipment and guaranteed by Mr. Liu Zhenyong. The loan will be due by March 9, 2026.

On June 11, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $nil and $2,782 as of September 30, 2025 and December 31, 2024, respectively. The loan bore a fixed interest rate of 3.45% per annum. The loan was repaid on June 10, 2025.

On June 21, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $nil and $139,113 as of September 30, 2025 and December 31, 2024, respectively. The loan bore a fixed interest rate of 3.45% per annum. The loan was repaid on June 3, 2025.

On June 22, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $nil and $139,113 as of September 30, 2025 and December 31, 2024, respectively. The loan bore a fixed interest rate of 3.45% per annum. The loan was repaid on June 10, 2025.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On June 24, 2024, the Company entered into a working capital loan agreement with the ICBC, with a balance of $nil and $136,331 as of as of September 30, 2025 and December 31, 2024, respectively. The loan bore a fixed interest rate of 3.45% per annum. The loan was repaid on June 9, 2025.

On June 10, 2025, the Company entered into a working capital loan agreement with the ICBC, with a balance of $2,815 as of September 30, 2025. The loan bears a fixed interest rate of 3.00% per annum. The loan is due for repayment by June 10, 2026.

On June 3, 2025, the Company entered into a working capital loan agreement with the ICBC, with a balance of $140,736 as of September 30, 2025. The loan bears a fixed interest rate of 3.00% per annum. The loan is due for repayment by June 3, 2026.

On June 10, 2025, the Company entered into a working capital loan agreement with the ICBC, with a balance of $140,736 as of September 30, 2025. The loan bears a fixed interest rate of 3.00% per annum. The loan is due for repayment by June 10, 2026.

On June 9, 2025, the Company entered into a working capital loan agreement with the ICBC, with a balance of $137,921 as of September 30, 2025. The loan bears a fixed interest rate of 3.00% per annum. The loan is due for repayment by June 9, 2026.

As of September 30, 2025, there were guaranteed short-term borrowings of $4,672,437 and unsecured bank loans of $422,208. As of December 31, 2024, there were guaranteed short-term borrowings of $2,225,808 and unsecured bank loans of $417,339.

The average short-term borrowing rates for the three months ended September 30, 2025 and 2024 were approximately 5.71% and 4.47%, respectively. The average short-term borrowing rates for the nine months ended September 30, 2025 and 2024 were approximately 5.72% and 4.47%, respectively.

Long-term loans

As of September 30, 2025 and December 31, 2024, long-term loans were $4,727,324 and $4,672,806, respectively.

	September 30,		December 31,
	2025		2024
Rural Credit Union of Xushui District Loan 1	$	-	$	3,476,434
Rural Credit Union of Xushui District Loan 2		-		1,196,372
Rural Credit Union of Xushui District Loan 3		3,516,994		-
Rural Credit Union of Xushui District Loan 4		1,210,330		-
Total		4,727,324		4,672,806
Less: Current portion of long-term loans		-		(3,559,902	)
Long-term loans	$	4,727,324	$	1,112,904

As of September 30, 2025, the Company’s long-term debt repayments for the next coming years were as follows:

	Amount
Fiscal year
Remainder of 2025	$	-
2026 & after		4,727,324
Total		4,727,324

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, 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. Effective from December 3, 2024, the interest rate was reduced to 6% per annum. The loan was fully repaid on August 15, 2025. As of September 30, 2025 and December 31, 2024, the total outstanding loan balance was $nil and $3,476,434. Out of the total outstanding loan balance, current portion amounted was $nil and $2,641,756, which is presented as current liabilities in the consolidated balance sheet and the remaining balance of $nil and $834,678 is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2025 and December 31, 2024, respectively.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 is 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. Effective from December 3, 2024, the interest rate was reduced to 6% per annum. The loan was fully repaid on August 15, 2025. As of September 30, 2025 and December 31, 2024, total outstanding loan balance was $nil and $1,196,372, respectively. Out of the total outstanding loan balance, current portion amounted $nil and $918,146, which is presented as current liabilities and the remaining balance of $nil and $278,226 is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2025 and December 31, 2024, respectively.

On August 15, 2025, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 3 years, which is due and payable on August 14, 2028. The loan is secured by certain of the Company’s manufacturing equipment with net book value of $nil as of September 30, 2025. Interest payment is due monthly and bore a rate of 6% per annum. As of September 30, 2025, the total outstanding loan balance was $3,516,994, which is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2025.

On August 15, 2025, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 3 years, which is due and payable on August 14, 2028. The loan is guaranteed by an independent third party. Interest payment is due monthly and bore a rate of 6% per annum. As of September 30, 2025, the total outstanding loan balance was $1,210,330, which is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2025.

Total interest expenses for the short-term bank loans and long-term loans for the three months ended September 30, 2025 and 2024 were $150,701 and $171,430, respectively. Total interest expenses for the short-term bank loans and long-term loans for the nine months ended September 30, 2025 and 2024 were $427,520 and $593,271, respectively.

(9) Related Party Transactions

Name		Relationship with the Company
Mr. Liu Zhenyong		Controlling shareholder and Chief Executive Officer of the Company
Mr. Ma Yundong		Shareholder of Tengsheng Paper and general manager of QianrongQianhui Hebei Technology Co., Ltd
Mr. Liu Xiaodong		Vice general manager of Dongfang Paper
Mr. Liu Zhenhui		Vice general manager of Dongfang Paper
Baoding Longping Waste Materials Recycling Co., Ltd (“Bao Ding Long Ping”)		30% owned by Mr. Liu Zhenhui
Baoding XuanKang Renewable resources recycling Co., Ltd (“Bao Ding Xuan Kang”)		100% owned by Mr. Liu Zhenhui
Baoding Yuehao Trading Co., Ltd. (“Bao Ding Yue Hao”)		100% owned by Mr. Liu Zhenhui

Due from related parties

	September 30,		December 31,
	2025		2024

Bao Ding Long Ping	$	923,705	$	920,008
Bao Ding Xuan Kang		91,338		-

	$	1,015,043	$	920,008

Amount due from Bao Ding Long Ping and Bao Ding Xuan Kang represent interest-free loans extended to these related parties.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Due to related parties

	September 30,		December 31,
	2025		2024

Mr. Liu Zhenyong	$	189,948	$	1,242
Mr. Ma Yundong		47,955		40,835
Mr. Liu Xiaodong		10,000		-
Bao Ding Xuan Kang		-		1,391
Bao Ding Yue Hao		126,662
	$	374,565	$	43,468

Mr. Liu Zhenyong had loaned money to Dongfang Paper for working capital purposes over a period of time. On January 1, 2013, Dongfang Paper and Mr. Liu Zhenyong 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 $360,754 and $356,594 of interest were outstanding to Mr. Liu Zhenyong, which were recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of September 30, 2025 and December 31, 2024, respectively.

On December 10, 2014, Mr. Liu Zhenyong 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. Liu Zhenyong, 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, 2025 and December 31, 2024, approximately $42,221 and $41,734 of interest were outstanding to Mr. Liu Zhenyong, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

On March 1, 2015, the Company entered an agreement with Mr. Liu Zhenyong 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. Liu Zhenyong. The loan would be originally due on July 12, 2018. Mr. Liu Zhenyong 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. Liu Zhenyong, 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, 2025 and December 31, 2024, the outstanding interest was $193,424 and $191,193, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

In October 2022 and November 2022, the Company entered into two agreements with Mr. Zhenyong Liu, which allowed Mr. Liu Zhenyong 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. Liu Zhengyong in August 2023 and the remaining balance was repaid in December 2023. Interest income of the loan for the three and nine months ended September 30, 2025 and 2024 were $nil.

As of September 30, 2025 and December 31, 2024, total amount of loans due to Mr. Liu Zhenyong were $nil. The interest expense incurred for such related party loans were $nil for the three and nine months ended September 30, 2025 and 2024. The net interest owed to Mr. Liu Zhenyong was approximately $308,154 and $304,600, as of September 30, 2025 and December 31, 2024, respectively, which was recorded in other payables and accrued liabilities.

As of September 30, 2025 and December 31, 2024, amount due to Mr. Liu Zhenyong was $189,948 and $1,242, respectively, which mainly represents funds from Mr. Liu Zhenyong to pay for various expenses incurred in the U.S. The amount is due on demand with interest free.

As of September 30, 2025 and December 31, 2024, amount due to Mr. Ma Yundong was $47,955 and $40,835, respectively, which mainly represents funds from Mr. Ma Yundong to pay for various expenses incurred in Tengsheng Paper and Qianrong. The amount is due on demand with interest free.

As of September 30, 2025 and December 31, 2024, amount due to Mr. Liu Xiaodong was $10,000 and $nil, respectively, which represents fund from Mr. Liu Xiaodong to pay for expenses incurred in in the U.S. The amount is due on demand with interest free.

Amount due to Bao Ding Yue Hao represents an interest-free loan from this related party.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(10) Other payables and accrued liabilities

	September 30,		December 31,
	2025		2024
Accrued electricity	$	117,945	$	2,964
Accrued litigation costs		498,439		461,855
Value-added tax payable		414,459		21,868
Accrued interest to a related party		308,154		304,600
Payable for purchase of property, plant and equipment		10,836,652		10,711,678
Accrued commission to salesmen		15,180		3,877
Accrued bank loan interest		7,881		14,955
Others		195,163		24,193
Totals	$	12,393,873	$	11,545,990

(11) Derivative Liabilities

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 since the warrant becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

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 Company determined its derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of September 30, 2025. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each warrant is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in the September 30, 2025:

		Nine months ended
		September 30, 2025
Expected term		0.15 - 2.5
Expected average volatility		94% - 132%
Expected dividend yield		-
Risk-free interest rate		0.45% - 3.98%

The following table summarizes the changes in the derivative liabilities during the nine months ended September 30, 2025: Fair Value Measurements Using Significant Observable Inputs (Level 3)

Balance at December 31, 2024	$	5,651
Change in fair value of derivative liability		(5,651	)
Balance at September 30, 2025	$	-

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(12) Common Stock

Issuance of common stock to investors

On May 13, 2025, the Company entered into a securities purchase agreement with an institutional investor (the “Purchaser”), pursuant to which the Company agreed to sell and issue to the Purchaser, in a public offering that included certain additional other purchasers, an aggregate of 6,899,500 shares of common stock, par value $0.001, at a purchase price of $0.20 per share, for aggregate gross proceeds to the Company of approximately $1.4 million, before deducting the placement agent fees and estimated offering expenses payable by the Company.

(13) Warrants

On April 29, 2020, the Company and certain institutional investors entered into a securities purchase agreement, as amended on May 4, 2020 (the “2020 Purchase Agreement”), pursuant to which the Company agreed to sell to such investors an aggregate of 440,000 shares of common stock and warrants to purchase up to 440,000 shares of common stock in a concurrent private placement (the “May 2020 Warrants”). The exercise price of the May 2020 Warrant is $7.425 per share. These warrants become exercisable on July 23, 2020 and have a term of exercise equal to five years from the date of issuance till July 23, 2025. 88,000 May 2020 Warrants were exercised in February 2021 at the exercise price of $7.425 per share and nil May 2020 Warrants were outstanding as of September 30, 2025.

On January 20, 2021, the Company offered and sold to certain institutional investors an aggregate of 2,618,182 shares of common stock and 2,618,182 warrants to purchase up to 2,618,182 shares of common stock (the “January 2021 Warrants”). The January 2021 Warrants became exercisable on January 20, 2021 at an exercise price of $5.5 and will expire on January 20, 2026. 1,410,690 January 2021 Warrants were exercised in January and February of 2021 at the exercise price of $5.5 per share. 1,207,492 January 2021 Warrants were outstanding as of September 30, 2025.

On March 1, 2021, the Company offered and sold to the public investors an aggregate of 2,927,786 shares of common stock and 1,463,893 warrants to purchase up to 1,463,893 shares of common stock (the “March 2021 Warrants”). The March 2021 Warrants became exercisable on March 1, 2021 at an exercise price of $7.5 and will expire on March 1, 2026. 6,750 March 2021 Warrants were exercised in January and March 2021 at the exercise price of $7.5 per share and 1,457,143 March 2021 Warrants were outstanding as of September 30, 2025.

The Company classified warrants as liabilities and accounted for the issuance of the warrants as a derivative.

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A summary of stock warrant activities is as below:

	Nine months ended September 30, 2025
	Number			Weight average exercise price
Outstanding and exercisable at beginning of the period		3,016,635		$	6.6907
Issued during the period		-			-
Exercised during the period		-			-
Expired during the period		(352,000	)		7.425
Outstanding and exercisable at end of the period		2,664,635		$	6.5937

The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2025:

Warrants Outstanding						Warrants Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
	2,664,635		0.37	$	6.5937		2,664,635	$	6.5937

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at September 30, 2025 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). The intrinsic value of the warrants as of September 30, 2025 and December 31, 2024 are nil.

(14) Earnings Per Share

For the three months ended September 30, 2025 and 2024, basic and diluted net loss per share are calculated as follows:

	Three Months Ended September 30,
	2025			2024
Basic loss per share
Net loss for the period - numerator	$	(1,448,247	)	$	(1,973,946	)
Weighted average common stock outstanding - denominator		13,617,133			10,065,920

Net loss per share	$	(0.11	)	$	(0.20	)

Diluted loss per share
Net loss for the period - numerator	$	(1,448,247	)	$	(1,973,946	)
Weighted average common stock outstanding - denominator		13,617,133			10,065,920

Effect of dilution		-			-
Weighted average common stock outstanding - denominator		13,617,133			10,065,920

Diluted loss per share	$	(0.11	)	$	(0.20	)

IT TECH PACKAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For the nine months ended September 30, 2025 and 2024, basic and diluted net loss per share are calculated as follows:

	Nine Months Ended September 30,
	2025	2024
Basic loss per share
Net loss for the period - numerator

SEC Form 10-Q filed by IT Tech Packaging Inc.