Tantech Reports Financial Results for the First Six Months of 2021


    LISHUI, China, Oct. 23, 2021 /PRNewswire/ -- Tantech Holdings Ltd (NASDAQ: TANH) ("Tantech" or the "Company"), a clean energy company in China, today reported its unaudited financial results for the six months ended June 30, 2021.

    Mr. Wangfeng Yan, Chief Executive Officer of Tantech, said, "While we continue to have a competitive edge in selling our bamboo-based charcoal products, we have been working hard on the strategic shift in our business from being solely engaged in consumer product sales to expanding into the specialty vehicle market. We have focused on product costs as we have increased operating cash flow for our longer-term growth in the vehicle market. Ongoing COVID-19 challenges, including supply chain and logistics bottlenecks, have added cost and margin pressure in our ongoing consumer business, but we hope to see some stabilization into next year."

    "As to our specialty vehicle and electric vehicle (EV) business, we believe our feature-rich, environmentally friendly customizable midibuses present an attractive option for corporate customer as businesses return to normal operations. We have invested heavily in technology advancements for specialty-use EVs rather than the more competitive, domestic general consumer EV market for this reason. We are fully committed to the EV segment, which we expect will be a key long-term growth driver for us. Despite some recent delays in government rebates related to EVs, longer term we expect our specialty EV business will expand with customer demand for a cleaner environment and for zero-emission vehicles. Importantly, we had approximately $40.7 million cash at June 30, 2021, which gives us the ability to fund our growth initiatives and build value for shareholders."



    Financial Results

    For the Six Months Ended
    June 30,


    ($ millions, except per share data and
    percentages)


    2021



    2020



    Change


    Revenues


    $

    20.6



    $

    22.9




    (9.9)

    %

    Gross profit


    $

    4.0



    $

    3.1




    29.3

    %

    Gross margin



    19.3

    %



    13.4

    %



    5.9

     percentage points

    Operating expenses


    $

    9.7



    $

    1.3




    666.0

    %

    Net (loss) income attributable to common
    stockholders of Tantech Holdings Ltd


    $

    (6.6)



    $

    1.2




    (636.8)

    %

    Basic/Diluted (loss) earnings per share


    $

    (0.18)



    $

    0.04



    $

    (0.22)


     

     

    • Total revenue decreased by approximately $2.3 million, or 9.9%, to approximately $20.6 million in the six months ended June 30, 2021 from approximately $22.9 million in the same period of 2020. The decrease was mainly attributable to the decrease of the sales volume of the Company's consumer products.

     

    • Our gross profit increased by approximately $0.9 million, or 29.3% to approximately $4.0 million in the six months ended June 30, 2021 from approximately $3.1 million in the same period of 2020. The gross profit margin was 19.3% in the six months ended June 30, 2021, as compared to 13.4% in the same period of 2020. On a segment basis, gross margins for consumer product and EV segments were 19.1% and 38.5%, respectively, for the six months ended June 30, 2021, compared to 13.6% and 5.3%, respectively, for the six months ended June 30, 2020. The increase in overall gross margin was primarily attributable to the higher average selling price of our charcoal-based products, offset by the decease of selling volume as compared to the same period last year.

     

    • Research and development expenses increased by $6.0 million, or 1,996.4%, to $6.4 million in the six months ended June 30, 2021 from $0.3 million in the same period of 2020. The increase was primarily due to the R&D activities in connection with our EV segment. During the six months ended June 30, 2021, we increased our investment significantly for the smart electric sanitation vehicles designed for closed industrial parks and residential communities. We have manufactured two prototype model vehicles and expect to receive orders from potential customers in the near future.

     

    • Total operating expenses increased by $8.4 million, or 666.0%, to $9.7 million in the six months ended June 30, 2021 from $1.3 million in the same period of 2020, which was mainly due to  increased research and development expenses of $6.0 million and  increased share based compensation of $1.8 million for the six months ended June 30, 2021 as compared to the same period of 2020. 

     

    • Our loss before income tax was approximately $5.7 million for the six months ended June 30, 2021, compared to an income before income tax of approximately $1.7 million for the six months ended June 30, 2020.

     

    • The Company had approximately $40.7 million cash on hand, and maintained positive working capital as of June 30, 2021.

    About Tantech Holdings Ltd

    For the past decade, Tantech has been a highly specialized high-tech enterprise producing, researching and developing bamboo charcoal-based products with an established domestic and international sales and distribution network. Since 2017, when the Company acquired 70% of Shangchi Automobile, a vehicle manufacturer based in Zhangjiagang City, Jiangsu Province, it has manufactured and sold vehicles. The Company established two new subsidiaries, Lishui Smart New Energy Automobile Co., Ltd. and Zhejiang Shangchi New Energy Automobile Co., Ltd., in November 2020, to produce and sell street sweepers and other electric vehicles. The Company is fully ISO 90000 and ISO 14000 certified and has received a number of national, provincial and local honors, awards and certifications for its products and scientific research efforts. For more information please visit: http://ir.tantech.cn.

    Forward-Looking Statements

    This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the sales, plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the Company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

     

     

    Tantech Holdings Ltd and Subsidiaries

    Consolidated Balance Sheets

    (Unaudited)




    June 30,

    2021



    December 31,

    2020


    Assets









    Current Assets









    Cash and cash equivalents*


    $

    40,711,801



    $

    37,119,195


    Restricted cash*



    -




    220,109


    Accounts receivable, net*



    36,369,508




    34,410,597


    Inventories, net*



    420,194




    671,251


    Advances to suppliers, net *



    7,054,987




    6,854,461


    Advances to suppliers – related party



    -




    1,533,000


    Prepaid taxes*



    1,177,989




    1,046,667


    Prepaid expenses and other receivables, net*



    463,974




    45,467


    Total Current Assets*



    86,198,453




    81,900,747











    Property, plant and equipment, net*



    2,273,629




    2,477,912











    Other Assets









    Manufacturing rebate receivable*



    5,815,305




    5,755,237


    Intangible assets, net*



    434,913




    664,033


    Long-term Investment



    25,763,433




    25,497,316


    Total Other Assets*



    32,013,651




    31,916,586


    Total Assets*


    $

    120,485,733



    $

    116,295,245











    Liabilities and Stockholders' Equity









    Current Liabilities









    Short-term bank loans


    $

    5,313,070



    $

    5,564,790


    Bank acceptance notes payable*



    -




    1,753,109


    Accounts payable*



    2,305,363




    1,543,994


    Due to related parties*



    2,194,460




    2,019,087


    Customer deposits*



    6,167,807




    3,183,088


    Taxes payable*



    1,050,811




    571,354


    Due to third parties



    -




    306,600


    Accrued liabilities and other payables*



    960,446




    1,861,835


    Total Current Liabilities*



    17,991,957




    16,803,857


    Total Liabilities*



    17,991,957




    16,803,857











    Stockholders' Equity









    Common stock, $0.001 par value, 50,000,000 shares authorized,
    42,874,097 and 35,894,097 shares issued and outstanding as of June
    30, 2021 and December 31, 2020, respectively



    42,874




    35,894


    Additional paid-in capital



    57,164,201




    48,392,181


    Statutory reserves



    6,437,506




    6,437,506


    Retained earnings



    38,909,553




    45,480,031


    Accumulated other comprehensive loss



    (517,118)




    (1,493,070)


    Total Stockholders' Equity attributable to the Company



    102,037,016




    98,852,542


    Noncontrolling interest



    456,760




    638,846


    Total Stockholders' Equity



    102,493,776




    99,491,388


    Total Liabilities and Stockholders' Equity


    $

    120,485,733



    $

    116,295,245



    * please see "Note 3: Variable Interest Entities" in the notes accompanying the unaudited financial
    statements filed on the Company's Report of Foreign Private Issuer on Form 6-K dated October 22, 2021.

     

     

    Tantech Holdings Ltd and Subsidiaries

    Consolidated Statements of Comprehensive Loss

    (Unaudited)




    For the Six Months Ended

    June 30,




    2021



    2020


    Revenues


    $

    20,633,188



    $

    22,889,784


    Cost of revenues



    16,660,387




    19,817,263


    Gross Profit



    3,972,801




    3,072,521











    Operating expenses









    Selling expenses



    122,045




    201,217


    General and administrative expenses



    1,399,295




    763,945


    Share-based compensation



    1,840,000




    -


    Research and development expenses



    6,351,853




    302,553


    Total operating expenses



    9,713,193




    1,267,715











     (Loss) income from operations



    (5,740,392)




    1,804,806











    Other income (expenses)









    Interest income



    57,374




    17,962


    Interest expense



    (137,594)




    (184,288)


    Government subsidy income



    47,033




    10,926


    Rental income from a related party



    67,166




    -


    Other income, net



    1,796




    6,593


    Total other income (expenses)



    35,775




    (148,807)











    (Loss) income before provision for income taxes



    (5,704,617)




    1,655,999


    Provision for income taxes



    1,047,595




    684,804


    Net (loss) income



    (6,752,212)




    971,195


    Less: net loss attributable to noncontrolling interest



    (181,734)




    (253,220)


    Net (loss) income attributable to common stockholders of Tantech
    Holdings Ltd.


    $

    (6,570,478)



    $

    1,224,415











    Net (loss) income



    (6,752,212)




    971,195


    Other comprehensive income (loss):









    Foreign currency translation adjustment



    975,600




    (1,394,434)


    Comprehensive loss



    (5,776,612)




    (423,239)


    Less: Comprehensive loss attributable to noncontrolling interest



    (182,086)




    (251,974)


    Comprehensive loss attributable to common stockholders of
    Tantech Holdings Ltd.


    $

    (5,594,526)



    $

    (171,265)











    (Loss) earnings per share - Basic and Diluted


    $

    (0.18)



    $

    0.04


    Weighted Average Shares Outstanding - Basic and Diluted



    37,253,764




    28,872,602


     

     

    Tantech Holdings Ltd and Subsidiaries

    Consolidated Statements of Cash Flows

    (Unaudited)




    For the Six Months Ended June 30,




    2021



    2020


    Cash flows from operating activities









    Net (loss) income


    $

    (6,752,212)



    $

    971,195


    Adjustments to reconcile net income (loss) to net cash provided by (used in)
    operating activities:









    Depreciation expense



    234,756




    227,049


    Amortization of intangible asset



    235,593




    216,781


    Allowance for doubtful accounts - accounts receivable



    14,395




    -


    Loss from disposal of property, plant and equipment



    -




    2,867


    Issuance of common stock for services



    1,840,000




    33,812


    Inventory markdown



    296,702




    -


    Changes in operating assets and liabilities:









    Accounts receivable



    (1,611,062)




    (4,653,105)


    Advances to suppliers



    (128,735)




    9,607,140


    Advances to suppliers - related party



    1,546,000




    (1,422,000)


    Inventory



    (39,140)




    (1,317,697)


    Prepaid expenses and other receivables



    (417,223)




    8,280


    Accounts payable



    743,811




    1,032,112


    Accrued liabilities and other payables



    (917,137)




    232,756


    Customer deposits



    2,945,780




    (2,908,226)


    Taxes payable, net of prepaid taxes



    352,443




    409,442


    Net cash (used in) provided by operating activities



    (1,656,029)




    2,440,406











    Cash flows from investing activities









    Acquisition of property, plant and equipment



    (5,086)




    (9,524)


    Proceeds from disposal of property, plant and equipment



    -




    21,450


    Net cash (used in) provided by investing activities



    (5,086)




    11,926











    Cash flows from financing activities









    Proceeds from equity financing



    6,939,000




    -


    Repayment of loans from third party



    (309,200)




    -


    Bank acceptance notes payable, net of repayment



    (1,767,975)




    1,221,327


    Proceeds from bank loans



    2,473,600




    6,652,116


    Repayment of bank loans



    (2,782,800)




    (6,794,316)


    Proceeds from (repayment of) loans from related parties, net



    161,589




    (557,765)


    Net cash provided by financing activities



    4,714,214




    521,362











    Effect of exchange rate changes on cash, restricted cash and cash equivalents



    319,398




    (198,016)











    Net increase in cash, restricted cash and cash equivalents



    3,372,497




    2,775,678











    Cash, restricted cash and cash equivalents, beginning of period



    37,339,304




    12,645,977











    Cash, restricted cash and cash equivalents, end of period


    $

    40,711,801



    $

    15,421,655











    Supplemental disclosure information:









    Income taxes paid


    $

    709,980



    $

    28,487


    Interest paid


    $

    137,594



    $

    168,560


     

     

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