タンテックHDの年次報告

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2025

☐	TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report __________

Commission file number 001-36885

TANTECH HOLDINGS LTD

(Exact name of registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s Name into English)

British Virgin Islands

(Jurisdiction of incorporation or organization)

No. 10 Cen Shan Road, Shuige Industrial Zone, Lishui City

Zhejiang Province 323000

People’s Republic of China

(Address of principal executive offices)

Mr. Weilin Zhang

No. 10 Cen Shan Road, Shuige Industrial Zone, Lishui City

Zhejiang Province 323000

People’s Republic of China

Tel: +86-578-226-2305

Fax: +86-578-226-2360

Email: tantech@tantech.cn

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

		Name of each exchange on which
Title of each class	Trading Symbol	registered
Class A common shares	TANH	The Nasdaq Capital Market

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

Class A Common Shares

(Title of Class)

The number of outstanding shares of each of the issuer’s classes of capital or common share as of the close of the period covered by the annual report was: 6,214,872 Class A common shares*

(* Reflecting the common share reclassification effected on February 2, 2026)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

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, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Emerging growth company

☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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 ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒

International Financial Reporting Standards as issued by the International Accounting Standards Board ☐

Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

TABLE OF CONTENTS

PART I

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	4

ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	4

ITEM 3.	KEY INFORMATION	4

ITEM 4.	INFORMATION ON THE COMPANY	42

ITEM 4A.	UNRESOLVED STAFF COMMENTS	75

ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	75

ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	84

ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	93

ITEM 8.	FINANCIAL INFORMATION	96

ITEM 9.	THE OFFER AND LISTING	96

ITEM 10.	ADDITIONAL INFORMATION	97

ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	104

ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	104

PART II

ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	105

ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	105

ITEM 15.	CONTROLS AND PROCEDURES	105

ITEM 15T.	CONTROLS AND PROCEDURES	107

ITEM 16.	[RESERVED]	107

ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	107

ITEM 16B.	CODE OF ETHICS	107

ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	108

ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	108

ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	109

ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	109

ITEM 16G.	CORPORATE GOVERNANCE	109

ITEM 16H.	MINE SAFETY DISCLOSURE	109

ITEM 16I	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	109

ITEM 16J	INSIDER TRADING POLICY	110

ITEM 16K	CYBERSECURITY	110

PART III

ITEM 17.	FINANCIAL STATEMENTS	111

ITEM 18.	FINANCIAL STATEMENTS	111

ITEM 19.	EXHIBITS	112

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Special Note Regarding Forward-Looking Statements

This annual report contains forward-looking statements. All statements contained in this annual report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” section. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this annual report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of these forward-looking statements after the date of this annual report or to conform these statements to actual results or revised expectations.

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable for annual reports on Form 20-F.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable for annual reports on Form 20-F.

ITEM 3. KEY INFORMATION

Our Corporate Structure and the Operations of Our PRC Subsidiaries

Tantech Holdings Ltd (“THL,” “we,” “our” or “us”) is not a PRC operating company but a holding company incorporated in the British Virgin Islands (“BVI”). As a holding company, we conduct a substantial portion of our operations through our subsidiaries based in mainland China. Therefore, investing in our securities involves unique and a high degree of risk. You should carefully read and consider the risk factors of this report (beginning on page 13), especially the risk factors under the caption “Risks Related to Doing Business in China” (beginning on Page 23).

The securities registered under the Securities Act and the Exchange Act are of the offshore holding company, Tantech Holdings Ltd, a British Virgin Islands company, which owns equity interests, directly or indirectly, of the operating subsidiaries. Subsidiaries conduct operations in China and the U.S., and the holding company does not conduct operations in China or the U.S. As a holding company with no material operations of its own, the majority of the Company’s business is conducted by our PRC subsidiaries with a portion operated by our non-PRC subsidiaries. Investors of our securities do not and may never have equity ownership in our subsidiaries based in China. This holding structure involves unique risks to investors in that the PRC government could disallow our holding company structure, which would result in a material change in our operations and the value of such securities could significantly decline or become worthless. See “Risk Factors — Risks Related to Doing Business in China.”

The following diagram illustrates our Company’s organizational structure as of the date of this annual report:

Our corporate structure contains no variable interest entities through contractual arrangements, and the industries in which we operate are not subject to foreign ownership limitations in mainland China. However, there are uncertainties with respect to the PRC legal system, and there may be changes in laws, regulations and policies, including how those laws, regulations and policies will be interpreted or implemented. If, in the future, the PRC government determines that our corporate structure does not comply with PRC regulations, or if PRC regulations change or are interpreted differently, the value of our Class A common shares (the “Common Shares”) may decline or become worthless.

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We are subject to legal and operational risks associated with being based in or having the majority of the Company’s operations in the PRC. PRC laws and regulations can change quickly with little advance notice, and Chinese regulatory authorities could change the rules and regulations regarding foreign ownership in the industry in which the Company operates, which would likely result in a material change in our operations and/or a material change in the value of the securities. Uncertainties in the enforcement of PRC laws and regulations may limit the legal protections available to us and our investors, materially and adversely affect our financial condition and results of operations, and cause our securities to significantly decline in value or become worthless. The Chinese government may intervene or influence the operations of our PRC subsidiaries and exercise significant oversight and discretion over the conduct of their business and may intervene in or influence their operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our securities. Further, any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. See “Risk Factors — Risks Related to Doing Business in China.”

Summary of Risk Factors

Investing in our Common Shares involves significant risks. Below is a summary of the principal legal and operational risks we face as an issuer based in or having the majority of the Company’s operations in China and the risks related to ownership of our Common Shares. These and other risks are discussed more fully in the section titled “Risk factors.”

Risks Related to Doing Business in China.

We are based in China and have the majority of our operations in China, and as a result, we face risks and uncertainties related to doing business in China. Such risks include, without limitation:

	·	Our business and results of operations may be affected by changes in China’s economic, political or social conditions or government policies.

	·	Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to us and our investors, and rules and regulations in China can change quickly with little advance notice. Such uncertainties could cause our Common Shares to significantly decline in value or become worthless.

	·	If the Chinese government determines that our corporate structure does not comply with Chinese laws and regulations, or if Chinese laws and regulations change or are interpreted differently in the future, Chinese regulatory authorities could disallow our current corporate structure, which would likely result in a material change in our operations and/or a material change in the value of the securities, including that it could cause the value of our securities to significantly decline or become worthless.

	·	The PRC government exerts substantial influence over the manner in which we may conduct our business and may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or cause the value of our securities to significantly decline or be worthless.

	·	We are required to file with the CSRC and may be subject to the approval of, filing or other procedures with other Chinese regulatory authorities in connection with securities offerings under PRC law, and we cannot predict whether we will be able, or how long it will take us, to obtain such approval or complete such filing or other procedures in our securities offerings.

	·	Recent regulatory developments in China, including greater oversight and discretion over privacy and data security, may subject us to additional regulatory review, and any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

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	·	Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act, 2023, and related regulations if the PCAOB determines that it cannot inspect or investigate completely our auditors for two consecutive years and as a result, Nasdaq may determine to delist our Common Shares.

	·	We are a holding company and may rely for funding on dividend payments from our subsidiaries, which are subject to restrictions under PRC laws.

	·	PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds from the offerings of any securities to make loans or additional capital contributions to our PRC operating subsidiaries.

	·	PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penalties and limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’s ability to distribute profits to us, or otherwise adversely affect us.

	·	Chinese economic downturn or growth slowdown may harm our business.

	·	U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.

	·	Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.

	·	We may be subject to a significant withholding tax should equity transfers by our non-resident enterprises be determined to have been done without a reasonable business purpose.

	·	We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.

	·	Governmental control of currency conversion may affect the value of our investors’ investment.

	·	Fluctuations in exchange rates could adversely affect our business and the value of our securities.

	·	If we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations and our reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.

	·	Our business may be materially and adversely affected if any of our PRC subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding.

	·	Labor laws in the PRC may adversely affect our results of operations.

	·	Imposition of trade barriers and taxes may reduce our ability to do business internationally, and the resulting loss of revenue could harm our profitability.

Risks Related to Ownership of Our Common Shares

	·	We may be unable to regain compliance with the applicable continued listing requirements of the Nasdaq Capital Market and as a result, our Common Shares could be delisted from Nasdaq, which may cause the price of our securities to decline and adversely impact our ability to raise capital.

	·	The market price of our Common Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the price you paid.

	·	We do not intend to pay dividends for the foreseeable future.

	·	If we continue to be unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Shares may decline.

	·	We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.

	·	U.S. tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. shareholders.

	·	We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

	·	We are subject to liability risks stemming from our foreign status, which could make it more difficult for investors to sue or enforce judgments against our company.

	·	We incur significant costs as a result of being a public company.

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Permissions Required from the PRC Authorities for Our Operations

We conduct a substantial portion of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. We are required to obtain certain permissions from the PRC authorities to operate, issue securities to foreign investors, and transfer certain data. The PRC government has exercised, and may continue to exercise, substantial influence or control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be undermined if our PRC subsidiaries are not able to obtain or maintain approvals to operate in China. The central or local governments could impose new, stricter regulations or interpretations of existing regulations that could require additional expenditures, and efforts on our part to ensure our compliance with such regulations or interpretations. To operate our general business activities currently conducted in mainland China, each of our PRC subsidiaries is required to obtain a business license from the local counterpart of the State Administration for Market Regulation, or SAMR. Each of our PRC subsidiaries has obtained a valid business license from the local SAMR, and no application for any such license has been denied. Our PRC subsidiaries are also required to obtain certain licenses and permits, including the Wood and Bamboo Operation and Processing Approval Certificate issued by Zhejiang provincial government for our consumer product segment and before May 2025, our electric vehicles (EVs) and fuel vehicles being listed in the Announcement of the Vehicle Manufacturers and Products issued by the Ministry of Industry and Information Technology of PRC, or the MIIT, which was the entry approval for Shangchi Automobile to become a qualified manufacturer of vehicles and for the manufacturing and sales of our EVs and other vehicles. As of the date of this report, as advised by our PRC legal counsel, Guantao Law Firm, we and our PRC subsidiaries have received all requisite permits, approvals and certificates from the PRC government authorities to conduct our business operations in China. To our knowledge, no permission or approval has been denied or revoked. However, given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by government authorities, we cannot be certain that relevant policies in this regard will not change in the future, which may require us or our subsidiaries to obtain additional licenses, permits, filings or approvals for conducting our business in the PRC. If we or our subsidiaries do not receive or maintain required permissions or approvals, or inadvertently conclude that such permissions or approvals are not required, we may be subject to governmental investigations or enforcement actions, fines, penalties, suspension of operations, or be prohibited from engaging in relevant business or conducting securities offering, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

In connection with our previous issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we and our PRC subsidiaries, (i) are not required to obtain permissions from the China Securities Regulatory Commission, or the CSRC, (ii) are not required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, and (iii) have not received or were denied such requisite permissions by any PRC authority. However, the PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.

On February 17, 2023, with the approval of the State Council, China Securities Regulatory Commission (the “CSRC”) issued the relevant system and rules for the management of overseas listing records, which will be implemented from March 31, 2023. A total of six institutional rules (the “Listing Records Rules”) have been issued this time, including the Trial Measures for the Administration of Overseas Issuance and Listing of Securities by Domestic Enterprises (hereinafter referred to as the “Trial Measures”) and five supporting guidelines. Under the Listing Records Rules, a company established in mainland China seeking securities offering and listing, by both direct or indirect means, in an overseas market is required to undertake filing procedures with the CSRC for its overseas offering and listing activities. The Trial Measures also set forth a list of circumstance under which overseas offering and listing by domestic companies established in mainland China is prohibit, including: (i) where such securities offering and listing is explicitly prohibited by the PRC laws; (ii) where the intended securities offering and listing may endanger national security as reviewed and determined by competent PRC authorities under the State Council in accordance with PRC laws; (iii) where the domestic company established in mainland China, or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three (3) years; (iv) where the domestic company established in mainland China seeking securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; and (v) where there are material ownership disputes over equity held by the controlling shareholder of the company established in mainland China or by other shareholders that are controlled by the controlling shareholder and/or actual controller. In accordance with the Trial Measures, the listing and trading of our Common Shares on Nasdaq is deemed as an indirect overseas offering and listing by domestic companies established in mainland China, and thus, we are subject to the Listing Records Rules and the relevant filing procedures as required. Further, we believe, as of the date of this annual report, none of the circumstances prohibiting the overseas offering and listing by domestic companies established in mainland China as listed above applies to us, and we can offer and continue to offer our Common Shares on Nasdaq.

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In accordance with the Notice on the Arrangement for the Filing of Overseas Offering and Listing by Domestic Companies issued by the CSRC along with the Listing Records Rules on the same day, we are deemed as an “Existing Issuer” because we have been listed overseas before March 31, 2023. Under such Notice, we are not required to undertake the initial filing procedure immediately. However, we shall carry out filing procedures as required in a timely manner for the subsequent events, including any further follow-up offerings on Nasdaq, dual and/or secondary offering and listing on different overseas markets, and occurrence of material events including change of control, investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities, change of listing status or transfer of listing segment, and voluntary or mandatory delisting. If we or our Mainland China Subsidiaries in future fail to undertake filing procedures as stipulated in the Trial Measures, or offer and list securities in an overseas market in violation of the Trial Measures, the CSRC may order rectification, issue warnings to us and/or our Mainland China Subsidiaries, and impose a fine of between RMB 1,000,000 yuan and RMB10,000,000 yuan. The CSRC may also inform its regulatory counterparts in the overseas jurisdictions, such as the SEC, via cross-border securities regulatory cooperation mechanisms.

Further, on February 24, 2023, the CSRC, together with Ministry of Finance, National Administration of State Secrets Protection, and National Archives Administration of China, released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the “Confidentiality Provisions”), which will come into effect on March 31, 2023 with the Trial Measures. Under the Confidentiality Provisions, domestic companies established in mainland China seeking overseas offering and listing, by both direct and indirect means, are required to institute a sound confidentiality and archives system. If such domestic companies established in mainland China intend to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, they shall obtain approval from competent authorities and complete the relevant filing procedure with the competent secrecy administrative department prior to their disclosure or provision of such documents and materials. Further, if they provide or publicly disclose documents and materials which may adversely affect national security or public interests, they shall strictly follow the corresponding procedures in accordance with relevant laws and regulations. Once effective, any failure or perceived failure by us or our subsidiaries to comply with the above confidentiality and archives administration requirements under the Confidentiality Provisions and other relevant PRC laws and regulations may cause relevant entities to be held legally liable by competent authorities and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. As of the date of this annual report, we believe that we and our subsidiaries have not provided or publicly disclosed any documents or materials involving state secrets or work secrets of PRC government agencies or any of which may adversely affect national security or public interests, to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. We intend to strictly comply with the Confidentiality Provisions and other relevant PRC laws and regulations in our offering and listing on Nasdaq in future.

However, any failure of us or our mainland China subsidiaries to fully comply with the Listing Records Rules and/or the Confidentiality Provisions, once effective, may significantly limit or completely hinder our ability to offer or continue to offer our Common Shares on Nasdaq, cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause our Common Shares to significantly decline in value or become worthless.

On July 10, 2021, the CAC published a revised draft revision to the Cybersecurity Review Measures for public comment, or the Revised Cybersecurity Measures. Under these measures, an operator having more than one million users shall be subject to cybersecurity review before listing abroad. The cybersecurity review will evaluate the risk of critical information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled or maliciously used by foreign governments after going public overseas. The procurement of network products and services, data processing activities and overseas listing should also be subject to cybersecurity review if they concern or potentially pose risks to national security. According to the effective Cybersecurity Review Measures, online platform/website operators of certain industries may be identified as critical information infrastructure operators by the CAC, once they meet standard as stated in the National Cybersecurity Inspection Operation Guide, and such operators may be subject to cybersecurity review. On December 28, 2021, the CAC, the National Development and Reform Commission (“NDRC”), and other government agencies jointly issued the final version of the Revised Measures for Cybersecurity Review, or the Measures, which took effect on February 15, 2022 and replaced the previously issued Revised Cybersecurity Review Measures. Under the Measures, an “online platform operator” in possession of personal data of more than one million users must apply for a cybersecurity review if it intends to list its securities on a foreign stock exchange. The operators of critical information infrastructure and the online platform operators (collectively, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, and any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country. Pursuant to the Measures, we believe we are not subject to the cybersecurity review by the CAC, given that (i) we possess personal information of a relatively small number of users in our business operations as of the date of this report, significantly less than one million users; and (ii) data processed in our business does not have a bearing on national security and thus shall not be classified as core or important data by the PRC authorities. We don’t believe that we are an Operator within the meaning of the Measures, nor do we control more than one million users’ personal information, and as such, we should not be required to apply for a cybersecurity review under the Revised Measures. Further, an expert interpretation of the Measures published at the CAC’s website on February 17, 2022 indicated no application review is required for operators that have been listed abroad before the implementation of the Revised Cybersecurity Measures. However, the Measures were just recently released and there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation. For example, certain terms used in the Measures are not defined and require further clarification on their meaning. Whether the data processing activities carried out by traditional enterprises (such as food, medicine, manufacturing, and merchandise sales enterprises) are subject to such review and the scope of the review remain to be further clarified by the regulatory authorities in the subsequent implementation process.

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The PRC government recently initiated a series of regulatory actions and statements to regulate business operations in China, including adopting new measures to extend the scope of cybersecurity reviews, cracking down on illegal activities in the securities market, and expanding the efforts in anti-monopoly enforcement. The PRC government is increasingly focused on data security. In July 2021, the CAC opened cybersecurity probes into several U.S.-listed technology companies focusing on anti-monopoly regulation, and how companies collect, store, process and transfer data. On November 14, 2021, the CAC published the Draft Regulations on Network Data Security Management in November 2021 for public comments, which among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the following year. If the Draft Regulations on Network Data Security Management are enacted in the current form, we, as an overseas listed company, would be required to carry out an annual data security review and comply with the relevant reporting obligations. As of the date of this report, the draft regulations have been released for public comment only and have not been formally adopted. The final provisions and the timeline for its adoption are subject to changes and uncertainties. We have been closely monitoring the regulatory development in China, particularly regarding the requirements of approvals, annual data security review or other procedures that may be imposed on us. If any approval, review or other procedure is in fact required, we cannot assure our investors that we will be able to obtain such approval or complete such review or other procedure timely or at all. For any approval that we may be able to obtain, it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and/or securities offerings. The PRC regulatory requirements with respect to cybersecurity and data security are constantly evolving and can be subject to varying interpretations and significant changes, resulting in uncertainties about the scope of our responsibilities in that regard. Failure to comply with these cybersecurity and data privacy requirements in a timely manner, or at all, may subject us to government enforcement actions and investigations, fines, penalties, suspension or disruption of our operations.

Because we are relying on advice of our PRC counsel with regard to PRC laws, there is uncertainty inherent in relying on an opinion of counsel in connection with whether we are required to obtain permissions from a governmental agency that is required to approve of our operations and/or listings. In the event that an government approval is required, we cannot assure our investor that we will be able to receive clearance in a timely manner, or at all. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to offer or continue to offer our Common Shares, cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause our shares to significantly decline in value or become worthless.

For more detailed information, see “Item 3. Key Information-D. Risk Factors - Risks Relating to Doing Business in China.”

The Holding Foreign Companies Accountable Act (“HFCAA”)

Our Common Shares may be prohibited from trading on a national exchange or “over-the-counter” markets under the HFCAA if the Public Company Accounting Oversight Board of the United States (“PCAOB”) determines it is unable to inspect or investigate completely our auditors for two consecutive years. Pursuant to the HFCAA enacted in December 2020 and related legislation, if the SEC determines that a company has filed an audit report issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years, the SEC is required to prohibit such company’s securities from being traded on a national securities exchange or in the over the counter trading market in the U.S.

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Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of Protocol (the “Protocol”), governing inspections and investigations of audit firms based in China and Hong Kong. On December 15, 2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and vacated its previous Determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination.

Our current auditor, YCM CPA INC., headquartered in Irvine, California, is a firm registered with the PCAOB and is required by the laws of the U.S. to undergo regular inspections by the PCAOB to assess its compliance with the laws of the U.S. and professional standards. YCM CPA INC. has been subjected to PCAOB inspections and is not among the PCAOB-registered public accounting firms headquartered in the PRC or Hong Kong that are subject to PCAOB’s determination. Notwithstanding the foregoing, in the future, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, or if there is any regulatory change or step taken by PRC regulators that does not permit our auditors to provide audit documentations to the PCAOB for inspection or investigation, or the PCAOB expands the scope of the Determination so that we are subject to the HFCAA, as the same may be amended, you may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are completely inspected or investigated by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate, which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities, including trading on the national exchange or “over-the-counter” markets, may be prohibited under the HFCAA.

Cash Flows through Our Organization

As a holding company, we may rely upon dividends paid to us by our subsidiaries in the PRC to pay dividends and to finance any debt we may incur. As of the date of this report, none of our subsidiaries has issued any dividends or distributions to us and we have not made any dividends or distributions to our shareholders. Our subsidiaries in the PRC generate and retain cash generated from operating activities and re-invest it in our business.

Under BVI law, we may pay may only pay dividends from surplus (the excess, if any, at the time of the determination of the total assets of our company over the sum of our liabilities, as shown in our books of account, plus our capital), and we must be solvent before and after the dividend payment so that we will be able to satisfy our liabilities as they become due in the ordinary course of business; and the realizable value of assets of our company will not be less than the sum of our total liabilities, other than deferred taxes as shown on our books of account, and our capital. If we determine to pay dividends, as a holding company, we will be dependent on receipt of funds from our subsidiaries in PRC through our Hong Kong subsidiaries.

Current PRC regulations permit our subsidiary in mainland China to pay dividends to the Company only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Under our current corporate structure, we rely on dividend payments or other distributions from our subsidiaries to fund any cash and financing requirements we may have, including the funds necessary to pay dividends and other cash distributions to our shareholders or to service any debt we may incur. If any subsidiary incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to us. In addition, under PRC laws and regulations, each of our Chinese subsidiaries is required to set aside a portion of their net income each year to fund a statutory surplus reserve until such reserve reaches 50% of its registered capital. This reserve is not distributable as dividends. As a result, our PRC subsidiaries are restricted in their ability to transfer a portion of its net assets to us in the form of dividends, loans or advances. Further, the PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. If we are unable to receive funds from our subsidiaries, we may be unable to pay cash dividends on our Common Shares.

Cash dividends, if any, on our Common Shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10%. A 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises. Any gain realized on the transfer of Common Shares by such investors is also subject to PRC tax at a current rate of 10% which in the case of dividends will be withheld at source if such gain is regarded as income derived from sources within the PRC.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC resident enterprise. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong resident enterprise must be the beneficial owner of the relevant dividends; and (b) the Hong Kong resident enterprise must directly hold no less than 25% share ownership in a PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot be certain that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiaries to our Hong Kong subsidiaries. As of the date of this report, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Our Hong Kong subsidiaries intend to apply for the tax resident certificate when our subsidiaries in mainland China plan to declare and pay dividends to their Hong Kong parent companies.

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As an offshore holding company, we will be permitted under PRC laws and regulations to provide funding from the proceeds of our offshore fund-raising activities to our subsidiaries in China only through loans or capital contributions, subject to the satisfaction of the applicable government registration and approval requirements. Before providing loans to our PRC subsidiaries, we will be required to make filings about details of the loans with the State Administration of Foreign Exchange of the PRC (the “SAFE”) in accordance with relevant PRC laws and regulations. Our PRC subsidiaries that receive the loans are only allowed to use the loans for the purposes set forth in these laws and regulations. Under regulations of the SAFE, Renminbi is not convertible into foreign currencies for capital account items, such as loans, repatriation of investments and investments outside of China, unless the prior approval of the SAFE is obtained and prior registration with the SAFE is made. In addition, in accordance with the Notice on the Arrangement for the Filing of Overseas Offering and Listing by Domestic Companies issued by the CSRC along with the Listing Records Rules on the same day, we are deemed as an “Existing Issuer” because we have been listed overseas before March 31, 2023. Under such Notice, we are not required to undertake the initial filing procedure immediately. However, we shall carry out filing procedures as required in a timely manner for the subsequent events, including any further follow-up offerings on Nasdaq, dual and/or secondary offering and listing on different overseas markets, and occurrence of material events including change of control, investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities, change of listing status or transfer of listing segment, and voluntary or mandatory delisting. If we or our mainland China subsidiaries in the future fail to undertake filing procedures as stipulated in the Trial Measures or offer and list securities in an overseas market in violation of the Trial Measures, the CSRC may order rectification, issue warnings to us and/or our mainland China subsidiaries, and impose a fine of between RMB1,000,000 yuan and RMB10,000,000 yuan. The CSRC may also inform its regulatory counterparts in the overseas jurisdictions, such as the SEC, via cross-border securities regulatory cooperation mechanisms.

Under PRC law, we may provide funding to our PRC subsidiaries only through capital contributions or loans, and prior to the dismantling of our PRC consolidated affiliated entities only through loans to our former consolidated affiliated entities, subject to satisfaction of applicable government registration and approval requirements.

For the year ended December 31, 2023, the Company provided working capital loans of $5.9 million in aggregate to our wholly owned subsidiary, Tantech Bamboo Charcoal Co., Ltd.; $890,000 in aggregate to our wholly owned subsidiary, EPakia Inc., and $30,000 in aggregate to our wholly owned subsidiary, EPakia Canada Inc.

For the year ended December 31, 2024, the Company provided working capital loans of $7.3 million in aggregate to our wholly owned subsidiary, EPakia Inc.

For the year ended December 31, 2025, the Company provided working capital loans of $3.4 million in aggregate to our wholly owned subsidiary, EPakia Inc.

We have not declared or paid any cash dividends, nor do we have any present plan to pay any cash dividends on our Common Shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

As of the date of this report, we do not anticipate any material difficulties on our ability to transfer cash between subsidiaries. We have not installed any cash management policies that dictate the amount of such funds and how such funds are transferred.

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A. Selected financial data.

In the table below, we provide you with historical selected financial data for the fiscal years ended December 31, 2025, 2024 and 2023. The information is derived from our consolidated financial statements included elsewhere in this annual report and previous annual report filed. Historical results are not necessarily indicative of the results that may be expected for any future period. When you read this historical selected financial data, it is important that you read it along with the historical financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” included elsewhere in this annual report. Our audited consolidated financial statements are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America, or U.S. GAAP.

(All amounts in thousands of U.S. dollars, except share and per share data)

Statement of operations data:

	For the year ended December 31,
	2025			2024			2023
Revenues	$	38,359		$	42,940		$	44,631
Gross profit		7,141			8,943			9,717
Operating expenses		19,347			4,959			6,058
(Loss) income from operations		(12,206	)		3,984			3,659
(Loss) income before income tax		(33,505	)		624			9,267
Income tax provision		(2,524	)		3,111			2,364
Net (loss) income from continuing operations		(30,981	)		(2,487	)		6,903
Net loss from discontinued operations		(61	)		(1,079	)		(1,885	)
Net (loss) income		(31,042	)		(3,566	)		5,018
Net loss attributable to the non-controlling interest		(18	)		(324	)		(565	)
Net (loss) income attributable to common stockholders of Tantech Holdings Ltd	$	(31,424	)	$	(3,242	)	$	5,583
(Loss) earnings per share- Basic and diluted	$	(13.64	)	$	(7.66	)	$	80.69

Balance sheet data:

	As of December 31,
	2025		2024		2023
Working capital	$	62,764	$	106,047	$	98,063
Current assets		73,991		117,803		115,671
Total assets		123,975		142,952		141,687
Current liabilities		11,227		11,756		17,608
Total liabilities		2,398		14,676		18,682
Total equity		110,350	$	128,276	$	123,005

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Selected Consolidated Financial Schedule

	For the year ended December 31, 2025
	Tantech			Non-PRC			PRC					Consolidated
	Holding			Subsidiaries			Subsidiaries			Eliminations		Total
Revenues	$	-		$	2,569		$	35,790		$	-	$	38,359
Income for equity method investment	$	(30,130	)	$	-		$	-		$	30,130	$	-
Net loss	$	(31,023	)	$	(695	)	$	(29,454	)	$	30,130	$	(31,042	)
Comprehensive income loss	$	(29,256	)	$	(695	)	$	(30,812	)	$	31,488	$	(29,275	)

	For the year ended December 31, 2024
	Tantech			Non-PRC			PRC					Consolidated
	Holding			Subsidiaries			Subsidiaries		Eliminations			Total
Revenues	$	-		$	707		$	42,233	$	-		$	42,940
Income for equity method investment	$	5,378		$	-		$	-	$	(5,378	)	$	-
Net loss	$	(3,242	)	$	(946	)	$	5,994	$	(5,372	)	$	(3,566	)
Comprehensive income loss	$	(3,160	)	$	(946	)	$	6,686	$	(6,059	)	$	(3,479	)

	For the year ended December 31, 2023
	Tantech		Non-PRC			PRC					Consolidated
	Holding		Subsidiaries			Subsidiaries		Eliminations			Total
Revenues	$	-	$	1,583		$	43,485	$	(437	)	$	44,631
Income for equity method investment	$	6,677	$	-		$	-	$	(6,677	)	$	-
Net income	$	5,583	$	(834	)	$	6,931	$	(6,662	)	$	5,018
Comprehensive income	$	1,361	$	(834	)	$	4,965	$	(4,694	)	$	798

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	As of December 31, 2025
	Tantech		Non-PRC			PRC					Consolidated
	Holding		Subsidiaries			Subsidiaries		Eliminations			Total
Cash and restricted cash	$	46	$	70		$	32,948	$	-		$	33,064
Total current assets	$	76,231	$	3,760		$	70,184	$	(76,184	)	$	73,991
Investments in subsidiaries	$	43,583	$	-		$	-	$	(43,583	)	$	-
Total non-current assets	$	43,583	$	49		$	49,935	$	(43,583	)	$	49,984
Total assets	$	119,814	$	3,809		$	120,119	$	(119,767	)	$	123,975
Total liabilities	$	9,465	$	9,293		$	67,802	$	(72,935	)	$	13,625
Total equity	$	110,349	$	(5,484	)	$	52,317	$	(46,832	)	$	110,350
Total liabilities and equity	$	119,814	$	3,809		$	120,119	$	(119,767	)	$	123,975

	As of December 31, 2024
	Tantech		Non-PRC			PRC					Consolidated
	Holding		Subsidiaries			Subsidiaries		Eliminations			Total
Cash and restricted cash	$	46	$	158		$	34,987	$	-		$	35,191
Total current assets	$	70,694	$	2,337		$	115,405	$	(70,633	)	$	117,803
Investments in subsidiaries	$	65,446	$	-		$	-	$	(65,446	)	$	-
Total non-current assets	$	65,446	$	61		$	25,088	$	(65,446	)	$	25,149
Total assets	$	136,140	$	2,398		$	140,493	$	(136,079	)	$	142,952
Total liabilities	$	4,832	$	7,187		$	66,916	$	(64,259	)	$	14,676
Total equity	$	131,308	$	(4,789	)	$	73,577	$	(71,820	)	$	128,276
Total liabilities and equity	$	136,140	$	2,398		$	140,493	$	(136,079	)	$	142,952

	For the year ended December 31, 2025
	Tantech			Non-PRC			PRC						Consolidated
	Holding			Subsidiaries			Subsidiaries			Eliminations			Total
Net cash provided by (used in) operating activities	$	(2,929	)	$	(3,301	)	$	414		$	-		$	(5,816	)
Net cash provided by (used in) investing activities	$	(3,443	)	$	(530	)	$	(546	)	$	3,443		$	(1,076	)
Net cash provided by (used in) financing activities	$	6,372		$	3,743		$	(3,247	)	$	(3,443	)	$	3,425

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	For the year ended December 31, 2024
	Tantech			Non-PRC			PRC						Consolidated
	Holding			Subsidiaries			Subsidiaries			Eliminations			Total
Net cash provided by (used in) operating activities	$	873		$	(5,485	)	$	9,975		$	-		$	5,363
Net cash provided by (used in) investing activities	$	(7,299	)	$	(1,441	)	$	(1,859	)	$	7,299		$	(3,300	)
Net cash provided by (used in) financing activities	$	6,463		$	7,081		$	(2,776	)	$	(7,299	)	$	3,469

	For the year ended December 31, 2023
	Tantech			Non-PRC			PRC						Consolidated
	Holding			Subsidiaries			Subsidiaries			Eliminations			Total
Net cash provided by (used in) operating activities	$	(1,027	)	$	(1,053	)	$	7,340		$	-		$	5,260
Net cash provided by (used in) investing activities	$	(6,820	)	$	-		$	(2,575	)	$	6,820		$	(2,575	)
Net cash provided by (used in) financing activities	$	7,824		$	1,023		$	5,403		$	(6,820	)	$	7,430

B. Capitalization and indebtedness.

Not applicable for annual reports on Form 20-F.

C. Reasons for the offer and use of proceeds.

Not applicable for annual reports on Form 20-F.

D. Risk factors.

Risks Related to Our Business and Industry

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A weakening of the Chinese economy could hurt demand for our Charcoal Doctor products.

Our Charcoal Doctor products are generally considered “household use and decorative items,” meaning that these products are used for beautification and decoration purposes in addition to purification purposes. For example, consumers tend to purchase charcoal products for their value in absorbing odors and tend to purchase some of our bamboo charcoal products for these purposes and also for the perceived attractiveness of our products. We seek to design bamboo charcoal products that our customers want to display throughout their homes. As such, we have relied on consumer spending to drive sales in this product line. Since 2010, China’s GDP growth rate has slowed from more than 10% to 5% in 2025. If China’s economy slows, or if customer spending for household items decreases, demand for our charcoal products may be reduced, which would negatively affect sales of our Charcoal Doctor products.

If we are unable to develop products that meet the demands of our customers, sales of our products could decrease.

As a company that focuses primarily on consumer products in our Charcoal Doctor line of products, we rely on our ability to predict the needs and desires of customers several months before fulfilling orders for distributors. If we are unable to accurately forecast our customers’ preferences, we may lose market share to our competitors.

Our two largest competitors are significantly larger than our company.

Although our company is one of the largest providers of bamboo charcoal-based products of their kind, we compete with companies that make products that have equivalent function but that are not bamboo charcoal-based, and some of these competitors are much larger than we are. Charcoal Doctor’s two largest competitors are Guangzhou Blue Moon Industry Co., Ltd, which makes Blue Moon branded products (“Blue Moon”), and Shanghai SC Johnson Wax Co., Ltd, which makes Mr. Muscle branded products (“Mr. Muscle”). Blue Moon and Mr. Muscle are substantially larger than Charcoal Doctor. We believe that they have a much greater customer recognition level than Charcoal Doctor. Charcoal Doctor has not historically spent substantial resources on television or print advertising. As a result, we expect that such competitors are likely to continue efforts to improve their brand recognition, while we may be unable to do so without changing our business plan to increase spending on such advertisements.

As a charcoal-based provider of household products, we are subject to supply risks that some of our competitors do not face.

Some of our largest competitors in the provision of household products such as our bamboo vinegar products rely on chemical solutions, rather than charcoal and derivatives of charcoal, to create their products. As a result, we do not believe they are subject to business risk in the event bamboo or wood charcoal supplies are compromised. On the other hand, if we were unable to procure bamboo or wood charcoal products or unable to procure them on attractive terms, our product line could become substantially more expensive or our growth rate could be limited, resulting in us becoming less competitive than others in our industry.

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In summer 2012, we faced a supply shortage based on local government initiatives to reduce the risk of fire caused by charcoal. As a result, the local government in Daxing Anlin, where one of our main suppliers of wood-based OEM BBQ charcoal is located, restricted the production of charcoal during June, July and August 2012. At that time, our stock of OEM BBQ charcoal was insufficient to avoid demand pressures. As a result, our revenues declined during this period. If local governments similarly reduce production of charcoal in the future, we could be negatively impacted by the lack of supply, either as to our ability to obtain suitable product or by our ability to obtain such product at a reasonable price.

Our suppliers’ bamboo is subject to risks related to fire, flooding, disease and pests.

While bamboo is considered a relatively hardy plant, it remains a plant that can be burned in fires or damaged by prolonged flooding or exposure to diseases, fungus and pests. If our suppliers’ bamboo resources were affected by such natural risks, it could be more difficult or expensive to source the bamboo charcoal for our products.

Increases in bamboo charcoal costs may negatively affect our operating results.

While bamboo is a renewable resource (and thus bamboo products like bamboo charcoal may be considered renewable), the price of raw materials may be inelastic when we wish to purchase supplies. While we have attempted to mitigate this risk by taking advantage of decreases in other expenses (due to better transportation infrastructure reducing the cost of bringing materials to our company and from our company to our customers) and improving efficiency, we cannot guarantee that we will be able to control our material expenses. In addition, as we are competing based upon low price, we will risk losing customers by increasing our selling prices. To the extent our expenses increase beyond the price we can charge our customers, our operating results could be harmed.

We face competition from smaller competitors that may be able to provide similar charcoal briquette products at lower prices.

Our charcoal briquette products are valued primarily for their ability to burn and create heat. As result, our competitors in this line of business do not require the same high technology as our competitors for our Charcoal Doctor products. For this reason, our charcoal briquette business is subject to competition from a variety of small producers, which may be able to provide similar product for a much lower price. To the extent our customers discriminate based on price, we may find that we lose market share to such producers. Moreover, we may be required to reduce our price in order to maintain or slow loss of market share for such products. As charcoal briquette products make up a substantial percentage of revenues, even at a lower profit margin, the reduction of sales of such products could hurt our company.

We face risks related to health epidemics that could impact our sales and operating results.

Our business could be adversely affected by the effects of a widespread outbreak of contagious disease. Any outbreak of contagious diseases, and other adverse public health developments, particularly in China, could have a material and adverse effect on our business operations. These could include disruptions or restrictions on our ability to produce our products, as well as temporary closures of our facilities or the facilities of our customers and third-party service providers. Any disruption or delay of our customers or third-party service providers would likely impact our operating results and the ability of the Company to continue as a going concern. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of China and many other countries, resulting in an economic downturn that could affect demand for our services and significantly impact our operating results.

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Compliance with environmental regulations can be expensive, and noncompliance with these regulations may result in adverse publicity and potentially significant monetary damages and fines.

Our various business operations generate noise, waste water, gaseous byproduct and other industrial waste. We are required to comply with all national and local regulations regarding the protection of the environment. We are in compliance with current environmental protection requirements and have all necessary environmental permits to conduct our business. However, if more stringent regulations are adopted in the future, the costs of compliance with these new regulations could be substantial. Additionally, if we fail to comply with present or future environmental regulations, we may be required to pay substantial fines, suspend production or cease operations. Any failure by us to control the use of, or to adequately restrict the unauthorized discharge of, hazardous substances could subject us to potentially significant monetary damages and fines or suspensions to our business operations. Certain laws, ordinances and regulations could limit our ability to develop, use, or sell our products.

If we are unable to keep up with advances in industry technology, we may suffer a decline in our competitive position.

We may be unable to keep up with changes in industry technology and may suffer a resulting decline in our competitive position. Any failure to keep up with advances in technology would result in a decline in our competitive position which would materially and adversely affect our business, prospects, operating results and financial condition. Our research and development efforts may not be sufficient to adapt to changes in technology. As technologies change, we plan to upgrade or adapt the existing products and introduce new products in order to continue to provide our products with the latest technology. However, our products may not compete effectively with that of our competitors if we are not able to integrate the latest technology into our products.

If our expansions into new lines of business are not successful, our future results of operations and growth prospects may be materially and adversely affected.

Starting in 2022, our PRC subsidiaries expanded into new lines of business — biodegradable packaging business and commercial factoring service. Biodegradable packaging is designed to break down naturally in the environment, without leaving behind harmful pollutants or waste. We offer commercial factoring services to customers seeking financings by leveraging their receivables. While we generated nonsignificant revenues from biodegradable packaging business in the 2024 and 2023 fiscal years and earned financing interest income from commercial factoring services for the three prior fiscal years, the uncertainties and costs involved, the operations in these product lines have slowed down or halted in 2025.

In 2025, our U.S. subsidiaries commenced operations in the construction material wholesale and trading business. We face competitions from the existing product and service providers in the industry. If we cannot successfully address new challenges and compete effectively against our competitors, we may not be able to develop a sufficiently large customer base, recover costs incurred for our investment and achieve profitability from these businesses, and our future results of operations and growth prospects may be materially and adversely affected.

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We may require additional financing in the future and our operations could be curtailed if we are unable to obtain required additional financing when needed.

We may need to obtain additional debt or equity financing to fund future capital expenditures. While we do not anticipate seeking additional financing in the immediate future, any additional equity may result in dilution to the holders of our outstanding shares of capital stock. Additional debt financing may include conditions that would restrict our freedom to operate our business, such as conditions that:

	·	limit our ability to pay dividends or require us to seek consent for the payment of dividends;

	·	increase our vulnerability to general adverse economic and industry conditions;

	·	require us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund capital expenditures, working capital and other general corporate purposes; and

	·	limit our flexibility in planning for, or reacting to, changes in our business and our industry.

We cannot guarantee that we will be able to obtain any additional financing on terms that are acceptable to us, or at all.

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The loss of any of our key charcoal product customers could reduce our revenues and our profitability.

Our key charcoal product customers are principally third-party distributors in the PRC. For the year ended December 31, 2025, three major customers accounted for approximately 34%, 23% and 20% of the Company’s total sales, respectively. There can be no assurance that we will maintain or improve the relationships with these customers, or that we will be able to continue to supply these customers at current levels or at all. Any failure to pay by these customers could have a material negative effect on our company’s business. In addition, having a relatively small number of customers may cause our quarterly results to be inconsistent, depending upon when these customers pay for outstanding invoices.

If we cannot maintain long-term relationships with these major customers, the loss of our sales to them could have an adverse effect on our business, financial condition and results of operations.

We rely on third-party distributors for a substantial portion of our sales, which could affect our ability to efficiently and profitably distribute and market our products, maintain our existing markets and expand our business into other geographic markets.

Sales of our products through distributors constituted approximately 91%, 79% and 97% of our total sales in 2025, 2024 and 2023, respectively. To the extent our distributors are distracted from selling our products or do not expend sufficient efforts in managing and selling our products, our sales will be adversely affected. Our ability to maintain our distribution network and attract additional distributors will depend on a number of factors. Some of these factors include: (i) the level of demand for our brand and products in a particular market; (ii) our ability to maintain current distribution relationships or establish and maintain successful relationships with distributors in new geographic areas. These factors are partially outside our control because consumers ultimately determine what they purchase and we cannot control the actions of our distributors. Our inability to achieve any of these factors in a geographic distribution area will have a material adverse effect on our relationships with our third-party distributors in that particular geographic area, thus limiting our ability to maintain and expand our market, which will likely adversely affect our revenues and financial results.

We buy our supplies from a relatively limited number of suppliers, and disruption in supply may increase our production cost.

For the year ended December 31, 2025, three major suppliers accounted for approximately 48% of the Company’s total purchases. For the year ended December 31, 2024, two major suppliers accounted for approximately 56% of the Company’s total purchases. For the year ended December 31, 2023, three major suppliers accounted for approximately 70% of the Company’s total purchases.

The loss of any such suppliers could result in increased expenses for our company and result in adverse impact on our business, financial condition and results of operations.

Our PRC bank accounts are not insured or protected against loss.

We maintain most of our cash with various banks located in the PRC. Our cash accounts are not insured or otherwise protected. Should any bank or trust company holding our cash deposits become insolvent, or if we are otherwise unable to withdraw funds, we would lose the cash on deposit with that particular bank or trust company.

We are subject to risks relating to the banking facilities we use to overcome cash flow issues.

We generate a large proportion of our sales revenue through wholesale channels and distribution networks requiring us to extend net 90 days payment terms in most cases. These payment terms are difficult to negotiate given the significant bargaining power of the counterparties to the agreements. For this reason, we rely on banking facilities to overcome cash flow shortfalls between delivery and payment collection. Although we engage third-party debt collection agencies when required to manage counterparty risk, we cannot guarantee that we will receive payment in a timely fashion from our customers. To the extent we fail to receive payment in time to service our banking facilities, our business to be materially impacted.

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We are substantially dependent upon our senior management and key research and development personnel.

We are highly dependent on our senior management to manage our business and operations and our key research and development personnel for the development of new products and the enhancement of our existing products and technologies. In particular, we have relied on our CEO, CFO and former CEO, Mr. Wangfeng Yan, to manage our subsidiaries’ operations in China. Our senior management has been involved in the bamboo charcoal industry by working at our subsidiaries for over ten years. Due to their experiences in the industry in general and our company in particular, they would be difficult to replace.

While we provide the legally required personal insurance for the benefit of our employees, we do not maintain key man life insurance on any of our senior management or key personnel. The loss of any one of them would have a material adverse effect on our business and operations. Competition for senior management and our other key personnel is intense, and the pool of suitable candidates is limited. We may be unable to quickly locate a suitable replacement for any senior management or key personnel that we lose. In addition, if any member of our senior management or key personnel joins a competitor or forms a competing company, they may compete with us for customers, business partners and other key professionals and staff members of our company. Although each of our senior management and key personnel has signed a confidentiality and non-competition agreement in connection with his employment with us, we cannot assure you that we will be able to successfully enforce these provisions in the event of a dispute between us and any member of our senior management or key personnel.

We compete for qualified personnel with other technology companies and research institutions. Intense competition for these personnel could cause our compensation costs to increase, which could have a material adverse effect on our results of operations. Our future success and ability to grow our business will depend in part on the continued service of these individuals and our ability to identify, hire and retain additional qualified personnel. If we are unable to attract and retain qualified employees, we may be unable to meet our business and financial goals.

We are heavily dependent upon the services of experienced personnel who possess skills that are valuable in our industry, and we may have to actively compete for their services.

We are heavily dependent upon our ability to attract, retain and motivate skilled personnel to serve our customers. Many of our personnel possess skills that would be valuable to all companies engaged in our industry. Consequently, we expect that we will have to actively compete for these employees. Some of our competitors may be able to pay our employees more than we are able to pay to retain them. Our ability to profitably operate is substantially dependent upon our ability to locate, hire, train and retain our personnel. Moreover, our pool of available labor in Lishui is limited, as Lishui is a relatively small city in China. Accordingly, it may be difficult to recruit personnel to move to Lishui to work and to keep talented individuals from moving to other employers who recruit them. There can be no assurance that we will be able to retain our current personnel, or that we will be able to attract and assimilate other personnel in the future. If we are unable to effectively obtain and maintain skilled personnel, the development and quality of our services could be materially impaired.

Failure to manage our growth could strain our management, operational and other resources, which could materially and adversely affect our business and prospects.

Our growth strategy includes building our brand, increasing market penetration of our existing products, developing new products, increasing our targeting of the home respiratory market in China, and increasing our exports. Pursuing these strategies has resulted in, and will continue to result in, substantial demands on management resources. In particular, the management of our growth will require, among other things:

	·	continued enhancement of our research and development capabilities;

	·	information technology system enhancement;

	·	stringent cost controls and sufficient liquidity;

	·	strengthening of financial and management controls and information technology systems; and

	·	increased marketing, sales and support activities; and hiring and training of new personnel.

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If we are not able to manage our growth successfully, our business and prospects would be materially and adversely affected.

We have not yet implemented advanced logistical management techniques, which may hamper our efficiency and growth.

We have not yet implemented digital logistic management solutions and have not applied any advanced management techniques, such as enterprise resource planning or any structured logistical system and procedures, which may result in a loss of efficiency and require investment at a later stage. We have not yet committed to implement such systems and cannot guarantee that we will do so in the near future. To the extent we do not implement such techniques in a timely or efficient manner, we may be at a competitive disadvantage to those of our competitors who do.

Our business may be negatively affected by adverse publicity.

Failure or perceived failure by us to comply with legal, regulatory and compliance requirements could result in adverse publicity. In September 2015, we were subject to significant negative publicity resulting from reports published by a short seller of our shares. This negative publicity resulted in significant volatility in the trading price of our shares. Such adverse publicity could result in reputational harm, lead to increased regulatory supervision, affect our ability to attract and retain customers, affect our ability to attract and retain key personnel, affect our ability to maintain access to the capital markets, or have other material adverse effects on us in ways that are not predictable.

Our business may be negatively affected by low share prices in the stock market.

The trading price of our shares has been fluctuated over the past year. And we encountered an over 90% decline in market value since 2015. The continued decline in our share price could continue to harm investor confidence, affect our ability to retain existing investors, affect our ability to attract potential investors, affect our ability to maintain access to the capital market, or have other material adverse effects on us in ways that are not predictable.

We may be affected by disruptions to our production facilities.

Our production facilities are subject to breakdown or failure of equipment, power supplies or processes, performance below expected levels of output or efficiency, obsolescence, labor disputes, natural disasters and the need to comply with relevant regulatory and requirements. From time to time, we may need to carry out planned shutdowns of our production plants for routine maintenance, statutory inspections and testing and may need to shut down various plants for capacity expansions and equipment upgrades. Moreover, our production processes are continuously being modified and updated. As a result of manufacturing process updates and improvements, from time to time, we may experience shutdowns, and disruptions to the operations. The occurrence of any of the above events may cause us to stop or suspend our production operations and we may not be able to deliver the products to our customers on a timely basis, which would have an adverse impact on its business, financial position and profitability.

If we fail to protect our intellectual property rights, it could harm our business and competitive position.

We rely on a combination of patent, trademark and trade secret laws and non-disclosure agreements and other methods to protect our intellectual property rights. We currently hold six patents on charcoal products.

The process of seeking patent protection can be lengthy and expensive, our patent applications may fail to result in patents being issued, and our existing and future patents may be insufficient to provide us with meaningful protection or commercial advantage. Our patents and patent applications may also be challenged, invalidated or circumvented.

We also rely on trade secret rights to protect our business through non-disclosure provisions in employment agreements with employees. If our employees breach their non-disclosure obligations, we may not have adequate remedies in China, and our trade secrets may become known to our competitors.

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Implementation of PRC intellectual property-related laws has historically been lacking, primarily because of ambiguities in the PRC laws and enforcement difficulties, according to our PRC counsel, though China has paid more and more attention to the protection of intellectual property rights, it is still in early stage. Accordingly, intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other western countries. Furthermore, policing unauthorized use of proprietary technology is difficult and expensive, and we may need to resort to litigation to enforce or defend patents issued to us or to determine the enforceability, scope and validity of our proprietary rights or those of others. Such litigation and an adverse determination in any such litigation, if any, could result in substantial costs and diversion of resources and management attention, which could harm our business and competitive position.

We may be exposed to intellectual property infringement and other claims by third parties which, if successful, could disrupt our business and have a material adverse effect on our financial condition and results of operations.

Our success depends, in large part, on our ability to use and develop our technology and know-how without infringing third party intellectual property rights. If we sell our branded products internationally, and as litigation becomes more common in China, we face a higher risk of being the subject of claims for intellectual property infringement, invalidity or indemnification relating to other parties’ proprietary rights. Our current or potential competitors, many of which have substantial resources and have made substantial investments in competing technologies, may have or may obtain patents that will prevent, limit or interfere with our ability to make, use or sell our branded products in either China or other countries, including the United States and other countries in Asia. The validity and scope of claims relating to patents in our industry involve complex scientific, legal and factual questions and analysis and, as a result, may be highly uncertain. In addition, the defense of intellectual property suits, including patent infringement suits, and related legal and administrative proceedings can be both costly and time consuming and may significantly divert the efforts and resources of our technical and management personnel. Furthermore, an adverse determination in any such litigation or proceedings to which we may become a party could cause us to:

	·	pay damage awards;

	·	seek licenses from third parties;

	·	pay ongoing royalties;

	·	redesign our branded products; or

	·	be restricted by injunctions,

each of which could effectively prevent us from pursuing some or all of our business and result in our customers or potential customers deferring or limiting their purchase or use of our branded products, which could have a material adverse effect on our financial condition and results of operations.

We are dependent on our brand and trademarks.

We rely on our “Charcoal Doctor” brand in the marketing and distribution of a majority of our bamboo charcoal products. We believe that we have built significant goodwill in our brand in terms of the quality of products and services and it is widely recognized by the industry in the PRC. We consider our “Charcoal Doctor” brand to be vital in promoting product recognition and customer loyalty. Hence, if there are any major defects in our products or adverse publicity on our brand, the goodwill in our “Charcoal Doctor” brand will be adversely affected and our customers may lose confidence in our products. This will adversely affect our sales of charcoal products, hence affecting our business and financial performance.

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Our charcoal briquette products have relatively low technical requirements; therefore, barriers to entry are minimal.

We expect to face competition for our charcoal briquette products because competitors can create similar products at a relatively low cost because there are minimal barriers of entry. If competitors enter our market to create similar products, they may be able to do so for a much lower price. To the extent our customers discriminate based on price, we may find that we lose market share to such producers. Moreover, we may be required to reduce our price in order to maintain or slow loss of market share for such products. As charcoal briquette products make up a substantial percentage of our revenues, even at a lower profit margin, the reduction of sales of such products could hurt our company.

Risks Related to Doing Business in China

Our business and results of operations may be affected by changes in China’s economic, political or social conditions, or government policies.

Most of our business operations are conducted in China. Our business, results of operations, financial condition and prospects are subject to economic, political and legal developments in China. China’s economy has its unique characteristics in many respects, including with respect to government regulations and oversight, growth rate, regulation of foreign currency exchange, and allocation of resources. Any changes or developments in economic conditions in China, in the policies of the PRC government, or in the laws and regulations of China could have an adverse effect on the overall economic growth of China. In response to the global and regional economic slowdowns, the PRC government has adopted policy measures aimed at stimulating the economic growth in China, and the implementation of these measures may be adjusted from industry to industry or across different regions of the country. Any adverse developments in the overall economic growth or in the geographical markets in which we operate may result in a reduction in demand for our financing services or the commodities we trade. Such adverse changes could materially and adversely affect our business, financial condition and operating results.

Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to us and our investors, and rules and regulations in China can change quickly with little advance notice. Such uncertainties could cause our shares to significantly decline in value or become worthless.

We conduct a majority of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRC subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to wholly foreign-owned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.

Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection available to us. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, these regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us.

In addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or at all) that may change quickly with little advance notice or have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. It is especially difficult for us to accurately predict the potential impact on us of new legal requirements in mainland China because the Chinese legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value.

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Such uncertainties, including any inability to enforce our contracts, together with any development or interpretation of PRC law that is adverse to us, could materially and adversely affect our business and operations. Further, intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other more developed countries. We cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections available to us and our investors, including you. Such uncertainties could cause the value of such securities to significantly decline or be worthless.

If the Chinese government determines that our corporate structure does not comply with Chinese regulations, or if Chinese regulations change or are interpreted differently in the future, Chinese regulatory authorities could disallow our current operating structure, which would likely result in a material change in our operations and/or a material change in the value of our securities, including that it could cause the value of such securities to significantly decline or become worthless.

Our business in China, through the operations of our PRC subsidiaries, are governed by PRC law, including PRC foreign investment laws and regulations, among others. On January 1, 2020, the PRC Foreign Investment Law, or the Foreign Investment Law, and the Regulations for Implementation of the Foreign Investment Law of the People’s Republic of China, or the Implementation Regulations, came into effect and replaced the trio of prior laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. Historically, the principal regulation governing foreign ownership of businesses in the PRC was the Guidance Catalogue for Industrial Structure Adjustments (the “Catalogue”). The Catalogue classified various industries into three categories: encouraged, restricted and prohibited. The Catalogue has been replaced by the Special Administrative Measures (Negative List) for Foreign Investment Access (2018), effective July 28, 2018, and amended and restated by the 2024 version, effective November 1, 2024 (the “Negative List”). The Negative List specifies the prohibited and non-prohibited (similar to the restricted in the Guidance Catalogue) industries for foreign investment. For the industries not covered by the Negative List, the foreign investment and the domestic investment have equal access. Foreign investors may not invest in the prohibited industries specified by the Negative List. For the non-prohibited industries on the Negative List, a foreign investor must obtain an investment permit. There are certain requirements on the equity ownership and the executive officers of the foreign invested enterprises. If PRC has certain equity requirements in certain investment fields, no foreign-invested partnership may be established. Pursuant to these laws and regulations, we are permitted, through our subsidiaries, to engage in the manufacture and sales of our products. According to the Negative List, our charcoal products are not prohibited. Therefore, our portion of the foreign investment for these products may be up to 100%. However, we may not produce or operate those items which are on the Negative List. Further, we are not sure if the Negative List will change in a way that the foreign investment may be limited or prohibited in our business.

In addition, pursuant to the PRC M&A Rules, an offshore special purpose vehicle formed for listing purposes and controlled directly or indirectly by Chinese companies or individuals is required to obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange. However, the provisions of the M&A Rules remains unclear regarding the scope and applicability of the relevant approval requirement. There has not been any definitive rules or interpretations. Based on the current laws and regulations, our PRC counsel has advised us that the M&A Rules and related regulations do not require the Company or its PRC subsidiaries to obtain prior governmental approval for the listing and trading of the Company’s shares on an overseas securities market, given that our wholly foreign-owned subsidiaries were established by direct investment, rather than by a merger with or an acquisition of any PRC domestic companies as defined under the M&A Rules. However, there are substantial uncertainties as to how the M&A Rules are interpreted or implemented in the context of an overseas offering, and there can be no assurance that the PRC governmental agencies will ultimately take a view that is consistent with our PRC counsel’s opinion stated above.

If the PRC regulatory authorities were to find our legal structure and operations in the PRC to be in violation of any PRC laws, rules or regulations, we are uncertain what impact of PRC regulatory authorities’ actions would have on us and our subsidiaries and we may lose our right to operate in China through our investment and ownership in our PRC subsidiaries. If the Chinese government determines that our corporate structure does not comply with Chinese regulations, or if Chinese regulations change or are interpreted differently in the future, Chinese regulatory authorities could disallow our current operating structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless.

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The PRC government exerts substantial influence over the manner in which we may conduct our business and may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or cause the value of our securities to significantly decline or be worthless.

The Chinese government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations as the government deems appropriate to further regulatory, political and societal goals. The Chinese government has recently published new policies that significantly affected certain industries such as the education and internet industries. Recent statements made by the Chinese government have indicated an intent to increase the government’s oversight and control over offerings of companies with significant operations in mainland China that are to be conducted in foreign markets, as well as foreign investment in China-based issuers like us. Any future action by the Chinese government expanding the categories of industries and companies whose foreign securities offerings are subject to government review could significantly limit or completely hinder our ability to offer or continue to offer securities to investors or could disallow our current operating structure, which would likely result in a material change in our operations and/or a material change in the value of our securities, including causing the value of such securities to significantly decline or become worthless.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

Further, Chinese government continues to exert more oversight and discretion over Chinese technology firms. On July 2, 2021, Chinese cybersecurity regulator announced, that it had begun an investigation of Didi Global Inc. (NYSE: DIDI) and two days later ordered that the Company’s application be removed from smartphone application stores. On July 5, 2021, the Chinese cybersecurity regulator launched the same investigation on two other Internet platforms, China’s Full Truck Alliance of Full Truck Alliance Co. Ltd. (NYSE: YMM) and Boss of KANZHUN LIMITED (Nasdaq: BZ).

On February 17, 2023, the CSRC promulgated the Trial Measures and the relevant five guidelines, which took effect on March 31, 2023. Pursuant to the Trial Measures, PRC domestic companies that seek to offer or list securities in overseas markets, either in direct or indirect means, should fulfill the filing procedure with and report relevant information to the CSRC. If a domestic company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. If the issuer meets both of the following criteria, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; (ii) the main parts of the issuer’s operation activities are conducted in mainland China, or the principal operation premises are located in mainland China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or have habitual residences located in mainland China. The Trial Measures also set forth the circumstances under which an overseas offering and listing of securities of a domestic company is prohibited. The Trial Measures provide that (1) a domestic company that seeks to indirectly offer and list securities in overseas markets shall designate a major domestic operating entity, which shall, as the domestic responsible entity, fulfill the filing procedures with the CSRC; (2) an initial public offering and listing shall be filed with the CSRC within three business days after the relevant application is submitted overseas; (3) subsequent securities offerings of an issuer in the same overseas market where it has previously offered and listed securities shall be filed with the CSRC within three business days after the offering is completed; (4) subsequent securities offerings and listings of an issuer in overseas markets other than where it has offered and listed shall be filed pursuant to provisions as stipulated for initial public offerings and listings. Further, PRC domestic issuers that had already been listed on overseas securities markets on or prior to March 31, 2023 are deemed as existing issuers. Existing issuers are required to complete filing procedures within three working days after securities offerings and certain other events, including any follow-on offerings, dual and/or secondary offering and listing on different overseas markets, and occurrence of material events such as a change of control, investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities, change of listing status or transfer of listing segment, and voluntary or mandatory delisting. Pursuant to the Trial Measures, as an existing issuer, we are required to complete filing procedures with the CSRC in connection with our securities offerings and other prescribed events.

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In addition, pursuant to the Confidentiality and Archives Management Provisions, which were promulgated on February 24, 2023, and came into effect on March 31, 2023, PRC domestic enterprises seeking to offer securities and list in overseas markets, either directly or indirectly, shall establish and improve the system of confidentiality and archives work, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of state organs to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. It further stipulates that providing or publicly disclosing documents and materials which may adversely affect national security or public interests, and accounting records or photocopies thereof to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals shall be subject to corresponding procedures in accordance with relevant laws and regulations.

Under current PRC laws and regulations, as of the date of this report, as advised by our PRC legal counsel, we are required to file with the CSRC within 3 working days after completing a securities offering. Other than a CSRC filing, we are not required to obtain any approval or permission from, or be subject to other filing procedures with, any government agency for securities offerings. We have not been denied any requisite permissions by any PRC authority and have not received any inquiry, notice, warning or sanction from the CSRC, the CAC, or any other PRC authorities. However, given the uncertainties in the interpretation and enforcement of PRC laws and regulations, we cannot be certain that such laws and regulations will not change in the future, which may require us or our subsidiaries to obtain additional licenses, permits, filings or approvals from government authorities. If we or our subsidiaries do not receive or maintain required permissions or approvals, or inadvertently conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations change and we are required to obtain permissions or approvals from the CSRC or other governmental authorities in the future, we cannot assure our investors that we will be able to receive required permissions or approvals or complete required filing procedures in a timely manner or at all. If we fail to receive or maintain the required permissions or approvals or complete required filing procedures, we may be subject to governmental investigations or enforcement actions, fines, penalties, suspension of operations, or be prohibited from engaging in relevant business or conducting securities offering, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

We are required to file with the CSRC and may be subject to the approval of, filing or other procedures with other Chinese regulatory authorities in connection with securities offerings under PRC law, and we cannot predict whether we will be able, or how long it will take us, to obtain such approval or complete such filing or other procedures in our securities offerings.

The Chinese government has exercised, and may continue to exercise, substantial influence or control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in mainland China could be undermined if our Chinese subsidiaries are not able to obtain or maintain approvals to operate in mainland China. The central or local governments could impose new, stricter regulations or interpretations of existing regulations that could require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

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The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, appear to require that offshore special purpose vehicles, controlled by Chinese companies or individuals formed for the purpose of seeking a public listing on an overseas stock exchange through acquisitions of Chinese domestic companies or assets in exchange for the shares of the offshore special purpose vehicles, obtain CSRC approval prior to publicly listing their securities on an overseas stock exchange.

Further, on July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law, pursuant to which Chinese regulators are required to accelerate rulemaking related to the overseas issuance and listing of securities, and update the existing laws and regulations related to data security, cross-border data flow, and management of confidential information. Numerous regulations, guidelines and other measures have been or are expected to be adopted in addition to the Cyber Security Law and Data Security Law.

On February 17, 2023, with the approval of the State Council, the CSRC issued the Listing Records Rules, including the Trial Measures, for the administration of overseas listing filing system, which became effective on March 31, 2023. Under the Listing Records Rules, a company established in mainland China seeking securities offering and listing, by both direct or indirect means, in an overseas market are required to undertake filing procedures with the CSRC for its overseas offering and listing activities. Further, the Trial Measures set forth a list of circumstance under which overseas offering and listing by PRC domestic companies is prohibit, including: (i) where such securities offering and listing is explicitly prohibited by the PRC laws; (ii) where the intended securities offering and listing may endanger national security as reviewed and determined by competent PRC authorities under the State Council in accordance with PRC laws; (iii) where the company established in mainland China , or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three (3) years; (iv) where the company established in mainland China seeking securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; and (v) where there are material ownership disputes over equity held by the controlling shareholder of company established in mainland China or by other shareholders that are controlled by the controlling shareholder and/or actual controller. In accordance with the Trial Measures, the listing and trading of our Common Shares on Nasdaq is deemed as an indirect overseas offering and listing by companies established in China, and thus, we are subject to the Listing Records Rules and the relevant filing procedures as required. Further, we believe, as of the date of this annual report, none of the circumstances prohibiting the overseas offering and listing by companies established in China as listed above applies to us, and we can offer and continue to offer our Common Shares on Nasdaq.

In accordance with the Notice on the Arrangement for the Filing of Overseas Offering and Listing by Domestic Companies issued by the CSRC along with the Listing Records Rules on the same day, we are deemed as an “Existing Issuer” because we have been listed overseas before March 31, 2023. Under such Notice, we are not required to undertake the initial filing procedure immediately. However, we shall carry out filing procedures as required by the Trial Measures in a timely manner for the subsequent events, including any further follow-up offerings on Nasdaq, dual and/or secondary offering and listing on different overseas markets, and occurrence of material events including change of control, investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities, change of listing status or transfer of listing segment, and voluntary or mandatory delisting. If we or our Mainland China Subsidiaries in the future fail to undertake filing procedures as stipulated in the Trial Measures or offer and list securities in an overseas market in violation of the Trial Measures, the CSRC may order rectification, issue warnings to us and/or our Mainland China Subsidiaries, and impose a fine of between RMB1,000,000 yuan and RMB10,000,000 yuan. The CSRC may also inform its regulatory counterparts in the overseas jurisdictions, such as the SEC, via cross-border securities regulatory cooperation mechanisms.

Further, on February 24, 2023, the CSRC, together with Ministry of Finance, National Administration of State Secrets Protection, and National Archives Administration of China, released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the “Confidentiality Provisions”), which took effect on March 31, 2023 with the Trial Measures. Under the Confidentiality Provisions, companies established in China seeking overseas offering and listing, by both direct and indirect means, are required to institute a sound confidentiality and archives system. If such companies established in China intend to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, they shall obtain approval from competent authorities and complete the relevant filing procedure with the competent secrecy administrative department prior to their disclosure or provision of such documents and materials. Further, if they provide or publicly disclose documents and materials which may adversely affect national security or public interests, they shall strictly follow the corresponding procedures in accordance with relevant laws and regulations. Once effective, any failure or perceived failure by us or our subsidiaries to comply with the above confidentiality and archives administration requirements under the Confidentiality Provisions and other relevant PRC laws and regulations may cause relevant entities to be held legally liable by competent authorities and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

Any failure of us or our Mainland China Subsidiaries to fully comply with the Listing Records Rules may significantly limit or completely hinder our ability to offer or continue to offer our Common Shares on Nasdaq, cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause our Common Shares to significantly decline in value or become worthless.

To operate our general business activities currently conducted in mainland China, each of our Chinese subsidiaries is required to obtain a business license from the local counterpart of the State Administration for Market Regulation, or SAMR. Each of our Chinese subsidiaries has obtained a valid business license from the local counterpart of the SAMR, and no application for any such license has been denied.

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Recent regulatory developments in China, including greater oversight and discretion over privacy and data security, may subject us to additional regulatory review, and any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China based issuers. The PRC government recently initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, among other things, including adopting new measures to extend the scope of cybersecurity reviews, cracking down on illegal activities in the securities market, and expanding the efforts in anti-monopoly enforcement. The PRC government is increasingly focused on data security, recently launching cybersecurity review against a number of mobile apps operated by several U.S.-listed Chinese companies and prohibiting these apps from registering new users during the review period. We are subject to various risks and costs related to the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. Such covered data is wide ranging and relates to our investors, employees, suppliers, customers and other third parties. The relevant PRC laws apply not only to third-party transactions, but also to transfers of information between the listed parent holding company, offshore subsidiaries, our PRC subsidiaries, and other parties with which we have commercial relations.

The PRC regulatory and enforcement regime with regard to privacy and data security is evolving. The PRC Cyber Security Law, which was promulgated on November 7, 2016 and became effective on June 1, 2017, provides that personal information and important data collected and generated by operators of critical information infrastructure in the course of their operations in the PRC should be stored in the PRC, and the law imposes heightened regulation and additional security obligations on operators of critical information infrastructure. On September 12, 2022, the Cyber Administration of China issued the Cyber Security Law (Draft for Comments) to solicit public comments. The draft mainly adjusted the penalties stipulated in Cyber Security Law. As of now, Cyber Security Law has not been revised. We cannot assure you that relevant governmental authorities will not interpret or implement these and other laws or regulations in ways that may negatively affect us.

On December 28, 2021, the CAC, the NDRC, the MIIT, and several other administrations jointly published the Measures for Cybersecurity Review, effective on February 15, 2022, which provides that certain operators of critical information infrastructure purchasing network products and services or network platform operators carrying out data processing activities, which affect or may affect national security, must apply with the Cybersecurity Review Office for a cybersecurity review. However, the scope of operators of “critical information infrastructure” under the current regulatory regime remains unclear and is subject to the decisions of competent PRC regulatory authorities. Based on our understanding of the Measures as of the date hereof, the exact scope of operators of “critical information infrastructure” under the Measures and current PRC regulatory guidance remains unclear, and is subject to the decisions of the relevant PRC government authorities that have been delegated the authority to identify operators of “critical information infrastructure” in their respective jurisdictions (including regions and industries). PRC government authorities have wide discretion in the interpretation and enforcement of these laws, including the identification of operators of “critical information infrastructure” and the interpretation and enforcement of requirements potentially applicable to such operators of “critical information infrastructure.” As we operate an internet platform, we are at risk of being deemed to be an operator of “critical information infrastructure” or a network platform operator meeting the above criteria under PRC cybersecurity laws. If we are identified as an operator of “critical information infrastructure,” we would be required to fulfill various obligations as required under PRC cybersecurity laws and other applicable laws for such operators of “critical information infrastructure,” including, among others, setting up a special security management organization, organizing regular cybersecurity education and training, formulating emergency plans for cyber security incidents and conducting regular emergency drills, and we may need to follow cybersecurity review procedure and apply with Cybersecurity Review Office before making certain purchases of network products and services. During cybersecurity review, we may be required to suspend the provision of any existing or new services to our users, and we may experience other disruptions of our operations, which could cause us to lose users and customers therefore resulting in adverse impacts on our business. The cybersecurity review could also lead to negative publicity and a diversion of time and attention of our management and our other resources. It could be costly and time-consuming for us to prepare application materials and make the applications. Furthermore, there can be no assurance that we will obtain the clearance or approval for these applications from the Cybersecurity Review Office and the relevant regulatory authorities in a timely manner, or at all. If we are found to be in violation of cybersecurity requirements in China, the relevant governmental authorities may, at their discretion, conduct investigations, levy fines, request app stores to take down our apps and cease to provide viewing and downloading services related to our apps, prohibit the registration of new users on our platform, or require us to change our business practices in a manner materially adverse to our business. Any of these actions may disrupt our operations and adversely affect our business, results of operations and financial condition.

On July 7, 2022, the CAC issued the Measures for Security Assessment of Cross-border Data Transfer, which took effect on September 1, 2022. According to these measures, in addition to the requirement to conduct self-assessment on the risks of the outbound data transfer, to provide data abroad under any of the following circumstances, a data processor must apply to the national cyberspace department for data security assessment through the provincial-level cyberspace administration authority: (i) outbound transfer of important data by a data processor; (ii) outbound transfer of personal information by a critical information infrastructure operator or a personal information processor who has processed the personal information of more than one million people; (iii) outbound transfer of personal information by a personal information processor who has made outbound transfers of the personal information of 100,000 people cumulatively or the sensitive personal information of 10,000 people cumulatively since January 1 of the previous year; and (iv) other circumstances where an application for the security assessment of an outbound data transfer is required as prescribed by the national cyberspace administration authority. The Measures for Security Assessment of Cross-border Data Transfer further stipulate the process and requirements for the security assessment. However, it remains uncertain how the PRC government authorities will regulate companies under such circumstances. This brings more uncertainties with respect to the application and enforcement of the newly published measures, and we may be subject to such outbound data security assessment with the CAC.

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The Regulation on Network Data Security Management, which was promulgated on September 24, 2024 and became effective on January 1, 2025. The Regulation on Network Data Security Management introduces several key obligations, including requiring network data handlers to specify the purpose and method of personal information processing, as well as the types of personal information involved, before any personal information is handled. It also clarifies definitions for important data, outlines the obligations of those handling important data, establishes broader contractual requirements for data sharing between data handlers, and introduces a new exemption for regulatory obligations regarding cross-border data transfers.

Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act, 2023, and related regulations if the PCAOB determines that it cannot inspect or investigate completely our auditors for two consecutive years and as a result, Nasdaq may determine to delist our Common Shares.

Independent registered public accounting firms issue audit opinions on the financial statements included in the annual reports filed by U.S. public companies with the SEC. Auditors of companies that are traded publicly in the United States are required by the laws of the United States to undergo regular inspections by the PCAOB. In the recent years, U.S. regulatory authorities have continued to express their concerns about challenges in their oversight of financial statement audits of U.S.-listed companies with significant operations in China. As part of a continued regulatory focus in the United States on access to audit and other information, the Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020. The HFCAA includes requirements for the SEC to identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor’s local jurisdiction. The HFCAA also requires that, to the extent that the PCAOB has been unable to inspect an issuer’s auditor for three consecutive years since 2021, the SEC shall prohibit its securities registered in the United States from being traded on any national securities exchange or over-the-counter markets in the United States.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. The interim final rule applies to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. Consistent with the HFCAA, the interim final rule requires the submission of documentation to the SEC establishing that such a registrant is not owned or controlled by a government entity in that foreign jurisdiction and also requires disclosure in a foreign issuer’s annual report regarding the audit arrangements of, and government influence on, such registrants. On May 13, 2021, the PCAOB issued proposed PCAOB Rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act for public comment. The proposed rule provides a framework for making determinations as to whether PCAOB is unable to inspect an audit firm in a foreign jurisdiction, including the timing, factors, bases, publication and revocation or modification of such determinations, and such determinations will be made on a jurisdiction-wide basis in a consistent manner applicable to all firms headquartered in the jurisdiction. In November 2021, the SEC approved PCAOB Rule 6100. On December 2, 2021, the SEC adopted amendments to final rules implementing the disclosure and submission requirements of the HFCAA.

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On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, or AHFCAA, and on February 4, 2022, the U.S. House of Representatives passed the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (COMPETES) Act of 2022, or the COMPETES Act. Both bills would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections or complete investigations for two consecutive years instead of three. .

On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

On December 16, 2021, the PCAOB announced the PCAOB Holding Foreign Companies Accountable Act determinations (the “PCAOB determinations”) relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong.

On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of Protocol (the “Protocol”), governing inspections and investigations of audit firms based in China and Hong Kong. On December 15, 2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and vacated its previous Determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination.

On December 29, 2022, the Consolidated Appropriations Act, 2023 (the “Consolidated Appropriations Act”) was signed into law, which contained a provision identical to the AHFCAA and amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before an issuer’s securities may be prohibited from trading or delisted.

Our current auditor, YCM CPA INC., is an independent registered public accounting firm headquartered in the United States. The firm is registered with the U.S. Public Company Accounting Oversight Board (PCAOB) and is required by U.S. law to undergo regular PCAOB inspections to assess its compliance with U.S. laws and professional standards. YCM CPA INC. has been subjected to PCAOB inspections.

Notwithstanding the foregoing, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, or if there is any regulatory change or step taken by PRC regulators that does not permit our auditor to provide audit documentations located in China or Hong Kong to the PCAOB for inspection or investigation, you may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are completely inspected or investigated by the PCAOB, or a lack of PCAOB inspections or investigations of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate.

We are a holding company and may rely for funding on dividend payments from our subsidiaries, which are subject to restrictions under PRC laws.

We are a holding company incorporated in the British Virgin Islands, and we operate our core businesses through our subsidiaries in the PRC. Therefore, the availability of funds for us to pay dividends to our shareholders and to service our indebtedness depends upon dividends received from these PRC subsidiaries. If our subsidiaries incur debt or losses, their ability to pay dividends or other distributions to us may be impaired. As a result, our ability to pay dividends and to repay our indebtedness will be restricted. PRC laws require that dividends be paid only out of the after-tax profit of our PRC subsidiaries calculated according to PRC accounting principles, which differ in many aspects from generally accepted accounting principles in other jurisdictions. PRC laws also require enterprises established in the PRC to set aside part of their after-tax profits as statutory reserves. These statutory reserves are not available for distribution as cash dividends. In addition, restrictive covenants in bank credit facilities or other agreements that we or our subsidiaries may enter into in the future may also restrict the ability of our subsidiaries to pay dividends to us. These restrictions on the availability of our funding may impact our ability to pay dividends to our Shareholders and to service our indebtedness.

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PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds from the offerings of any securities to make loans or additional capital contributions to our PRC operating subsidiaries.

As an offshore holding company, our ability to make loans or additional capital contributions to our PRC operating subsidiaries is subject to PRC regulations and approvals. These regulations and approvals may delay or prevent us from using the proceeds we received in the past or will receive in the future from the offerings of securities to make loans or additional capital contributions to our PRC operating subsidiaries and impair our ability to fund and expand our business which may adversely affect our business, financial condition and result of operations.

For example, the SAFE promulgated the Circular on the Relevant Operating Issues concerning Administration Improvement of Payment and Settlement of Foreign Currency Capital of Foreign Invested Enterprises, or Circular 142, on August 29, 2008. Under Circular 142, registered capital of a foreign invested company settled in RMB converted from foreign currencies may only be used within the business scope approved by the applicable governmental authority and may not be used for equity investments in the PRC. In addition, foreign invested companies may not change how they use such capital without the SAFE’s approval and may not in any case use such capital to repay RMB loans if they have not used the proceeds of such loans. Furthermore, the SAFE promulgated a circular on November 9, 2010, or Circular 59, which requires the authenticity of settlement of net proceeds from offshore offerings to be closely examined and the net proceeds to be settled in the manner described in the offering documents. In addition, to strengthen Circular 142, on November 9, 2011, the SAFE promulgated the Circular on Further Clarifying and Regulating Relevant Issues Concerning the Administration of Foreign Exchange under Capital Account, or Circular 45, which prohibits a foreign invested company from converting its registered capital in foreign exchange currency into RMB for the purpose of making domestic equity investments, granting entrusted loans, repaying intercompany loans, and repaying bank loans that have been transferred to a third party. Circular 142, Circular 59 and Circular 45 may significantly limit our ability to transfer the net proceeds from offerings of our securities or any future offering to our PRC subsidiaries and convert the net proceeds into RMB, which may adversely affect our liquidity and our ability to fund and expand our business in the PRC.

PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penalties and limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’s ability to distribute profits to us, or otherwise adversely affect us.

On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-raising and Return Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According to Notice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing such offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment to registration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in the offshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of the offshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshore special purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with the local SAFE branch by March 31, 2006.

To further clarify the implementation of Circular 75, the SAFE issued Circular 19 on May 20, 2011. Under Circular 19, PRC subsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’s shareholders or beneficial owners who are PRC residents in a timely manner. However, on May 11, 2013, Circular 19 was annulled by Circular 21, issued by the SAFE. Circular 21 has not yet given clear guidance as to how to complete the relevant registration procedures with the local SAFE branch.

While Ms. Yefang Zhang, a citizen of the Saint Lucia, is not required to register with the SAFE, it is not clear, especially with the annulment of Circular 19 and the absence of replacement guidance, whether Mr. Zhengyu Wang, Ms. Zhang’s husband and a PRC resident who may be deemed to beneficially own shares of our company, needs to register with the SAFE. In the event Mr. Zhengyu Wang or any other shareholders are required to register with the SAFE, we cannot provide any assurances that such registration will be completed in a timely manner, or at all. As advised by our PRC legal counsel, if any failure by any of our shareholders who are PRC residents, to comply with relevant requirements under this regulation could subject such shareholders and/or our PRC subsidiaries to fines and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiaries or to provide loans to our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adversely affect our business.

Chinese economic downturn or growth slowdown may harm our business.

Since 2010, Chinese economic growth has been slowing down from double-digit GDP speed. The situation has impacted many industries and economic segments in China, such as restaurants, the hospitality industry, auto industry, and discretionary consumer spending. Our business operations in China mainly rely on consumer cash availability and spending, consumer demand for our products and consumer confidence, which are impacted by an economic downturn. The recent rapid spread of COVID-19, or fear of such an event, can have a material adverse effect on the demand for our products and therefore have a material adverse effect on our business and results of operations. Office closings, travel restrictions and required quarantines implemented in China has caused significant slowdown of China’s economic growth and could further adversely affect China’s economy resulting in an economic downturn. If China’s economy continues to slow down or go into recession, our financial and operation results could be materially and adversely affected as a result of slower consumer spending on our products or below par performance of the consumer discretionary goods industries.

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U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.

The Securities and Exchange Commission (the “SEC”), the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in the PRC. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigation in China. China has recently adopted a revised securities law that became effective on March 1, 2020, Article 177 of which provides, among other things, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. Accordingly, without governmental approval in China, no entity or individual in China may provide documents and information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery conducted by overseas regulators, which could present significant legal and other obstacles to obtaining information needed for investigations and litigation conducted outside of China.

According to our PRC counsel, China has recently formulated an administrative regulation, namely, the provisions on strengthening the confidentiality and archives management related to the overseas issuance and listing of securities by domestic enterprises, in order to promote cooperation between China and the United States in this regard. At present, this administrative regulation is still soliciting opinions from the society and has not yet come into force. This law makes it clear that the investigation and evidence collection or inspection conducted by overseas regulatory institutions in China should be carried out through the cross-border regulatory cooperation mechanism, and the CSRC and relevant competent departments will provide necessary assistance in accordance with the bilateral and multilateral cooperation mechanism. At the same time, in combination with the international practice of cross-border audit and supervision cooperation, the expression that “on-site inspection shall be mainly conducted by Chinese regulators or rely on the inspection results of Chinese regulators” in the original provisions is deleted. So it may still present some legal and other obstacles to obtaining information needed for investigations and litigation conducted outside of China.

Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.

China passed the Enterprise Income Tax Law, or the EIT Law, and it is implementing rules, both of which became effective on January 1, 2008. Under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The implementing rules of the EIT Law define de facto management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.

On April 22, 2009, the State Administration of Taxation of China, or the SAT, issued the Circular Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the SAT Notice 82, further interpreting the application of the EIT Law and its implementation to offshore entities controlled by a Chinese enterprise or enterprise group. Pursuant to the SAT Notice 82, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or enterprise group will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of daily operations reside or perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial assets and properties, accounting books, corporate stamps, board and stockholder minutes are kept in China; and (iv) at least half of its directors with voting rights or senior management often resident in China. After SAT Notice 82, the SAT issued a bulletin, known as SAT Bulletin 45, which took effect on September 1, 2011, to provide more guidance on the implementation of SAT Notice 82 and clarify the reporting and filing obligations of such “non-domestically incorporated resident enterprise.” SAT Bulletin 45 provides procedures and administrative details for the determination of resident status and administration on post-determination matters. On January 29, 2014, the SAT issued Announcement of the State Administration of Taxation on Recognizing Resident Enterprises Based on the Criteria of de facto Management Bodies, to further clarify the reporting and filing procedure for the offshore entities controlled by a Chinese enterprise or enterprise group and recognized as a resident enterprise.

Because THL, USCNHK Holding Limited (“USCNHK Holding”) and Euroasia are controlled (although indirectly) by a non-PRC individual, rather than by a PRC enterprise or a PRC enterprise group, we do not believe that any of THL, USCNHK or Euroasia is a PRC resident enterprise.

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However, although both SAT Notice 82 and SAT Bulletin 45 only apply to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreign individuals, the determining criteria set forth in SAT Notice 82 and SAT Bulletin 45 may reflect the SAT’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, PRC enterprise groups or by PRC or foreign individuals. If the PRC tax authorities determine that THL or USCNHK is a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Currently, we do not have any non-China source income, as we complete our sales, including export sales, in China. Second, under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries would be deemed as “qualified investment income between resident enterprises” and therefore qualify as “tax-exempt income” pursuant to the clause 26 of the EIT Law. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which the dividends we pay with respect to our common stock, or the gain our non-PRC stockholders may realize from the transfer of our common stock, may be treated as PRC-sourced income and may therefore be subject to a 10% PRC withholding tax. The EIT Law and its implementing regulations are, however, relatively new and ambiguities exist with respect to the interpretation and identification of PRC-sourced income, and the application and assessment of withholding taxes. If we are required under the EIT Law and its implementing regulations to withhold PRC income tax on dividends payable to our non-PRC stockholders, or if non-PRC stockholders are required to pay PRC income tax on gains on the transfer of their Common Shares, our business could be negatively impacted and the value of your investment may be materially reduced. Further, if we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both China and such countries in which we have taxable income, and our PRC tax may not be creditable against such other taxes.

We may be subject to a significant withholding tax should equity transfers by our non-resident enterprises be determined to have been done without a reasonable business purpose.

In December 2009, the State Administration of Tax in China issued a circular on strengthening the management of proceeds from equity transfers by non-resident enterprises and requires foreign entities to report indirect sales of resident enterprises. If the existence of the overseas intermediary holding company is disregarded due to lack of reasonable business purpose or substance, gains on such sale are subject to PRC withholding tax. Due to limited guidance and implementation history of the circular, significant judgment is required in determining the existence of a reasonable business purpose by considering multiple factors, such as the form and substance of the arrangement, time of establishment of the foreign entity, relationship between each step of the arrangement, relationship between each component of the arrangement, implementation of the arrangement and the changes in the financial position of all parties involved in the transaction. Although we believe that our transactions during all the periods presented would be determined to have reasonable business purposes, should this not be the case, we would be subject to a significant withholding tax that could materially and adversely impact our financial position, results of operations and cash flows.

We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.

We are subject to the U.S. Foreign Corrupt Practices Act (“FCPA”), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We are also subject to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. We have operations, agreements with third parties, and make sales in China, which may experience corruption. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants or distributors of our company, because these parties are not always subject to our control. We are in process of implementing an anticorruption program, which prohibits the offering or giving of anything of value to foreign officials, directly or indirectly, for the purpose of obtaining or retaining business. The anticorruption program also requires that clauses mandating compliance with our policy be included in all contracts with foreign sales agents, sales consultants and distributors and that they certify their compliance with our policy annually. It further requires that all hospitality involving promotion of sales to foreign governments and government-owned or controlled entities are in accordance with specified guidelines. In the meantime, we believe to date we have complied in all material respects with the provisions of the FCPA and Chinese anti-corruption law.

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However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption law may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

Uncertainties with respect to the PRC legal system could adversely affect us.

We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRC subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to wholly foreign-owned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.

Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

Historically, the principal regulation governing foreign ownership of businesses in the PRC was the Guidance Catalogue for Industrial Structure Adjustments (the “Catalogue”). The Catalogue classified various industries into three categories: encouraged, restricted and prohibited. The Catalogue has been replaced by the Special Administrative Measures (Negative List) for Foreign Investment Access (2018), effective July 28, 2018, and amended and restated by the 2024 version, effective November 1, 2024 (the “Negative List”). The Negative List specifies the prohibited and non-prohibited (similar to the restricted in the Guidance Catalogue) industries for foreign investment. For the industries not covered by the Negative List, the foreign investment and the domestic investment have equal access. Foreign investors may not invest in the prohibited industries specified by the Negative List. For the non-prohibited industries on the Negative List, a foreign investor must obtain an investment permit. There are certain requirements on the equity ownership and the executive officers of the foreign invested enterprises. If PRC has certain equity requirements in certain investment fields, no foreign-invested partnership may be established.

According to the Negative List, our charcoal products are not prohibited. Therefore, our proportion of the foreign investment for these products may be up to 100%. We may not also produce or operate those items which belong to the Negative List. In addition, we are not sure if the Negative List will change in a way that the foreign investment may be limited or prohibited in our business.

Governmental control of currency conversion may affect the value of your investment.

The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China, and in recent years, such controls have become increasingly stringent, although these controls are mainly aimed at criminal activities such as money laundering and fraud. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from our PRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange of the People’s Republic of China (the “SAFE”) by complying with certain procedural requirements. However, approval from appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also, at its discretion, restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our security-holders.

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Fluctuations in exchange rates could adversely affect our business and the value of our securities.

Changes in the value of the RMB against the U.S. dollar, Euro and other foreign currencies are affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of the RMB may have a material adverse effect on our revenues and financial condition, and the value of, and any dividends payable on our shares in U.S. dollar terms. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount that we receive from the conversion. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of paying dividends on our Common Shares or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us. In addition, fluctuations of the RMB against other currencies may increase or decrease the cost of imports and exports and thus affect the price-competitiveness of our products against products of foreign manufacturers or products relying on foreign inputs.

Since July 2005, the RMB is no longer pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Our trading business relies heavily on exchange rate fluctuations. We seek to match suppliers and potential purchasers, which may be located in different geographic areas, and to lock in the exchange rates in order to ensure an appropriate profit margin on such sales. To the extent we are unable to obtain favorable exchange rates, we may find lower profits or losses than we expect.

We reflect the impact of currency translation adjustments in our financial statements under the heading “accumulated other comprehensive income (loss).” For the years ended December 31, 2025, 2024 and 2023, we had adjustments of $1,766,415, $86,797 and $(4,220,033), respectively, for foreign currency translations. Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions. While there is a possibility that we may consider hedging transactions in the future, their availability and effectiveness may be limited, and we may not be able to successfully hedge our exposure at all. Furthermore, our foreign currency exchange losses may be amplified by PRC exchange control regulations, which restrict our ability to convert RMB into foreign currencies.

If we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations and our reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.

In recent years, U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and the SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on our company and our business. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend the Company. This situation may be a major distraction to our management. If such allegations are not proven to be groundless, our company and business operations will be severely hampered and your investment in our stock could be rendered worthless.

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Our business may be materially and adversely affected if any of our PRC subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding.

The Enterprise Bankruptcy Law of the PRC, or the Bankruptcy Law, came into effect on June 1, 2007. The Bankruptcy Law provides that an enterprise will be liquidated if the enterprise fails to settle its debts as and when they fall due and if the enterprise’s assets are, or are demonstrably, insufficient to clear such debts.

Our PRC subsidiaries hold certain assets that are important to our business operations. If any of our PRC subsidiaries undergoes a voluntary or involuntary liquidation proceeding, unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.

According to the SAFE’s Notice of the State Administration of Foreign Exchange on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment, effective on December 17, 2012, and the Provisions for Administration of Foreign Exchange Relating to Inbound Direct Investment by Foreign Investors, effective May 13, 2013, if any of our PRC subsidiaries undergoes a voluntary or involuntary liquidation proceeding, prior approval from the SAFE for remittance of foreign exchange to our shareholders abroad is no longer required, but we still need to conduct a registration process with the SAFE local branch. It is not clear whether “registration” is a mere formality or involves the kind of substantive review process undertaken by SAFE and its relevant branches in the past.

Labor laws in the PRC may adversely affect our results of operations.

On June 29, 2007, the PRC government promulgated the Labor Contract Law of the PRC, which became effective on January 1, 2008 and was last amended on December 28, 2021. The Labor Contract Law imposes greater liabilities on employers and significantly affects the cost of an employer’s decision to reduce its workforce. Further, it requires certain terminations be based upon seniority and not merit. In the event we decide to significantly change or decrease our workforce, the Labor Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our business or in a timely and cost-effective manner, thus materially and adversely affecting our financial condition and results of operations.

Imposition of trade barriers and taxes may reduce our ability to do business internationally, and the resulting loss of revenue could harm our profitability.

We may experience barriers to conducting business and trade in our targeted markets, specifically South Korea, Japan and Russia, in the form of delayed customs clearances, customs duties and tariffs. In addition, we may be subject to substantial taxes on profits, revenues, assets and payroll, as well as value-added tax. The markets in which we plan to operate may impose onerous and unpredictable duties, tariffs and taxes on our business and products, and there can be no assurance that this will not reduce the level of sales that we achieve in such markets, which would reduce our revenues and profits.

Risks Related to Our Corporate Structure and Operation

We incur additional costs as a public company, which could negatively impact our net income and liquidity.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, Sarbanes-Oxley and rules and regulations implemented by the SEC and The Nasdaq Capital Market (the “Nasdaq”) require significantly heightened corporate governance practices for public companies. We expect that these rules and regulations to increase our legal, accounting and financial compliance costs and make many corporate activities more time-consuming and costly.

We do not expect to incur materially greater costs as a public company than those incurred by similarly sized U.S. public companies. If we fail to comply with these rules and regulations, we could become the subject of a governmental enforcement action, investors may lose confidence in us and the market price of our Common Shares could decline.

The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies.

As a publicly listed company, we are required to file periodic reports with the SEC upon the occurrence of matters that are material to our company and shareholders. In some cases, we need to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our company. Similarly, as a U.S.-listed public company, we are governed by U.S. laws that our competitors, which are mostly private Chinese companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our public listing could affect our results of operations.

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We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.

We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we are not required to issue quarterly reports or proxy statements. We are not required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers are not required to report equity holdings under Section 16 of the Exchange Act and are not subject to the insider short-swing profit disclosure and recovery regime.

As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

The determination of our status as a foreign private issuer is made annually on the last business day of our most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on or after June 30, 2026. We would lose our foreign private issuer status if (1) a majority of our outstanding voting securities are directly or indirectly held of record by U.S. residents, and (2) a majority of our shareholders or a majority of our directors or management are U.S. citizens or residents, a majority of our assets are located in the United States, or our business is administered principally in the United States. If we were to lose our foreign private issuer status, the regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly higher. We may also be required to modify certain of our policies to comply with corporate governance practices associated with U.S. domestic issuers, which would involve additional costs.

Our directors’ and executive officers’ other business activities may pose conflicts of interest.

Our directors and executive officers have other business interests outside the company that could potentially give rise to conflicts of interest. For example, our Chairwoman and director, Yefang Zhang, is also the Chairwoman and Chief Executive Officer of Farmmi, Inc. (“Farmmi”), another Nasdaq listed company. Ms. Zhang also indirectly controls 62.07% of CN Energy Group. Inc. (“CN Energy”), another Nasdaq-listed company. CN Energy is a manufacturer and supplier of wood-based activated carbon and a producer of biomass electricity. As Ms. Zhang devotes considerable time and efforts to Farmmi, CN Energy and certain privately held companies, these business activities could both distract her from focusing on Tantech and pose an issue of time commitment.

Ms. Zhang signed a Non-Competition Agreement with our company, Farmmi and CN Energy which provides that Ms. Zhang shall not vote in favor or otherwise cause Farmmi or CN Energy to engage in the business that we conduct. Although, because of this non-competition agreement, we do not believe that there are business activities of Ms. Zhang that will compete directly with our business operations, it is possible that the enforceability of this agreement may be challenged and a conflict of interest may occur.

An insufficient amount of insurance could expose us to significant costs and business disruption.

While we have purchased insurance to cover certain assets and property of our business, the amounts and scope of coverage could leave our business inadequately protected from loss. If we were to incur substantial losses or liabilities due to fire, explosions, floods, other natural disasters or accidents or business interruption, our results of operations could be materially and adversely affected.

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Risks Related to Ownership of Our Common Shares

We may be unable to regain compliance with the applicable continued listing requirements of the Nasdaq Capital Market and as a result, our securities could be delisted from Nasdaq, which may cause the price of our securities to decline and adversely impact our ability to raise capital.

Our Common Shares are traded on the Nasdaq Capital Market. Nasdaq rules require us to maintain a minimum closing bid price of $1.00 per common share. The closing bid price of our Common Shares fell below $1.00 per share for 30 consecutive trading days, and as a result, we are not compliant with Nasdaq’s listing standards. There can be no assurance we will meet the minimum bid price requirements or any other requirements in the future, in which case our Common Shares could be delisted.

In the event that our Common Shares are delisted from Nasdaq and are not eligible for quotation or listing on another market or exchange, trading of our Common Shares could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the OTC. In such event, it could become more difficult to sell or obtain accurate price quotations for our Common Shares and there would likely also be a reduction in our coverage by securities analysts and news media, which could cause the price of our Common Shares to decline further. In addition, our ability to raise additional capital may be severely impacted, which may negatively affect our plans and the results of our operations.

If we continue to be unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Shares may decline.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. In addition, we are required to furnish a report by management on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. If we continue to identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Shares could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

The requirements of being a public company may strain our resources and divert management’s attention.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the securities exchange on which we list, and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly as we have ceased to be an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results.

As a result of disclosure of information in this annual report and in filings required of a public company, our business and financial condition become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business, brand and reputation and results of operations.

We also expect that being a public company and these rules and regulations make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

The market price of our Common Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the price you paid.

The trading prices for our Common Shares have fluctuated substantially since our Common Shares were first listed on the Nasdaq on March 24, 2015. The trading price of our Common Shares has ranged from $0.30 to $2.59 per share in the previous twelve months, and the last reported trading price on May 12, 2026 was $0.4236 per share. The market price of our Common Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

	·	actual or anticipated fluctuations in our revenue and other operating results;

	·	the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

	·	actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

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	·	announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

	·	price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

	·	lawsuits threatened or filed against us; and

	·	other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

We do not intend to pay dividends for the foreseeable future.

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Common Shares if the market price of our Common Shares increases.

We incur significant costs as a result of being a public company.

As a public company, we incur legal, accounting and other expenses that we did not incur as a private company. For example, we must now engage U.S. securities law counsel and U.S. auditors that we did not require as a private company, and we have annual payments for listing on Nasdaq. In addition, the Sarbanes-Oxley Act, as well as new rules subsequently implemented by the SEC and NASDAQ, have required changes in corporate governance practices of public companies. We expect these new rules and regulations to increase our legal, accounting and financial compliance costs and to make certain corporate activities more time-consuming and costly. In addition, we incur additional costs associated with our public company reporting requirements. While it is impossible to determine the amounts of such expenses, we expect that we incur expenses of between $500,000 and $1 million per year that we did not experience as a private company.

U.S. tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. shareholders.

A non-U.S. entity treated as a corporation for U.S. federal income tax purposes will be treated as a “passive foreign investment company,” or a PFIC, for any taxable year for which either (i) at least 75% of its gross income consists of certain types of “passive income” or (ii) at least 50% of the average value of the corporation’s assets produce, or are held for the production of, those types of passive income. For purposes of these tests, passive income includes rents and royalties (other than rents and royalties that are received from unrelated parties in connection with the active conduct of a trade or business) and does not include income derived from the performance of services.

If we are treated as a PFIC, U.S. Holders would ordinarily be able to mitigate certain of the negative tax consequences if they are able to make: (i) a timely qualified electing fund (“QEF”) election; (ii) a protective QEF election; or (iii) a mark to market election with respect to the first taxable year in which we are considered a PFIC during the U.S. Holder’s holding period in its shares.

We are not committing to provide our U.S. Holders with the information required for making a QEF election or protective QEF election. If we fail to provide such information, a QEF election with respect to such entity generally will not be available. In such event, the rules described in the next paragraph generally will apply.

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If we are treated as a PFIC, a U.S. Holder that does not make a QEF election generally will be subject to a special tax and an interest charge upon the sale of its shares or receipt of an “excess distribution” with respect to its shares. A U.S. Holder will be treated as receiving an “excess distribution” if the amount of the distributions received by the U.S. Holder in any taxable year is more than 125% of the average annual distributions paid by the Company with respect to its shares during the three preceding taxable years (or the period in which the U.S. Holder held such shares if shorter).

In addition, a portion of any gain recognized by a U.S. Holder upon the sale of our shares may be recharacterized as ordinary income. Further, any dividends received from the Company, if the Company is treated as a PFIC, will not constitute qualified dividend income and will not be eligible for the reduced 20% rate of tax even if such rate would be available otherwise. If a U.S. Holder holds our shares during any taxable year in which we are treated as PFICs, such shares will generally be treated as stock in a PFIC for all subsequent years.

We are subject to liability risks stemming from our foreign status, which could make it more difficult for investors to sue or enforce judgments against our company.

Our operations and assets are located in the PRC. In addition, most of our executive officers and directors are non-residents of the U.S., and substantially all the assets of such persons are located outside the U.S. As a result, it could be difficult for investors to effect service of process in the U.S., or to enforce a judgment obtained in the U.S. against us or any of these persons.

In addition, British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are also unlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to impose liabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature. There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands will generally recognize and enforce the non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. This means that even if shareholders were to sue us successfully, they may not be able to recover anything to make up for the losses suffered.

Lastly, under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents of the corporation, our amended and restated memorandum and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordance with the general law and the articles and memorandum.

There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law of the British Virgin Islands for business companies is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and the constituent documents of the corporation. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company’s memorandum and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are the following: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts that constitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right to vote; and (4) where the company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded minority shareholders under the laws of many states in the United States.

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ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

Tantech Bamboo was established in October 2002 under the trading name “Lishui Zhonglin High Tech Co., Ltd.” by its incumbent owner. Lishui Forasen Food Co. Ltd. was established in January 1998. In April 2003, it changed its name to Lishui Forasen Green Industry Group, later renamed Forasen Group Co. Ltd. (“Forasen Group”). In May 2003, 60% of THL’s shares were acquired by the Forasen Group. A second subsidiary, Zhejiang Tantech Bamboo Charcoal Co., Ltd. (“Tantech Charcoal”), was acquired in September 2006 to manage the Forasen Group’s export business. In September 2008 a third subsidiary, Zhejiang Tantech Energy Technology Co., Ltd. (“Tantech Energy”), was established to research and develop bamboo charcoals application as a carbon component for EDLCs. On December 14, 2017, the Company entered into a sale agreement and related agreements to transfer its EDLC carbon business (including intellectual property rights and equipment) to Zhejiang Apeikesi Energy Co., Ltd. (the “Buyer”), a PRC start-up company controlled by Dr. Zaihua Chen, the Company’s then Chief Technology Officer. Following the renaming of the Forasen Group to its current name, 95% of Tantech Bamboo’s shares were acquired by USCNHK, a Hong Kong registered company, in December 2010. In May and December 2016, Tantech Holdings (Lishui) Co., Ltd., formerly Zhejiang Tantech Bamboo Technology Co., Ltd., a USCNHK’s wholly owned subsidiary, acquired 100% of Tantech Bamboo’s shares from USCNHK and five individuals.

Historical Timeline

Below is a brief timeline of key dates in our Company’s history since its formation.

	·	January 1998: Lishui Forasen Food Co. Ltd. is established.

	·	September 2001: Tantech Charcoal is established.

	·	October 2002: Tantech Bamboo is established as “Lishui Zhonglin High Tech Co., Ltd.” with registered capital of RMB 3.15 million.

	·	April 2003: Lishui Forasen Food Co. Ltd. is renamed “Lishui Forasen Green Industry Group” (the former name of Forasen Group Co., Ltd.).

	·	May 2003: Forasen Group acquires 60% of Tantech Bamboo.

	·	December 2005: (1) Tantech Bamboo reorganizes its structure (a) from a limited company to a shareholder company and (b) to increase registered capital to RMB 21 million, resulting in a decrease of Forasen Group’s interest to 41.24%; (2) Tantech Bamboo is renamed “Zhejiang Tantech Bamboo Technology Co., Ltd.”; (3) Zhengyu Wang becomes legal representative of Tantech Bamboo.

	·	September 2006: Tantech Bamboo acquires Tantech Charcoal by transferring shares from Forasen Group and natural shareholders to Tantech Bamboo. As a subsidiary, Tantech Charcoal’s business scope is exporting Forasen Group’s products to a multitude of countries worldwide.

	·	September 2007: Forasen Group’s interest in Tantech Bamboo increases to 44.25%.

	·	January 2008: Tantech Bamboo increases its registered capital to RMB 27 million, decreasing Forasen Group’s interest to 34.41%.

	·	July 2008 through April 2009: Several shareholders of Tantech Bamboo transfer their interests to Forasen Group, increasing its interest in Tantech Bamboo to 51.45%.

	·	September 2008: Tantech Energy is established and operates as subsidiary of Tantech Bamboo.

	·	October 2008: USCNHK is established as “Raymond & O/B Raysucess Co., Limited”.

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	·	October 2009: Lishui Forasen Green Industry Group is renamed “Forasen Group Co. Ltd.”.

	·	November 2010: THL is established as “Sinoport Enterprises Limited.”

	·	December 2010: (1) USCNHK is renamed “USCNHK Group Limited”; (2) Tantech Bamboo increases its registered capital to RMB 80 million, increasing Forasen Group’s interest to 95%; (3) Forasen Group transfers all of its interest in Tantech Bamboo to USCNHK.

	·	April 2013: THL is renamed “Tantech Holdings Ltd”.

	·	March 2015: THL completed an initial public offering of its Common Shares and listing on Nasdaq.

	·	April 2015: THL established a subsidiary Euroasia.

	·	July 2015: Euroasia established a subsidiary Jiamu.

	·	December 2015: Hangzhou Tanbo Technology Co., Ltd. was established.

	·	February 2016: Jiamu established a subsidiary Jiyi.

	·	April 2016: USCNHK established a new subsidiary as “Zhejiang Tantech Bamboo Technology Co., Ltd.”

	·	May 2016: USCNHK transferred 95% of Tantech Bamboo’s shares it owned to Zhejiang Tantech Bamboo Technology Co., Ltd.

	·	December 2016: Zhejiang Tantech Bamboo Technology Co., Ltd acquired the remaining 5% of Tantech Bamboo’s shares.

	·	May 2017: Zhejiang Tantech Bamboo Technology Co., Ltd changes its name to Lishui Tantech Energy Technology Co., Ltd, which in turn changed its name in July 2017 to Tantech Holdings (Lishui) Co., Ltd.

	·	On July 12, 2017, the Company acquired a 70% equity interest in Shangchi Automobile, formerly Suzhou E-Motors. The 70% equity interest comprises a 19% equity interest owned directly through Jiyi and a 51% equity interest owned through a series of contractual agreement with the owners of Wangbo.

	·	October 2017: Euroasia established a subsidiary Euroasia New Energy Automotive (Jiangsu) Co., Ltd.

	·	On December 14, 2017, the Company entered into a sale agreement and related agreements to transfer its EDLC carbon business (including intellectual property rights and equipment) to Zhejiang Apeikesi Energy Co., Ltd., a PRC start-up company controlled by Dr. Zaihua Chen, our former Chief Technology Officer.

	·	On January 10, 2018, the Company signed a share purchase agreement with Shanghai Shicai Minerals Co., Ltd. (“Shanghai Shicai”) to acquire all of the shares of Lishui Xincai Industrial Co., Ltd. (“Lishui XinCai”), a wholly-owned subsidiary of Shanghai Shicai, at a price of approximately $18.2 million (or RMB 120 million). Lishui Xincai owns 18% of the equity interests in Libo Haokun, so we indirectly hold a 18% stake in Libo Haokun.

	·	On October 24, 2018, the Company closed Khorgas Tantech Business Service Co., Ltd. and Khorgas Yabo Software Co., Ltd.

	·	On November 5, 2018, the Company closed Zhejiang Tantech Tourism Development Co., Ltd.

	·	On November 12, 2018, the Company closed Zhejiang Babiku Charcoal Co., Ltd.

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	·	On November 13, 2018, the Company established Shenzhen Yimao New Energy Sales Co., Ltd., a sales subsidiary through Shangchi Automobile (formerly known as Suzhou E-Motors).

	·	On June 26, 2019, the Company entered a share transfer agreement to sell all of its shares in its wholly-owned subsidiary Tantech Energy to an unrelated third party.

	·	On November 29, 2019, the Company signed an investment agreement with Jingning Zhonggang Mining Co., Ltd. (“Jingning Zhonggang”) to acquire 18% of the equity interest in Fuquan Chengwang, a wholly-owned subsidiary of Jingning Zhonggang, at a price of RMB 46.323 million, or $6.48 million.

	·	On December 31, 2019, the Company’s wholly owned subsidiary Tantech Bamboo transferred all of its shares in its wholly-owned subsidiary Tantech Charcoal to Lishui Xincai, the Company’s another wholly owned subsidiary Lishui Xincai.

	·	In January 2020, Lishui Jikang Energy Technology Co., Ltd. was established.

	·	In November 2020, Lishui Smart New Energy Automobile Co., Ltd. (“Lishui Smart”) and Zhejiang Shangchi New Energy Automobile Co., Ltd. (“Zhejiang Shangchi”) were established. Zhejiang Shangchi was subsequently renamed Zhejiang Shangnilai Technology Co., Ltd in January 2023.

	·	In November 2020, the Company launched driverless and autonomous street sweepers.

	·	In November 2020, the Company closed an offering with institutional investors, raising approximately $10 million in gross proceeds, before deducting placement agent fees and other standard offering expenses, from the sale of 6,060,608 of its Common Shares, priced at $1.65 per share, registered warrants to purchase up to 2,754,820 Common Shares in a registered direct offering, and unregistered warrants to purchase up to 3,305,788 Common Shares in a concurrent private placement.

	·	On September 23, 2021, the Company established Shanghai Wangju Industrial Group Co., Ltd.

	·	On October 21, 2021, EAG International Vantage Capital Limited, a subsidiary of the Company, entered into an Equity Acquisition Agreement with Zhifan Dai, an unrelated third party, to acquire all the shares of China East Trade Co., Limited without any consideration.

	·	On October 21, 2021, Shanghai Wangju Industrial Group Co., Ltd., a subsidiary of the Company, entered into an Equity Transfer Agreement with Shenzhen Shangdong Investment Co., Ltd., an unrelated third party, to acquire all the shares of Shenzhen Shangdong Trading Co., Ltd. without any consideration. As of the date of acquisition of China East Trade Co., Limited and Shenzhen Shangdong Trading Co., Ltd, First International Commercial Factoring (Shenzhen) Co., Ltd became the 100 holding company of the company.

	·	On November 13, 2021, the Company established Zhejiang Shangchi Medical Equipment Co., Ltd.

	·	On December 2, 2021, the Company entered into an underwriting agreement with Aegis Capital Corp., or the Underwriter, pursuant to which the Company agreed to sell to the Underwriter, in a firm commitment public offering, 21,120,509 Common Shares of the Company for a public offering price of $0.65 per share. The Company received approximately $13.7 million in net proceeds from the Offering before deducting the underwriting discount and estimated offering expenses payable by the Company. The Company also granted the Underwriter an option for a period of 45 days to purchase an additional 3,168,076 Common Shares solely to cover over-allotments.

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	·	On February 24, 2022, the Company’s Board approved a share consolidation of the Company’s authorized shares including issued and unissued Common Shares at the ratio of one-for-ten. The consolidation was effective on February 28, 2022 trading under a new CUSIP Number, G8675X123.

	·	On March 18, 2022, the Company closed an underwritten public offering of 20,000,000 Common Shares and prefunded warrants to purchase Common Shares pursuant to an underwriting agreement dated March 16, 2022 by and between the Company and Aegis Capital Corp. The gross proceeds to the Company were approximately $10.0 million, before deducting underwriting discounts and commissions and other estimated expenses payable by the Company. The pre-funded warrants were offered at the same $0.50 price per share as the Common Shares, less the $0.001 per share exercise price of each pre-funded warrant. On March 22, 2022, the underwriter of the Offering exercised its Over-allotment Option to purchase an additional 2,880,000 Common Shares at a price of $0.50 per common share. Total gross proceeds to the Company from the Offering, including the proceeds received from the prior closing and the exercise of the Over-allotment Option, were approximately $11.4 million, before deducting underwriting discounts, commissions, and other offering expenses payable by the Company.

	·	On May 19, 2022, the Company formed a wholly-owned subsidiary, EPakia Inc., under the laws of the State of Delaware. Based in the Mid-Atlantic region of the United States, EPakia is primarily focused on developing business in the United States and the international markets.

	·	In July 2022, the Company formed a wholly-owned subsidiary in Canada, EPakia Canada Inc. EPakia Canada was dissolved on April 3, 2024 as a cost-cutting measure due to insufficient operations.

	·	On October 28, 2022, the Board of Directors of the Company approved a share consolidation of the Company’s authorized shares including issued and unissued Common Shares at the ratio of one-for-twenty-four. The consolidation was effective on November 2, 2022 and reflected on Nasdaq and in the marketplace on November 9, 2022 trading under a new CUSIP Number, G8675X149.

	·	On February 21, 2023, the Company entered into a securities purchase agreement with certain non-U.S. purchasers, pursuant to which the Company issued and sold to the purchasers an aggregate of 1,000,000 Common Shares, par value $0.24 per share, at $2.80 per share for aggregate gross proceeds of $2,800,000.

	·	On June 23, 2023, the Company entered into a securities purchase agreement with certain non-U.S. purchasers, which was subsequently amended and restated in its entirety on June 26, 2023. Pursuant to the amended and restated security purchase agreement, the Company issued and sold to the purchasers an aggregate of 1,240,000 Common Shares, par value $0.24 per share, at $2.50 per share for aggregate gross proceeds of $3,100,000.

	·	On June 29, 2023, the Company entered into a securities purchase agreement with Streeterville Capital, LLC (“Streeterville”), a Utah limited liability company, pursuant to which the Company issued an unsecured promissory note dated June 29, 2023, in the original principal amount of $2,160,000, convertible into Common Shares of the Company for $2,000,000 in gross proceeds.

	·	On August 10, 2023, Lishui Xincai Industrial Co., Ltd (“Lishui Xincai”), a wholly owned subsidiary of the Company, formed a wholly-owned subsidiary, Zhejiang Zhuguxingqi Technology Co., Ltd. (“Zhuguxingqi”). Zhuguxingqi primarily engages in bamboo charcoal products and wood products trading business.

	·	On December 29, 2023, Lishui Xincai, a wholly owned subsidiary of the Company, entered into a share transfer agreement with Lishui Chida Logistics Co., Ltd (“Lishui Chida”), an unrelated third party, pursuant to which Lishui Xincai sold all of the shares of its wholly owned subsidiary, Lishui Jikang Energy Technology Co., Ltd and Lishui Jikang’s wholly owned subsidiary, Tantech Bamboo, for RMB 5,000,000 (approximately $0.7 million).

	·	On March 16, 2024, Lishui Xincai entered into a share transfer agreement with Lishui Chida, pursuant to which Lishui Xincai sold all of the shares of its wholly-owned subsidiary, Tantech Charcoal, for approximately RMB1.8 million ($0.2 million).

	·	On April 23, 2024, the Board of Directors approved to change the maximum number of shares that the Company is authorized to issue from 500,000,000 Common Shares of $0.24 par value to an unlimited number of shares with no par value each. The Company’s amended and restated memorandum and articles of association were filed and effective with the Registrar of Corporate Affairs of the British Virgin Islands on April 25, 2024.

	·	On May 1, 2024, the Company completed a private placement and sold an aggregate of 4,200,000 units and pre-funded units at a purchase price of $0.50 per unit (less $0.0001 per pre-funded unit) pursuant to a securities purchase agreement dated April 24, 2024 with certain institutional investors. The offering was conducted pursuant to a placement agency agreement dated April 22, 2024, between the Company and the placement agent, Maxim Group LLC. The gross proceeds to the Company were approximately $2.1 million, before deducting the placement agent fees and other expenses. Each unit and pre-funded unit consists of one common share (or pre-funded warrant), two Series A warrants each exercisable for one common share at an exercise price of $0.75 per common share and one Series B warrant to purchase such amount of Common Shares as will be determined on the Reset Date (as defined in Series B Warrant). The Series A and B warrants were exercisable upon issuance and have a term of 5.5 years from the issuance date. The exercise price and number of shares issuable under the Series A warrants are subject to adjustment and the number of shares issuable under the Series B warrant will be determined on the Reset Date subject to a pricing floor of $0.137 per share. The Company agreed to file a resale registration statement covering all of the registrable securities on behalf the purchasers pursuant to a registration rights agreement entered into with the purchasers in connection with the Private Placement.

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	·	On September 5, 2024, the Company entered into an exchange agreement with Streeterville Capital, LLC. Pursuant to the agreement, the Company issued an unsecured promissory note in exchange for the cancellation of the convertible promissory note issued to the lender on June 29, 2023 pursuant to Section 3(a)(9) of the Securities Act.

	·	On December 3, 2024, the Company formed a wholly-owned subsidiary, GOHOMEWAY INC, a California corporation (“Gohomeway Holding”). Gohomeway Holding was renamed Tanhome Inc on May 7, 2025. It is a holding company and does not conduct substantial business.

	·	On December 3, 2024, Gohomeway Holding formed a wholly-owned subsidiary, GOHOMEWAY GROUP INC, a California corporation (“Gohomeway”). Gohomeway was renamed Tanhome Group Inc on May 7, 2025. It primarily engages in sustainable construction materials wholesale and trading business in the Company’s operational expansions in the U.S.

	·	On December 13, 2024, the Company formed a wholly-owned subsidiary, USCNHK Holding LIMITED, a Hong Kong company limited by shares (“USCNHK Holding”). USCNHK Holding is a holding company and does not conduct substantial business.

	·	On December 25, 2024, USCNHK Holding entered into a share transfer agreement with China Loan Group Co., Ltd., an unrelated third party. Pursuant to the agreement, USCNHK agreed to sell all of the equity it held in its wholly owned subsidiary, USCNHK Group Limited (“USCNHK”), a Hong Kong holding company, to the buyer for HKD10,000 (approximately $1,286). As a result of the sale, all of USCNHK’s wholly owned PRC subsidiaries, Tantech Holdings (Lishui) Co., Ltd., Hangzhou Tanbo Technology Co., Ltd. and Lishui Xincai Industrial Co., Ltd., were transferred to the buyer. Prior to the transfer, those PRC subsidiaries did not conduct any substantial business. The purpose of sale was to reduce the costs associated with maintaining the disposed subsidiaries.

	·	On January 7, 2025, the Company entered into inducement agreements (the “Inducement Agreements”) with certain holders of the Company’s Series A Warrants, exercisable for an aggregate of 16,046,466 of the Company’s Common Shares, originally issued pursuant to a securities purchase agreement dated April 22, 2024 and having a then-exercise price of $0.1612. Pursuant to the Inducement Agreements, the Company agreed, as consideration for exercising all or part of the existing warrants held by any such holder, to issue to such holder one or more new Series A common share purchase warrants, exercisable for up to a number of Common Shares equal to 150% of the number of existing warrants shares issued upon exercise of the existing warrants pursuant to the terms of the Inducement Agreements (such warrants, the “New Warrants” and such Common Shares issuable upon exercise thereof, the “New Warrant Shares”). The New Warrants are exercisable immediately following issuance and have an exercise price of $0.20. The New Warrants will expire 5.5 years from the date of issuance. The exercise price and the number of New Warrant Shares are subject to adjustment upon the occurrence of certain events, including stock dividends, share splits, business combination or similar recapitalization transactions, or other similar transactions. Additionally, the exercise price will be adjusted on the Reset Date (as defined in the New Warrant) and upon a Share Combination Event (as defined in the New Warrant). Upon such reset of the exercise price or adjustment upon a Share Combination Event, the number of New Warrant Shares will be proportionately increased such that the aggregate exercise price payable for the adjusted number of New Warrant Shares will be the same as the aggregate exercise price on the date of issuance for the New Warrant Shares. Any exercise price adjustment and reset will be subject to a floor price equal to $0.1612 per share (adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction).

	·	On January 21, 2025, the Board approved a consolidation of the Company’s authorized and issued Common Shares at the ratio of one-for-forty. The share consolidation was effected on February 13, 2025 on the Nasdaq Capital Market and following the share consolidation, the Company’s Common Shares are traded under a new CUSIP Number, G8675X156.

	·	On April 24 2025, Euroasia entered into a share transfer agreement with African Forest Group Limited, an unrelated third party, to acquire 85% of the equity of Xintong International Trading Limited (“Xintong”), a Hong Kong company wholly owned by the seller prior to the transaction, for RMB488,038,338.0 (approximately $69.8 million). Xintong owns 100% of the shares of Shanghai Senhuixin Technology Co., Ltd, a PRC holding company, which owns 30% of Shandong Liansen Ecological Development Co., Ltd (“Shandong Liansen”). Shandong Liansen owns and manages certain land use rights, and forests and plants that can be used for Chinese herbal medicine cultivation and flower cultivation. The company had paid (i) an aggregate of $53.8 million through transferring its accounts receivable to the seller and (ii) $9.7 million in the form of Tether (USDT), with the remaining balance outstanding. Due to the delay in the commercial development of the forests assets by Shandong Liansen, on December 18, 2025, the parties to the original agreement renegotiated and entered into a second agreement terminating the original acquisition transaction. Pursuant to the December 2025 termination agreement, the seller is required to return $7.5 million in accounts receivable previously received from the buyer and $58.6 million of the remaining consideration received from Euroasia by March 31, 2028. Pursuant to the termination agreement, the seller also agreed to pay Euroasia fund usage fees.

	·	On May 6, 2025, Jiamu entered into an Equity transfer agreement with Lishui Damushan Tea Co., Ltd. (“Damushan”), an unrelated third party, to transfer and sell all of the equities of Wangbo and Jiyi to the buyer for RMB 81,600,000.0 (approximately $11.7 million) (the “EV Business Sales Agreement”). Wangbo and Jiyi own 51% and 19%, respectively, of Shangchi Automobile and its subsidiary, Shenzhen Yimao. As a result of the transaction, the Company no longer conducts any EV segment business operations.

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	·	On June 30, 2025, Jiamu and Damushan entered into a supplemental Agreement to the EV Business Sales Agreement. Pursuant to the supplemental agreement, the parties agreed that RMB 81.0 million of the original purchase price of RMB 81.6 million was the value of the automobile production license based on the effective use of the production license. As a result of Jiamu’s inability to legally transfer the production license to the purchaser, the parties agreed to amend the purchase price of the equity of the entities conducting EV business to RMB0.6 million ($85,799), with the ownership of the automobile production license remaining with Jiamu.

	·	On August 1, 2024, the Company entered into a note purchase agreement with Streeterville, pursuant to which the Company issued and sold to Streeterville a promissory note in the original principal amount of $2,160,000.00 (the “August 2024 Note”) for $2,000,000.00 in gross proceeds. The note bears annual interest of 7% and has a term of twelve months. The note carries an original issue discount of $140,000.00 and includes $20,000.00 for Streeterville’s legal fees, accounting costs and other transaction expenses. Commencing six months from the Purchase Price Date, Streeterville has the right to redeem up to $500,000.00 of the outstanding balance per calendar month. While the note is outstanding, the Company is required to comply with the applicable requirements under the Exchange Act, maintain its listing on NASDAQ or New York Stock Exchange, and refrain from making any Restricted Issuances (as defined in the Purchase Agreement) without the Streeterville’s prior written consent. Restricted Issuances include, subject to limited exceptions, issuance of securities with a conversion right, a reset feature, otherwise varying with the market price of the Common Shares, or similar exchanges or settlements.

	·	On October 14, 2025, the Company entered into a note purchase agreement with Streeterville, pursuant to which the Company issued and sold to Streeterville a promissory note in the original principal amount of $3,230,000.00 (the “2025 Note”) for $3,000,000.00 in gross proceeds. The note bears annual interest of 7% and has a term of twelve months. The note carries an original issue discount of $210,000.00 and includes $20,000.00 for Streeterville’s legal fees, accounting costs, and other transaction expenses. Commencing six months from the Purchase Price Date, Streeterville has the right to redeem up to $750,000.00 of the outstanding balance per calendar month. While the note is outstanding, the Company is required to comply with the applicable requirements under the Exchange Act, maintain its listing on NASDAQ or New York Stock Exchange, and refrain from making any Restricted Issuances (as defined in the Purchase Agreement) without the Streeterville’s prior written consent. Restricted Issuances include, subject to limited exceptions, issuance of securities with a conversion right, a reset feature, otherwise varying with the market price of the Common Shares, or similar exchanges or settlements.

	·	On October 23, 2025, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company issued and sold to the purchasers an aggregate of 3,614,464 Common Shares, Series C warrants (the “Series C Warrants”) to purchase 10,843,392 Common Shares (the “Series C Warrant Shares”), and Series D warrants (the “Series D Warrants”) to purchase 10,843,392 Common Shares in a private placement for gross proceeds of $6.0 million. The Company used the proceeds from this Offering for working capital and general corporate purposes.

	·	On December 30, 2025, at the Company’s annual meeting of shareholders, shareholders of the Company approved to (a) reclassify the Company’s authorized shares from (i) an unlimited number of Shares of no par value each, to (ii) an unlimited number of Class A shares of no par value each, with one vote per share (the “Class A Shares”), and an unlimited number of Class B shares of no par value each, with fifty votes per share (the “Class B Shares”), (b) to redesignate all the then existing authorized and issued shares of the Company as Class A Shares, except for 1,142 shares, and to redesignate all the 1,142 shares held by TANBSOK GROUP LTD, a Cayman Islands company controlled by the Chairwoman of the Board of the Company, as Class B Shares, and (c) to amend and restate the memorandum and articles of association of the Company to reflect the reclassification and redesignation of the Company’s common shares into Class A Shares and Class B Shares.

	·	On March 23, 2026, the Company entered into a sales agreement (the “ATM Agreement”) with Joseph Stone Capital, LLC (the “Sales Agent”). Pursuant to the ATM Agreement, the Company may offer and sell, from time to time, through the Sales Agent, up to $2,150,000 of the Company’s Common Shares pursuant to a prospectus supplement dated March 23, 2026 to the Company’s shelf registration statement on Form F-3 (File No. 333-274274), which was declared effective by the SEC on September 11, 2023. No Common Shares have been sold under the ATM Agreement.

	·	On March 26, 2026, The Nasdaq notified the Company that the minimum closing bid price per share for the Company’s Common Shares was below $1.00 for a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). The Company has a compliance period of 180 calendar days, or until September 22, 2026 to regain compliance with Nasdaq’s minimum bid price requirement. In the event the Company does not regain compliance by September 22, 2026, the Company may be eligible for an additional 180 calendar day grace period. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, including by effecting a reverse stock split, if necessary. If the Company meets these requirements, Nasdaq will inform the Company that it has been granted an additional 180 calendar days. However, if it appears to Nasdaq that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq will provide notice that its securities will be subject to delisting.

	·	On April 2, 2026, the Company closed a registered direct offering and concurrent private placement of an aggregate of 7,166,671 units at a purchase price of $0.30 per unit pursuant to a securities purchase agreement dated March 31, 2026 with certain non-U.S. investors. The gross proceeds to the Company were approximately $2.1 million, before deducting the placement agent fees and other expenses. Each unit consisted of one Common Share, one Series E warrant each exercisable for three Common Shares at an exercise price of $0.30 per share and one Series F warrant each exercisable for three Common Shares at an exercise price of $0.35 per share. The Common Shares were offered pursuant to a prospectus supplement dated March 31, 2026 to the Company’s shelf registration statement on Form F-3 (File No. 333-274274), which was declared effective by the SEC on September 11, 2023. The private placement of the warrants was conducted pursuant to Regulation S under the Securities Act of 1933, as amended.

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B. Business Overview

We develop, manufacture and trade bamboo-based charcoal products for household purification, agricultural and cleaning uses. We have grown over the past decade to become a pioneer in charcoal products made from carbonized bamboo. Historically we have been a specialized manufacturer of bamboo charcoal-based products with primary business focus on low emission BBQ charcoal and other charcoal consumer products. After completing a series of reorganizations and business strategic changes, through our operating subsidiaries, today we primarily engage in development, production and distribution of various charcoal products, as well as trading bamboo charcoal products. Our products include purification and deodorization products, and household cleaning products designed for China domestic market. We also have investments in mining exploration and forest assets that can be used for Chinese herbal medicine and flower cultivations. In July 2017, we acquired 70% of the equity of Suzhou E Motors Co, which was later renamed as Shangchi Automobile, a vehicle manufacturer based in Zhangjiagang City, Jiangsu Province. Shangchi Automobile had developed a variety of electric vehicles and specialty vehicles, such as driverless street sweepers. In May 2025, we divested all of the equity we held in the subsidiaries conducting electric vehicle business to a third party and discontinued the electric vehicle segment operations. In 2022, we expanded into biodegradable packaging business and commercial factoring service business. In 2023, we merged our biodegradable packaging business into our consumer products segment. In 2025, we discontinued offering commercial factoring services to customers with accounts receivable. We launched our operations in North America in 2022 and entered the construction materials industry through the establishment of U.S. subsidiaries based in California in 2024.

Our consumer products include purification and deodorization products, household cleaning products and barbecue charcoals designed for domestic market. Purification and deodorization products and household cleaning products are sold under the brand name “Charcoal Doctor.” Purification and deodorization products include air purification products, deodorant products and bamboo vinegar. Household cleaning products include toilet cleaning products, kitchen cleaning products, personal care products and clothing detergent products.

The largest category of our consumer products is purification and deodorization products. Made from dry distilled carbonized bamboo, our purification and deodorization products have the ability to absorb harmful substances and air-borne odors, including benzene, formaldehyde, ammonia and carbon tetrachloride. These products also come in many shapes and varieties for a multitude of purposes including pillows, cushion insoles, wrist pads, clothes hangers and other products. Bamboo vinegar is an additive that can be used in food processing, medical and hygiene products and fertilizer. Although it currently only accounts for a small portion of our revenue, bamboo vinegar products are crucial for us to maintain close ties with the agricultural industry which we believe will be a key area for growth in the coming years. Cleaning products, including disinfectants, detergents, lotions, specialized soaps and toilet cleaners are relatively new in our consumer products but provide us another opportunity for growth. Purchased from third parties and sold through our distribution channel, barbecue charcoals designed for China’s domestic market have also been a key source of revenue for us in recent years.

Below diagram depicts the main products we offer, trade or wholesale distribute in the China domestica markets and North America markets:

We oversee a national sales network that has a presence in 19 cities throughout China for our charcoal products. Through distributors, our charcoal products are also sold in Japan, South Korea, Taiwan, the Middle East and Europe.

In addition to our bamboo charcoal products, we also derive revenues from our trading activities, which primarily relate to industrial purchases and sales of charcoal.

We are headquartered in the bamboo-rich southwest of Zhejiang Province, in the city of Lishui. Zhejiang province, located in southeastern coastal China, is China’s seventh largest province in population, with 67.01 million residents as of the end of 2025. The first province in China without any counties in the poverty-county list of the central government, Zhejiang has become one of the wealthiest and most commercially successful provinces in China. In 2025, Zhejiang Province realized GDP of RMB9.4545 trillion, an increase of 5.5% over the previous year.

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Lishui is a prefecture-level city located in southwest Zhejiang province. Approximately 2.532 million residents live in the city as of the end of 2025, and city-wide GDP is approximately RMB230.14 billion in 2025. Lishui’s primary industries include wood and bamboo production, ore smelting, textile, clothes making, construction materials, pharmaceutical chemistry, electronic machinery and food processing. As to wood and bamboo production, approximately 81.7% of Lishui prefecture is covered with forest, giving it the nickname “The Foliage Ocean of Zhejiang.”

Zhejiang Province

City of Lishui

We rely on a combination of patent, trademark and trade secret laws and non-disclosure agreements and other methods to protect our intellectual property rights. We currently own five patents and eighteen trademarks in China covering our bamboo charcoal production.

For the years ended December 31, 2025, 2024 and 2023, three, two, and three major suppliers accounted for approximately 48%, 56% and 70%, respectively, of the total purchases by our subsidiaries. Because we purchase a material amount of our raw materials from these suppliers, the loss of any such suppliers could result in increased expenses for our company and result in adverse impact on our business, financial condition and results of operations.

Bamboo and Bamboo Charcoal

As a company primarily focused on bamboo charcoal, our business is in a sub-part of China’s bamboo industry. Government policies that encourage the use of bamboo also benefit the bamboo charcoal industry. Accordingly, we provide a brief overview of bamboo and those elements of China’s bamboo industry, insofar as they have an effect on the bamboo charcoal industry in general and our company in particular.

Bamboo

Bamboo plants are some of the fastest growing plants in the world, with some varieties growing more than three feet per day. Moreover, Bamboo can be re-grown quickly following harvesting, ensuring high frequency utilization without shortages. Unlike trees, individual bamboo culms emerge from the ground at their full diameter and grow to their full height in a single growing season of three to four months. Over the next two to five years, fungus begins to form on the outside of the culm, which eventually penetrates and overcomes the culm. Eventually the fungal growths cause the culm to collapse and decay. As a result, bamboo culms generally have life cycles of up to ten years, at which point they must be cut down in order to preserve the environment of the surrounding forest. Optimal quality bamboo culms for carbonization are cut at five years of age. Additional bamboo can be grown in the same area where previous culms grew.

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Bamboo is considered environmentally friendly because it takes in substantial amounts of carbon dioxide and gives off oxygen as it grows. Indeed, bamboo sequesters more carbon dioxide than an equivalent region of plantation trees. Moreover, harvesting of bamboo is considered more environmentally friendly than allowing it to live through the full life cycle, as such harvesting maximizes the amount of carbon dioxide the bamboo can sequester because of the effects of fungus noted above.

According to the Opinions on Accelerating the Innovation and Development of the Bamboo Industry jointly issued by ten departments including the State Forestry and Grassland Administration of China in 2021, by 2035, the total value of China bamboo industry will exceed 1 trillion yuan. The total value of China’s bamboo industry was approximately RMB520 billion as of 2025. As of 2025, it employed more than 29 million people and has become a pillar industry of economic development for China’s main bamboo producing areas and a major income source for peasants’ families. Given bamboo’s importance in China, we believe that favorable government policies and regulations encouraging the advancement of bamboo technology in China generally will create an environment favorable to our increased production of bamboo-based charcoal products. The Chinese government is also working to develop its bamboo industry to meet its goals in environmental protection and green economic development, as planting bamboo is both profitable and environmentally-friendly according to the International Network for Bamboo and Rattan (“INBAR”). Moreover, given the central government’s goal to reduce carbon dioxide emissions per unit of GDP by 60 to 65 percent by 2030 compared to 2005, we expect the bamboo technology industry to continue to be important to the country’s long-term planning.

In 2023, the National Development and Reform Commission issued a “Three-Year Action Plan for Accelerating the Development of “Replacing Plastics with Bamboo”.” The Action Plan sets a target for 2025: to preliminarily establish the “replacing plastic with bamboo” industrial system, further elevate product quality, diversity, industrial scale, and overall benefits, with a significant increase in the market share of key products.

The utilization of bamboo resources has attracted great attention from national leaders and relevant government departments. Driven by the goal of “double carbon”, “replacing plastic with bamboo” has become a general trend. Zhejiang provincial government attaches great importance to the development of the bamboo industry, issued a series of policies and measures aimed at promoting the high-quality development of the bamboo industry. In February 2024, the Zhejiang Forestry Bureau issued a “replacing plastics with bamboo+ development and implementation program”. Pursuant to the action plan, Zhejiang will promote “replacing plastics with bamboo” by fostering industrial ecosystems, driving innovation, and securing resources for development.

According to statistics from INBAR, China has more than 7.5 million hectares for bamboo production and over 500 bamboo species.

According to the National Bureau of Statistics of China, in 2025, the total output value of China’s timber and bamboo mining industry was about RMB 3.4 trillion. In 2025, the total output value of the forestry industry reached RMB 11 trillion, and the output value of the bamboo industry was just over RMB 520 billion, which accounted for only 4.7% of the output value of the forestry industry.

During a period of rampant deforestation, China put in place restrictions on harvesting of natural wood and encouraged the country to make more use of bamboo. Under the National Forest Protection Program (“NFPP”), China implemented natural forest logging bans that covered 17 provinces in China. These bans required consumers of charcoal to look to other sources for creation of charcoal than the natural trees they were most familiar with using. During this time, bamboo charcoal became a viable alternative in the country.

Bamboo has many desirable characteristics compared to timber-based products:

	·	Culms are ideally allowed to reach 5-7 years of maturity prior to full capacity harvesting. The clearing out or thinning of culms, particularly older decaying culms, helps to ensure adequate light and resources for new growth;

	·	Commercial growers can annually harvest between one-quarter and one-third of a bamboo grove that is at least three years old. Harvesting at such rates allows continuous, sustainable harvesting;

	·	Bamboo will re-grow from same rootstalk (rhizome);

	·	Plant tends to be drought tolerant; and

	·	Bamboo minimizes carbon dioxide gases and generates up to 35% more oxygen than an equivalent area of trees. One hectare of bamboo can sequester 62 tons of CO2 /year, while one hectare of young forest can sequester 15 tons of CO2 /year.

The global bamboos market size was valued at $74.5 billion in 2025 and is expected to reach over USD $102.8 billion by 2032, growing at a CAGR of around 4.7% during the forecast period from 2025 to 2032. There are about 39 genera of bamboo and more than 837 species in China. The results of the 2025 National Land Change Survey show that there are 697.79 million hectares of bamboo forest land nationwide. China is leading the world’s bamboo industry in its number of varieties, amount of bamboo reserves, and production output, according to Zehui Jiang, co-chair of INBAR’s board of trustees.

Zhejiang Province is a large province in the development of bamboo industry, leading in production, processing and trade. In recent years, under the leadership of the provincial government, various poverty alleviation policies have been introduced successively, and the scale of the industry has been expanding and the economic benefits have been improving, promoting the development of mountainous areas and increasing the income of farmers. In 2023, the national production of bamboo material was 3.418 billion sticks, of which the production of bamboo villages in Zhejiang Province was 229 million sticks, and the production of bamboo material in Zhejiang Province accounted for 6.7% of the total national production. In 2023, the market scale of bamboo products in Zhejiang Province was approximately RMB 30.80 billion, of which Jiaxing and Hangzhou areas were the largest demand markets, accounting for 16.47% and 16.15% respectively.

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Bamboo Charcoal

Bamboo charcoal has been documented in China as early as 1486 AD during the Ming Dynasty in China. Bamboo charcoal has traditionally been used as a heating source, in replacement of wood, coal or wood charcoal. As a source of heat, bamboo charcoal has a calorific value approximately half that of an equivalent weight of oil, and similar to the calorific value of wood. In addition to being an efficient source of heat, bamboo charcoal is considered by the International Tree Foundation to be less polluting than wood charcoal, because it burns more cleanly due to a lower percentage of volatile matter. Smoke and pollution in charcoal burning relate largely to moisture content and volatile matter. While careful processing can control the moisture content, the ratio of volatile matter is affected by the source of charcoal.

Because of the relatively higher pollution levels in wood charcoal, it is estimated that the burning of wood fuel claims the lives of an estimated 4 million people every year who inhale the smoke. Moreover, it takes between seven and ten tons of wood to produce one ton of wood charcoal, compared with four tons of bamboo to produce one ton of bamboo charcoal.

In addition to use as a heating source, bamboo charcoal has applications as an adsorbent, deodorizer, dehumidifier, purifier and electrical conductor. Nonactivated bamboo charcoal is a versatile mineral matter with great porosity and consequently high absorption ability. Bamboo charcoal’s porous surface area makes it an ideal air and water purifying agent, odor absorbent, additive, dehumidifier and electromagnetic wave absorber (electromagnetic waves from computers, mobile telephones and other electronics can be conducted through bamboo charcoal to dissipate their energy in the charcoal pores). While wood charcoal’s surface area may be as low as 20 m 2 /g, bamboo charcoal generally ranges from 300-600 m 2 /g.

While bamboo charcoal has a high absorptive capacity after carbonization, it becomes even more effective after activation. Activated bamboo carbon is bamboo charcoal that has been taken through an extra step greatly increasing its absorptive abilities. Activated bamboo charcoal can be used for cleaning the environment, absorbing excess moisture and producing medicines.

The carbonization process occurs in the absence of oxygen and produces a brown-black liquid containing more than 200 organic compounds known as bamboo vinegar, or pyroligneous acid. Following sedimentation, two distinct layers appear: a light yellow-brown liquid (clarified bamboo vinegar) which can be refined to produce acetic acid, propionic acid, butyric acid, carbinol and organic solvents, and a viscid oily liquid (bamboo tar) containing large amounts of phenol substances. Bamboo vinegar is found in sanitary and health products as well as a range of horticultural fertilizers and organic solutions.

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Our Products

Our products are produced from bamboo charcoal or bamboo charcoal byproducts. Because of the lifespan and fast growth rate of bamboo, our products are considered environmentally friendly. Our facilities have received ISO 14001:2004 certification, which reflects our focus on measuring and managing our environmental impact.

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Charcoal Doctor Products

Our primary consumer brand is Charcoal Doctor (“Tan Boshi” or “Dr. Tan” in Chinese). In processing the charcoal products, the primary byproducts are solid charcoal and charcoal vinegar. We make use of both the solid and liquid byproducts in our Charcoal Doctor products.

Our Charcoal Doctor brand products have been the primary source of our revenue over the last few years. Charcoal Doctor products are sold throughout China and stocked by many supermarkets and specialty shops in Zhejiang Province and other provinces. Several years ago, we sought to protect and grow our market share by pricing our products aggressively, often offering them at rates 10-15% below those of our competitors. As our brand visibility improved, our pricing aligned with that of our competitors. Our Charcoal Doctor products’ gross profit margins average 26%, largely due to our industrialized and automated production processes. We plan to expand product lines in the coming years to take advantage of the many uses of bamboo charcoal and vinegar. Charcoal Doctor products can be categorized according to their physical state of liquid or solid.

Our solid charcoal products are primarily used for purification and deodorization. These consumer products are made from dry distilled carbonized bamboo, and have the ability to absorb harmful substances and foul odors from the air, including benzene, toluene, ammonia and carbon tetrachloride. The primary ingredient of these products, activated charcoal, is an adsorbent. Our solid Charcoal Doctor products generally fit within three categories: (1) charcoal bags, primarily used as air purifiers and humidifiers, (2) charcoal deodorants and (3) toilet cleaning disks. Our primary Charcoal Doctor solid products include the following:

	·	Air purifiers and humidifiers

	·	Automotive accessories for air purification

	·	Underfloor humidity control

	·	Pillows and mattresses

	·	Wardrobe deodorizers

	·	Mouse pads and wrist mats

	·	Refrigerator deodorant

	·	Charcoal toilet cleaner disks

	·	Liquid charcoal cleaner

	·	Shoe insoles

	·	Decorative charcoal gifts

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Samples of the range of solid Charcoal Doctor products are pictured below.

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In addition to providing solid charcoal, the carbonization process also results in a liquid byproduct called bamboo vinegar. Bamboo vinegar is used in disinfectants, detergents, lotions, specialized soaps, toilet cleaners and fertilizers. We have also adapted our bamboo vinegar for use in a variety of agricultural applications:

	·	Fruit, vegetable, and other plant fertilizers

	·	Soil conditioners and sweeteners

	·	Flower nutrients

	·	Toilet cleaning liquid detergent and solid disks

	·	Hand washing sanitation

Samples of the range of liquid Charcoal Doctor products are pictured below.

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We believe liquid products are crucial to maintaining close ties with the agricultural industry, which we expect will be a key area for growth in the coming years. We have expanded in this area by adding production lines for daily health products, such as toilet-cleaning products, hand washing products, as well as other everyday household items based on silver ion anti-bacterial nanotechnology.

We use this silver ion nanotechnology for sterilization to improve the effectiveness of our sanitation and purification products. We purchase silver ion nano powder from third parties to add into our products. We use our own formulas for the purification and sanitation products that incorporate such powder.

We have developed two kinds of products that use our silver ion nanotechnology. Our detergent products are based on bamboo vinegar and are supplemented by the introduction of silver ion nano powder. These products are used for washing clothes and are in the trial stage. We began trial sales of our silver nano detergent products in Yantai (Shandong Province), Lishui (Zhejiang Province), Chengdu (Sichuan Province) and Zhengzhou (Henan Province) in November 2012. We have concluded our trial sales in Lishui and Chengdu (and plan to conclude sales in Yantai upon the exhaustion of current trial sales inventory), and our preliminary conclusions are that customers liked the product but were less enthusiastic about the packaging. As a result, we adjusted our packaging in preparation for full-scale sales. At the same time as we have sold such products under our Charcoal Doctor brand name in China, we also sold these products to Africa and the Middle East. Because silver nano decomposes and turns black after encountering light, it will turn black in the detergent, which is not good in appearance, but the washing effect is very good. In addition, the company would need to invest significantly money in brand development. Considering these factors, silver ion laundry detergent will no longer be produced.

Our silver ion bamboo charcoal bag products are used for odor absorption and air purification. We combine our charcoal powder products with silver ion nano powder to achieve a charcoal bag that may be stored in a wider variety of locations. If our traditional bags are stored in conditions that are too damp and warm, mold or mildew may grow. Our silver ion nano products are able to fight the growth of mold and mildew, allowing them to be used in damp conditions without problem. We have begun to promote and sell limited numbers of such bags in connection with our sales of traditional charcoal bags. We are promoting these bags in anticipation of adding such products to our portfolio of products for sale in supermarkets and other stores. Our distributors typically invite us to apply in June or July to update the products we will offer for sale in their customer stores, and we are required to pay a fee for shelf space at such time. Accordingly, we plan to increase demand for our silver ion nano products in anticipation of adding them to the list of products we sell this year. As we will make these silver ion nano charcoal bags available everywhere we offer our traditional charcoal bags, we will leverage our existing sales and distribution channels to introduce these products to the market.

Discontinued Operations – Electric Vehicle Business

On July 12, 2017, the Company acquired a 70% equity interest in Shangchi Automobile, formerly Suzhou E-Motors. Suzhou E-Motors develops, manufactures, and sells electric vehicles and fuel vehicles. The company also offered solar cells, lithium-ion batteries, auto parts, and electric control systems in China.

Shangchi Automobile has developed a full range of electric buses and a variety of specialty vehicles. It has developed ten models of electric buses, electric logistics cars, and electric specialty vehicles, such as high-speed brushless cleaning cars, electric cleaning cars, special emergency vehicles, and funeral cars. In 2023, we produced 436 fuel midibuses of which 270 were sold domestically and 166 were exported, and we also sold 321 fuel midibuses on behalf of other vehicle manufacturers for commission income. In 2024 we produced 297 fuel midibuses of which 246 were sold domestically and 51 were exported, and we also sold 48 fuel midibuses on behalf of other vehicle manufacturers for commission income.

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The vehicles produced by Shangchi Automobile have included tourist buses, logistics vehicles, urban sanitary vehicles, fuel buses and Electric Street Sweepers.

We sold our EV business to a third party in May 2025 through the transfer and sale all of the equity we held in the subsidiaries conducting EV operations, including Wangbo and Jiyi and their subsidiaries. As a result of the divestment, we no longer conduct any EV business operations.

Other Products and Services

In 2022, we started two new lines of business—biodegradable packaging business and commercial factoring service. Biodegradable packaging is a type of packaging that is designed to break down naturally in the environment, without leaving behind harmful pollutants or waste. We generated approximately $nil, $0.1 million and $0.7 million in revenue from biodegradable packaging business in fiscal 2025, 2024 and 2023, respectively. We have also offered commercial factoring services to customers seeking financing for their receivables. We generated approximately $0.6 million, $1.8 million and $2.2 million of financing interest income in fiscal 2025, 2024 and 2023, respectively. Due to the uncertainties and costs involved in developing these business initiatives, our operations in these product lines have slowed down or paused in fiscal 2025, as we sought to leverage our resources to new business platforms.

In 2025, we expanded our operations in the U.S. into the construction material industry. Our U.S. subsidiaries expect to focus on wholesale and trading of construction materials, primarily including basic building products, such as timber and metal products, interior finishing products, such as flooring, tiles, cabinetry, bathroom fixtures and wall coverings, and construction related products, such as hardware and structural components. There can be no assurance that such new business operations will be successful or profitable as planned.

Raw Materials

Our primary raw material for charcoal products is bamboo charcoal. Each year, we purchase bamboo charcoal locally that has been prepared to our specifications from between 15 and 20 suppliers located in and around Lishui. The majority of such purchases comes from approximately two suppliers. In recent years, due to the rising awareness of environmental protection, the Zhejiang province is taking a series of measures to improve water environment, which has led to a massive closure of small-sized bamboo charcoal manufacturers, In addition, we were unable to purchase wood charcoal briquettes from a large supplier, Tahe Xingzhongda Carbon Co. in 2016, due to shortage of supply. However, we have taken actions to remedy such matters, in particular to our primary raw material, bamboo charcoal. Therefore, we do not expect any shortage supply from bamboo charcoal in coming years.

We also purchase bamboo vinegar for use in our liquid products. Our bamboo vinegar suppliers in some but not all cases are the same as our bamboo charcoal suppliers. As the supply of bamboo vinegar is directly related to the supply of bamboo charcoal, we believe we have a steady supply of bamboo vinegar given the prevalence of bamboo in the Lishui area. Accordingly, we do not anticipate any lack of availability of bamboo vinegar for our liquid products.

We purchased wood charcoal briquettes from a supplier in Heilongjiang province for use in our OEM BBQ charcoal products before. As such products have low technical requirements and are typically used for heating and cooking purposes, we have found that competing on price makes purchasing wood-based charcoal for such purposes suit our customers’ requirements. Our primary source for wood charcoal briquettes, which we rebrand under our Algold brand for sale in China, is Tahe Xingzhongda Carbon Co. in Daxing Anling, Heilongjiang province. In 2016, we were unable to purchase raw material from Tahe Xingzhongda Carbon Co. It caused major decline in our domestic charcoal briquettes sale. While we have adjusted our purchasing strategies to look for alternatives, due to tightening environmental control in local authority, we expect the cost of wood charcoal briquettes would increase in the coming years., Because of too few profits, the Company stopped selling the BBQ in 2020.

In addition to our primary raw materials, we also purchase small amounts of other raw materials, such as silver ion nano powder, fabric for charcoal bags, packaging materials, and coconut charcoal. We do not anticipate any difficulty in replacing the suppliers of any of such minor raw materials.

The prices of our primary raw materials have not historically been volatile. We have generally experienced differences in price of less than 5% over the course of a year for our primary raw materials.

Distribution Channels and Methods of Competition

International Markets and Customers

Our bamboo charcoal products are also sold directly or indirectly through distributors to international markets. Such exported products include bamboo vinegar, bamboo charcoal and purification product. The majority of our export items are for non-energy use. We estimate that with respect to our charcoal products that the percentage of goods sold for export is less than 5%, with the majority destined for Japan, South Korea and Taiwan.

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Domestic Markets and Customers

Currently, our consumer products are sold mainly via our distributors’ networks. In addition, we have a logistics center in Lishui. Starting from 2016, we have been selling our products mainly through distributors instead of operating logistics and warehousing facilities internally. In addition, we have significantly cut our charcoal product sales to supermarket customers.

We are in the process of expanding our charcoal product line to include toilet cleaning and kitchen cleaning products, among others. We believe there will be a high demand for these types of products because of growing awareness of cleanliness and environmental protection, as well as antibacterial products and disinfectants. In addition, we are in the process of restructuring our distribution network in an effort to cut both overall time and costs relating to the sale cycle.

Geographic Distribution of Revenues

Since 2017, our charcoal products have been sold via distributors instead of direct distribution to supermarkets and chain stores. As all of our sales are completed in China, with title transferring to our customers in the country; we estimate most of our products are sold and used in China.

Methods of Competition

The primary market for our Charcoal Doctor line of products is household hygiene use. Our air purification, deodorizing, and other health promoting products such as our charcoal pillow, cater to a niche but growing market of health-conscious customers. Customers in this sector have a particular affinity to brands. Notwithstanding this loyalty, product-switching costs are low, so manufacturers must compete on price.

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We conducted a marketing survey in Guangzhou in October 2013 for our charcoal bag products. According to the survey, we found that a decrease in package weight of 10% or an increase in price of 5% resulted in a loss of sales of less than 1%, showing that the market could absorb minor changes. By contrast, when the price increase reached 10% or the package weight decrease reached 15%, we saw that 30% of respondents were willing to choose alternate brands or forego a purchase. We further found that for cleaning and purification products, 85% of respondents cared about design attractiveness and approximately 65% made purchasing decisions based on attractiveness, causing us to conclude that demand for our products is more heavily influenced by such products than by minor (but not major) economic fluctuations.

Because the household hygiene sector has enjoyed relatively strong growth in the last few years as a result of increases in disposable urban income and an increased awareness of healthy lifestyle products, we have focused on growing our market share in this industry. In order to do this, we compete by pricing our products aggressively, often at a discount of 10 - 20% below our competitors. In addition, we pride ourselves on providing a high-quality product, so that our customers believe they have received value for the price they paid.

With regard to household carbonized bamboo products, the Charcoal Doctor brand is one of the largest and most famous. Our Charcoal Doctor brand name has been recognized as a “China Well-known Brand” by the China Brand Strategy Management Association, and our products have been recognized as a “Zhejiang Famous Forest Product” by the Zhejiang Famous Forest Product Affirmation Committee and have been awarded “The Fifth China Yiwu International Forestry Product Expo Gold Award” by the Fifth China Yiwu International Forestry Product Expo Committee. Moreover, the 2014 - 2018 China Bamboo Charcoal Products Market Research and Corporate Strategy Analysis Report notes high brand recognition for Charcoal Doctor products in China.

The industry is geographically concentrated in the southeast of China in the provinces of Anhui, Zhejiang and Fujian where bamboo is more prominent, the bamboo charcoal industry is also fragmented since it is subject to relatively low barriers of entry; low initial capital expenditure, low technical requirements (excluding high-end EDLC carbon compounds), highly homogenous products and few substitutes.

We face competition from a number of companies operating in the vicinity. Many of these companies have similar profiles in terms of size, number of employees and product ranges. One of the largest competitors is Zhejiang Maitanweng Ecology Development Co. Ltd. (“Zhejiang Maitanweng”), a local company also from Zhejiang Province.

Zhejiang Maitanweng has the largest franchise in the industry, with a presence in over 100 cities in China. Like our Company, Zhejiang Maitanweng has an extensive product portfolio of 200 household, automotive and health related bamboo charcoal-based products.

Zhejiang Jiejiegao Charcoal Industry Ltd. Co. (“Jiejiegao”) is another company with a similar product portfolio. Also located in the Lishui vicinity, it also holds many awards, and its products are stocked by Walmart, Hualian, Century Mart and other supermarkets like our products are. Jiejiegao is also one of the founding members of INBAR - International Network for Bamboo and Rattan.

Due to product homogeneity and low barriers to entry branding is an important differentiator in the industry. We are not aware of any foreign competitors in this specific segment.

Awards and Recognition

The Company is fully ISO 9000 and ISO 14000 certified and has received a number of national, provincial and local honors, awards and certifications for its quality products and scientific research efforts. In addition, our subsidiary Tantech Charcoal participated in the creation of Part 1, Part 2 and Part 3 of ISO 21626, an international standard for bamboo charcoal.

2004

Lishui High-Tech Product Company Certification for its Bamboo Vinegar

2005

	·	Zhejiang Province High Tech Product Award for its Bamboo Vinegar 62

	·	Zhejiang Science and Technology Award (Third Class) for R&D of a continuous distillation process during the bamboo carbonization process

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2006

	·	Zhejiang Science and Technology Award (Third Class) for its Liquid Bamboo Vinegar Products

	·	Forestry Industry Award for Excellence in Forestry - Liquid Bamboo Vinegar Products (6th Anniversary)

	·	Lishui City Forestry Industry Key Enterprise in Forestry Award

	·	Liandu District High Tech Prize (Second Class) for R&D in Carbonization of Bamboo

2007

	·	Zhejiang New Forestry High Tech Company Industrialization Project Award for R&D efforts in super capacitors using bamboo charcoal

	·	Zhejiang Provincial-Level Key Enterprise in Forestry Award

	·	Lishui Science and Technology Award (First Class) for its Liquid Bamboo Vinegar Products

2008

Official China High Tech Industry Enterprise Certificate (this award entitles the company to preferential enterprise income tax rates of 15% rather than 25%)

2009

	·	National Torch Plan Project Certificate for Liquid Bamboo Products

	·	National Science and Technology Progress Award (Second Class) for Bamboo Carbonization

2011

	·	Zhejiang Science and Technology Award (Second Class) for its Activated Carbon Production Technology and Equipment Research

	·	Garden Unit Recognition for beautification and ecological efforts

2012

Lishui City Recognition for Patent Grants

2013

Zhejiang Province High Technology Enterprise Recognition

2014

Lishui City Doctoral Working Station

2020

Obtain 3 international standard certifications of bamboo charcoal for participating in the creation of Part 1, Part 2 and Part 3 of ISO 21626,

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Research and Development

We are committed to researching and developing applications for bamboo charcoal and activated bamboo charcoal. We believe scientific and technological innovations will help the Company achieve its long-term strategic objectives. R&D is an integral part of our operations and the crux of its competitive advantage and differentiation strategy.

Our R&D team has one dedicated researchers and analysts, focusing on Charcoal Doctor product development and applications. Quality control is an important aspect of the team’s work and ensuring quality at every stage of the process has been a key driver in maintaining and developing brand value for the Company.

We have also collaborated with a number of top domestic universities and institutions for the advancement of bamboo charcoal research and process technology. Recent efforts and collaborations cover a wide range of areas including but not limited to: bamboo vinegar applications, bamboo yield and quality improvements, bamboo’s natural characteristics, bamboo carbonization process optimization and engineering initiatives to optimize and integrate production processes. It is through these collaborations that the company has managed to secure important breakthroughs resulting in proprietary knowledge and patents. Research has been carried out in cooperation with the following notable institutions:

	·	China National Bamboo Research and Development Center

	·	Zhejiang University of Agriculture and Forestry

	·	Zhejiang Academy of Forestry & Zhejiang Forestry Institute

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Our Research Projects

We have led or participated in numerous scientific projects that have led to important technological breakthroughs and advances. The following list does not include EDLC research projects which we transferred in December 2017 to Zhejiang Apeikesi Energy Co., Ltd, a PRC start-up company controlled by Dr. Zaihua Chen, our former Chief Technology Officer.

Project Description	Time Period	Project Level
Bamboo carbonization technology R&D for tobacco product manufacturing	12/2007-06/2010	Zhejiang Provincial Government funded scientific agricultural project

Development of dry distillation of bamboo wood	06/2007-05/2009	Central government funded high-tech agricultural project

Technological innovations to be able to produce bamboo vinegar in a continuous process	04/2006-04/2008	Zhejiang Provincial Government funded scientific agricultural project

Bamboo vinegar spontaneous combustion automation production technology	08/2004-12/2006	Central Government funded high-tech agricultural project

Bamboo R&D for lithium-ion battery anodes	08/2004-02/2006	Zhejiang Provincial Government funded scientific project

The research and demonstration for technology of agricultural waste carbonization and low ignition point molding charcoal fuel preparation	01/2016-12/2018	Zhejiang Provincial Government directly funded scientific project

Demonstration and promotion of green combustible carbon manufacturing technology using epicarps residue	08/2015-12/2017	Central Government funded forestry technology promotion project

R&D for driverless street sweepers	10/2020-5/2025	Cooperate with other companies

During the years ended December 31, 2025, 2024 and 2023, we spent $78,570, $38,800 and $23,942, respectively, on R&D.

Our Patents

We rely on our technology patents to protect our domestic business interests and ensure our position as a bamboo carbon technology pioneer in our industry. We have placed a high priority on the management of our intellectual property. Some products that are material to our operating results incorporate patented technology. Patented technology is critical to the continued success of our products. However, we do not believe that our business, as a whole, is dependent on, or that its profitability would be materially affected by the revocation, termination, expiration or infringement upon any particular patent. We currently hold five patents on charcoal products.

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Patents on Charcoal Products

Patent Description	Holder	Patent Type	Application	Expiration	Patent Number

A Barbecue Carbon Forming Machine	Shangnilai	Utility Model	27-Sep-23	26-Sep-33	202322640682X

The invention relates to a grinding machine and an operation method thereof	Shangnilai	Innovation	15-Sep-23	14-Sep-43	202311190159X

A Filter Tank	Shangnilai	Utility Model	18-Oct-23	17-Oct-33	2023228080228

The utility model relates to environmental dust removal equipment	Shangnilai	Utility Model	15-Sep-23	14-Sep-33	2023225190847

A Pulverizer	Shangnilai	Utility Model	1-Nov-23	31-Oct-33	2023229499563

Our Trademarks and Domain Names

We rely on trademarks and service marks to protect our branding. As of the date of this report, we hold over 18 registered trademarks about or related to “Charcoal Doctor” in different applicable trademark categories in China. We also own a domain name of tantech.cn, the registration of which will expire on March 11, 2034. This website is not part of this report and is not incorporated by reference herein.

REGULATIONS

We are subject to a variety of PRC and foreign laws, rules and regulations across a number of aspects of our business. This section summarizes the principal PRC laws, rules and regulations relevant to our business and operations. Areas in which we are subject to laws, rules and regulations outside of the PRC include intellectual property, competition, taxation, anti-money laundering and anti-corruption.

Investment Direction Regulations

On December 27, 2023, the National Development and Reform Commission (“NDRC”) issued the Guidance Catalogue for Industrial Structure Adjustments (2024 edition), which was implemented on February 1, 2024. This Catalogue is an important basis for the government to guide investment direction, promote technology innovation and industrial upgrading. Pursuant to relevant laws and regulations, in line with the promotion of energy conservation and green industry initiatives, the approval authorities will strictly control energy-intensive, polluting and natural resources industries, such as projects in low-end, capacity-redundant and over-expansion projects. Environmental protection departments and other departments with jurisdiction will also review such projects for compliance with applicable criteria.

The Catalogue divided industries into three categories: “encouraged,” “restricted,” and “eliminated” for investment. Industries not listed in the Catalogue are generally deemed as falling into a fourth category, “permitted.”

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The Catalogue has been replaced by the Special Administrative Measures (Negative List) for Foreign Investment Access (2018), effective July 28, 2018, and amended and restated by the 2021 version, effective January 1, 2022 (the “Negative List”). The Negative List specifies the prohibited and non-prohibited (similar to the restricted in the Catalogue) industries for foreign investment. For the industries not covered by the Negative List, the foreign investment and the domestic investment have equal access. Foreign investors may not invest in the prohibited industries specified by the Negative List. For the non-prohibited industries on the Negative List, a foreign investor must obtain an investment permit. There are certain requirements on the equity ownership and the executive officers of the foreign invested enterprises. If PRC has certain equity requirements in certain investment fields, no foreign-invested partnership may be established.

According to the 2022 Negative List, our charcoal products and EV products do not fall under the prohibited industries.

Given the Chinese government’s move toward more environmentally friendly initiatives, we believe the bamboo industry, and in particular, the bamboo charcoal industry, are poised to grow, both for heating and cooking purposes and also for charcoal byproduct uses for cleaning, purification and deodorization.

According to the Negative List, foreign investors may invest fully in our electric vehicle products. Nevertheless, as we may also produce other automobile products, we still keep less than 50% of foreign investment in the general automobile industry.

Intellectual Property Rights Regulations

The State Council and the National Copyright Administration, or the NCAC, have promulgated various rules and regulations relating to the protection of software in China. Under these rules and regulations, software owners, licensees and transferees may register their rights in software with the NCAC or its local branches and obtain software copyright registration certificates. Although such registration is not mandatory under PRC law, software owners, licensees and transferees are encouraged to go through the registration process to enjoy the better protections afforded to registered software rights.

On March 1, 2009, the MIIT promulgated the Administrative Measures on Software Products, or the Software Measures, which replaced the original Administrative Measures on Software Measures promulgated by MIIT in October 2000, to regulate software products and promote the development of the software industry in China. Pursuant to the Software Measures, software products which are developed in China and registered with the local provincial government authorities in charge of the information industry and filed with MIIT may enjoy the relevant encouragement policies. Software developers or producers may sell or license their registered software products independently or through agents. Upon registration, the software products will be granted registration certificates. Each registration certificate is valid for five years and may be renewed upon expiration.

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The PRC Trademark Law, adopted in 1982 and revised in 1993, 2001 and 2013 respectively, with its implementation rules adopted in 2002 and revised in 2014, protects registered trademarks. The PRC Trademark Office of the State Administration for Industry and Commerce, or the SAIC, handles trademark registrations and grants a protection term of ten years to registered trademarks.

The MIIT amended its Administrative Measures on China Internet Domain Names in 2004. According to these measures, the MIIT is in charge of the overall administration of domain names in China. The registration of domain names in PRC is on a “first-apply-first-registration” basis. A domain name applicant will become the domain name holder upon the completion of the application procedure.

Regulations on Tax

Our business operations are governed primarily by tax laws in the PRC. A description of the material tax consequences applicable to holders of our Common Shares may be found in the section titled “Item 10. Additional Information. -E. Taxation.” For more information regarding the impact of the PRC Enterprise Income Tax Law, see “Risk Factors - Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.”

Foreign Exchange Regulation

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, may be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans or foreign currency is to be remitted into China under the capital account, such as a capital increase or foreign currency loans to our PRC subsidiaries.

In August 2008, SAFE issued the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 142, regulating the conversion by a foreign-invested enterprise of foreign currency-registered capital into RMB by restricting how the converted RMB may be used. In addition, SAFE promulgated Circular 45 on November 9, 2011 in order to clarify the application of SAFE Circular 142. Under SAFE Circular 142 and Circular 45, the RMB capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable government authority and may not be used for equity investments within the PRC. In addition, SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of foreign-invested enterprises. The use of such RMB capital may not be changed without SAFE’s approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such loans have not been used.

In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of RMB proceeds by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.

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In July 2014, SAFE decided to further reform the foreign exchange administration system in order to satisfy and facilitate the business and capital operations of foreign invested enterprises and issued the Circular on the Relevant Issues Concerning the Launch of Reforming Trial of the Administration Model of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises in Certain Areas, or Circular 36, on August 4, 2014. This circular suspends the application of Circular 142 in certain areas and allows a foreign-invested enterprise registered in such areas to use the Renminbi capital converted from foreign currency registered capital for equity investments within the PRC.

On March 30, 2015, SAFE released the Notice on the Reform of the Management Method for the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or Circular 19, which has made certain adjustments to some regulatory requirements on the settlement of foreign exchange capital of foreign-invested enterprises, lifted some foreign exchange restrictions under Circular 142, and annulled Circular 142 and Circular 36. However, Circular 19 continues to prohibit foreign-invested enterprises from, among other things, using Renminbi fund converted from its foreign exchange capitals for expenditure beyond its business scope, providing entrusted loans or repaying loans between non-financial enterprises.

On June 19, 2016, SAFE issued the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or Circular 16, which took effect on the same day. Compared to Circular 19, Circular 16 not only provides that, in addition to foreign exchange capital, foreign debt funds and proceeds remitted from foreign listings should also be subject to the discretional foreign exchange settlement, but also lifted the restriction, that foreign exchange capital under the capital accounts and the corresponding Renminbi capital obtained from foreign exchange settlement should not be used for repaying the inter-enterprise borrowings (including advances by the third party) or repaying the bank loans in Renminbi that have been sub-lent to the third party.

SAFE Circular 37

In July 2014, SAFE issued SAFE Circular 37, which supersedes SAFE Circular 75, and requires that PRC citizens or residents must register with the relevant local SAFE branch before making capital contribution to any offshore entity directly established or indirectly controlled by that PRC citizen or resident for the purpose of investment or financing and with onshore or offshore assets or equity interests legally owned by that PRC citizen or resident. In addition, the SAFE registrations are required to be updated with local SAFE branch with respect to that offshore special purpose company in connection with the change of its basic information, such as its company name, business term, shareholding by individual PRC citizens or residents, merger, or division and, with respect to the individual PRC citizens or residents in case of any increases or decreases of capital in that offshore special purpose company, or share transfers or swaps by the individual PRC citizens or residents

Share Option Rules

Under the Administration Measures on Individual Foreign Exchange Control issued by the PBOC on December 25, 2006, all foreign exchange matters involved in employee share ownership plans and share option plans in which PRC citizens participate require approval from SAFE or its authorized branch. In addition, under the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Share Incentive Plans of Overseas Publicly-Listed Companies, or the Share Option Rules, issued by SAFE on February 15, 2012, PRC residents who are granted shares or share options by companies listed on overseas stock exchanges under share incentive plans are required to (i) register with SAFE or its local branches, (ii) retain a qualified PRC agent, which may be a PRC subsidiary of the overseas listed company or another qualified institution selected by the PRC subsidiary, to conduct the SAFE registration and other procedures with respect to the share incentive plans on behalf of the participants, and (iii) retain an overseas institution to handle matters in connection with their exercise of share options, purchase and sale of shares or interests and funds transfers. We will make efforts to comply with these requirements.

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Regulation of Dividend Distribution

The principal laws, rules and regulations governing dividend distribution by foreign-invested enterprises in the PRC are the Company Law of the PRC, as amended, the Wholly Foreign-owned Enterprise Law and its implementation regulations and the Equity Joint Venture Law and its implementation regulations. Under these laws, rules and regulations, foreign-invested enterprises may pay dividends only out of their accumulated profit, if any, as determined in accordance with PRC accounting standards and regulations. Both PRC domestic companies and wholly-foreign owned PRC enterprises are required to set aside as general reserves at least 10% of their after-tax profit, until the cumulative amount of such reserves reaches 50% of their registered capital. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

Labor Laws and Social Insurance

Pursuant to the PRC Labor Law and the PRC Labor Contract Law, employers must execute written labor contracts with full-time employees. All employers must comply with local minimum wage standards. Violations of the PRC Labor Contract Law and the PRC Labor Law may result in the imposition of fines and other administrative and criminal liability in the case of serious violations.

In addition, according to the PRC Social Insurance Law, employers in China must provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and housing funds.

C. Organizational structure

Below is a chart representing our current corporate structure:

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In the above charts, we provide the English names of our corporate entities. As to Tantech Holdings Ltd, USCNHK Holding Limited, EAG International Vantage Capitals Limited, China East Trade Co., Limited, EPakia Inc., the English names are the legal names of the entities. As to the other corporate entities, their legal names are in Chinese, and the English translations are provided as courtesy translations.

Our registered agent in the British Virgin Islands is Vistra (BVI) Limited. Our registered office and our registered agent’s office in the British Virgin Islands are both located at Vistra Corporate Services Centre, Wickhams Cay 2, Road Town, Tortola, VG1110, British Virgin Islands. Our agent in the U.S. is Shangzhi Zhang, with the address of 200 Greene St, Apt# 5001, Jersey City, NJ 07311.

Tantech Holdings Ltd (“THL”)

THL was incorporated on November 9, 2010 under the BVI Companies Act, 2004 as a company limited by shares under the name “Sinoport Enterprises Limited 中港企業有限公司” On April 15, 2013, Sinoport Enterprises Limited changed its name to “Tantech Holdings Ltd炭博士控股有限公司”. On March 4, 2016, the Company’s name was changed to “Tantech Holdings Ltd”.

On November 25, 2014, in contemplation of the initial public offering of its Common Shares, THL effected a simultaneous (a) 1,000-for-1 split of its Common Shares and (b) pro-rata redemption for par value and cancellation of 600 of such shares (30,000,000 in total).

On March 24, 2015, THL completed an initial public offering of 1,600,000 Common Shares.

On March 1, 2016, THL completed a private placement of 1,693,000 Common Shares.

On May 30, 2016, THL completed a private placement of 2,500,000 Common Shares.

On December 28, 2016, THL completed a private placement of 1,018,935 Common Shares.

On September 29, 2017, THL completed a registered direct offering and issued 1,891,307 Common Shares.

On September 28, 2018, THL completed an issuance of 150,000 Common Shares.

On March 23, 2020, THL completed an issuance of 35,592 Common Shares.

On November 24, 2020, THL completed a registered direct offering and issued 6,060,608 Common Shares.

In November 2020, THL issued 944,655 Common Shares upon exercise of warrants.

On May 18, 2021, THL issued to certain employees an aggregate of 1,600,000 Common Shares under its 2014 Share Incentive Plan.

On June 7, 2021, THL completed a private placement and issued 5,380,000 Common Shares at $1.30 per share for $6,994,000.

On August 3, 2021, THL completed dismantling our VIE structure and began controlling Wangbo, Shangchi Automobile and its subsidiary, Shenzhen Yimao New Energy Sales Co., Ltd. (“Shenzhen Yimao”) through direct equity ownership instead of a series of contractual arrangements.

On August 9, 2021, we held our annual shareholders meeting and passed a resolution, among other resolutions, to increase our authorized shares from 50,000,000 Common Shares each with a par value of US $0.001 to 600,000,000 Common Shares each with a par value of US $0.001.

On December 2,2021, THL completed a registered direct offering and issued 21,120,509 Common Shares.

On February 28,2022, THL completed a share consolidation of the Company’s Common Shares at the ratio of one-for-ten.

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On March 18, 2022, THL completed an underwritten public offering and issued 20,000,000 Common Shares and prefunded warrants.

On October 28, 2022, THL completed a share consolidation of the Company’s Common Shares at the ratio of one-for-twenty-four.

On March 22, 2023, THL completed a private placement and issued 1,000,000 Common Shares at $2.80 per share for $2,800,000.

On June 23, 2023, THL completed a private placement and issued 1,240,000 Common Shares at $2.50 per share for $3,100,000.

On June 29, 2023, THL issued a convertible note in the original principal amount of $2,160,000.00 for $2,000,000.00 in gross proceeds.

On May 1, 2024, THL completed a private placement and sold an aggregate of 4,200,000 units and pre-funded units at a purchase price of $0.50 per unit (less $0.0001 per pre-funded unit). Each unit consists of (i) one Common Share of the Company (or one pre-funded warrant to purchase one Common Share (the “Pre-Funded Warrant”)), (ii) two Series A warrants each to purchase one Common Shares (the “Series A Warrants”) and (iii) one Series B warrant to purchase such amount of Common Shares as determined on the reset date (defined in the warrant).

In January 2025, the Company entered into inducement agreements (each, an “Inducement Agreement”) with certain holders of the Company’s Series A Warrants, exercisable for an aggregate of 16,046,466 of the Company’s Common Shares, originally issued pursuant to a securities purchase agreement dated April 22, 2024. An aggregate of 2,625,000 warrants were issued pursuant to the Inducement Agreements.

On February 13, 2025, THL completed a consolidation of its Common Shares at the ratio of one-for-forty.

On August 1, 2024, THL issued a promissory note in the original principal amount of $2,160,000.00 for $2,000,000.00 in gross proceeds.

On October 14, 2025, THL issued a promissory note in the original principal amount of $3,230,000.00 for $3,000,000.00 in gross proceeds.

On October 27, 2025, THL completed a private placement and sold an aggregate of 3,614,464 units at a purchase price of $1.66 per unit. Each unit consisted of one Common Share, three Series C Warrants each exercisable for one Common Share at an exercise price of $1.66 per share and three Series D Warrants each exercisable for one Common Share at an exercise price of $1.83 per share.

On April 2, 2026, the Company completed a registered direct offering and concurrent private placement of an aggregate of 7,166,671 units at a purchase price of $0.30 per unit for $2.1 million in gross proceeds. Each unit consisted of one Common Share, one Series E warrant each exercisable for three Common Shares at an exercise price of $0.30 per share and one Series F warrant each exercisable for three Common Shares at an exercise price of $0.35 per share.

(All numbers of securities stated in this subsection above reflect the numbers of securities originally issued pursuant to the respective securities purchase agreements, without giving effect to the subsequent share consolidations and adjustments.)

USCNHK Holding Limited (“USCNHK Holding”)

USCNHK Holding was formed on December 13, 2024, it is not expected to conduct substantial business but will serve as a holding company to hold the Company’s interests in operating subsidiaries.

Lishui Smart New Energy Automobile Co., Ltd. (“Lishui Smart”) (Chinese name: 丽水智动新能源车辆有限公司)

We established Lishui Smart on November 16, 2020 as a limited liability company under PRC law. Lishui Smart’s authorized share capital is RMB20 million, of which Lishui Tantech owns 100%. Lishui Smart has one director, Zheyuan Liu, who is a PRC citizen.

Zhejiang Shangnilai Technology Co., LTD. (“Shangnilai”) (Chinese name: 浙江尚尼莱科技有限公司, formerly, 浙江上驰新能源车辆有限公司)

We established Zhejiang Shangchi New Energy Automobile Co., Ltd (“Zhejiang Shangchi”) on November 12, 2020 as a limited liability company under PRC law with the authorized share capital of RMB20 million, of which Lishui Tantech owns 100%. It has one director, Zheyuan Liu, who is a PRC citizen. In 2023, Zhejiang Shangchi was renamed Zhejiang Shangnilai Technology Co., Ltd.

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EAG International Vantage Capitals Limited (“Euroasia”) (Chinese name:欧亚通国际资本有限公司)

Euroasia was formed on April 27, 2015. Its share capital was HKD $10,000. It was organized as a limited company in Hong Kong, of which THL owns 100%. Euroasia has one director, Yefang Zhang, who is a citizen of Saint Lucia. In our previous reports, we called it Euroasia International Capital Co., Ltd., which is the English translation of its Chinese name 欧亚通国际资本有限公司.

Euroasia New Energy Automotive (Jiangsu) Co., Ltd. (“Euroasia New Energy”) (Chinese name: 欧亚通新能源汽车(江苏)有限公司)

Euroasia New Energy was formed on October 24, 2017. Its authorized share capital is USD 30.1 million, of which Euroasia owns 100%. It is organized as a limited liability company under PRC law. Euroasia New Energy has one director, Mingqin Dong, who is a PRC citizen.

Shanghai Jiamu Investment Management Co. Ltd. (“Jiamu”) (Chinese name: 上海佳木投资管理有限公司)

Jiamu was formed on July 14, 2015. Its authorized share capital is RMB500,000, of which Euroasia owns 100%. It is organized as one-person limited company (Taiwan Hong Kong & Macao invested) under PRC law. Jiamu has one director, Wangfeng Yan, who is a PRC citizen.

Eurasia Holdings (Zhejiang) Co., Ltd. (Chinese name: 欧亚通控股（浙江）有限公司)

On July 15, 2021, we established Eurasia Holdings (Zhejiang) Co., Ltd.

Hangzhou Eurasia Supply Chain Co., Ltd. (Chinese name: 杭州欧亚通供应链有限公司)

On August 4, 2021, we established Hangzhou Eurasia Supply Chain Co., Ltd. for supply chain business.

Gangyu Trading (Jiangsu) Co., Ltd. (Chinese name: 港誉贸易（江苏）有限公司)

On August 10, 2021, we established Gangyu Trading (Jiangsu) Co., Ltd. for marketing and sales of electric vehicles.

Shangchi (Zhejiang) Intelligent Equipment Co., Ltd. (Chinese name: 上驰（浙江）智能装备有限公司)

On August 26, 2021, we established Shangchi (Zhejiang) Intelligent Equipment Co., Ltd. for manufacturing and sales of new energy vehicles.

Shanghai Wangju Industrial Group Co., Ltd. (Chinese name: 上海旺桔实业集团有限公司)

On September 23, 2021, we established Shanghai Wangju Industrial Group Co., Ltd. for investing in the factoring industry.

China East Trade Co., Limited. (Chinese name:中国上东贸易有限公司)

On October 21, 2021, EAG International Vantage Capital Limited, a subsidiary of the Company, entered into an Equity Acquisition Agreement with Zhifan Dai, an unrelated third party, to acquire all the shares of China East Trade Co., Limited. (“China East Trade”) without any consideration. As of the date of acquisition, China East Trade had nominal operations.

Shenzhen Shangdong Trading Co., Ltd. (Chinese name: 深圳市上东贸易有限公司)

On October 21, 2021, Shanghai Wangju Industrial Group Co., Ltd., a subsidiary of the Company, entered into an Equity Transfer Agreement (“Shenzhen Shangdong Acquisition Agreement”) with Shenzhen Shangdong Investment Co., Ltd., an unrelated third party, to acquire all the shares of Shenzhen Shangdong Trading Co., Ltd. without any consideration. As of the date of acquisition, Shenzhen Shangdong Trading had nominal operations. As the subsidiary of Shenzhen Shangdong, First International Commercial Factoring (Shenzhen) Co., Ltd. (“First International”) became a subsidiary of the Company.

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First International Trade(Shenzhen) Co., Ltd.(“First International”)(Chinese name:首保国际贸易（深圳）有限公司, formerly,首保国际商业保理（深圳）有限公司)

On October 21, 2021, First International, as a subsidiary of Shenzhen Shangdong Trading, became a subsidiary of the Company. Shenzhen Shangdong Trading and China East Trade as the shareholders, held 75% and 25% shares respectively.

EPakia Inc.

On May 19, 2022, we established EPakia Inc. (“EPakia”) under the laws of the State of Delaware. EPakia serves as a primary vehicle for developing business in the United States and the international markets.

TANHOME INC (formerly, GOHOMEWAY INC)

On December 3, 2024, THL formed a wholly-owned subsidiary in the United States, GOHOMEWAY INC, a California corporation (“Gohomeway Holding”). Gohomeway Holding was renamed TANHOME INC in May 2025. It primarily serves as a holding company holding the Company’s equity interests in the operating subsidiaries in the U.S.

TANHOME GROUP INC (formerly, GOHOMEWAY GROUP INC)

On December 3, 2024, Gohomeway Holding formed a wholly-owned subsidiary, GOHOMEWAY GROUP INC, a California corporation (“Gohomeway”). Gohomeway was renamed TANHOME GROUP INC in May 2025. It mainly focuses on sustainable construction materials wholesale and trading business in the Company’s operational expansions in the U.S.

D. Property, Plants and Equipment

There is no private land ownership in China. Individuals and entities are permitted to acquire land use rights for specific purposes. Following is a list of properties that our subsidiaries rent and hold leasehold interests:

Land Use

Expiration/Lease

Location

Address

Term

Space

Lishui, Zhejiang Province, China

Buildings No. 3 and No. 4, No. 10 Cen Shan Road, Shuige Industrial Zone

July 1, 2024 to December 31, 2031

12,904 m2

Hangzhou, Zhejiang Province, China

No. 708, 7th Floor, Taiyue Digital Port, Intersection of Ao'ao Road and Jianshe 3rd Road

October 11, 2024 to October 25, 2026

60.62 m2

Chino, California, U.S.

14210 Telephone Ave, Chino, CA 91710

January 1, 2026 to December 31, 2026

581 sq ft

Currently, our charcoal products are sold via our sales and distribution networks located in 19 cities throughout China. We do not own or lease locations in these cities. In addition, we have logistics centers in Lishui.

Fixed assets at our properties consist of office equipment at all of our locations and, at our Lishui properties, equipment for the carbonization and processing of charcoal, both for our household goods products. Such equipment includes furnaces, boilers, mixers, kilns/ovens, jet mills, pulverizers, chemical analytic equipment, generators, briquette hydraulic powder molding machines, carbon activation and pickling tanks, belt dryers, air compressors, bamboo vinegar refining equipment, container production lines, hot acid/water washing equipment and automatic packing machines.

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None of our leased property is affected by any environmental issues that may affect our use of the property, except we voluntarily stopped producing BBQ charcoal products due to stricter local environmental requirements. At present, our plans to further develop, expand or improve these properties are funded through proceeds from our equity financings and through our operating cash flows.

Images of our facilities are presented below:

Productive Capacity

We currently produce all of our charcoal products at our Shuige Industrial Zone facility in Lishui. We have also installed the assembly lines for driverless street sweepers at our Shuige Industrial Zone facility.

Shuige Industrial Zone Facility

The following is a map of Shuige Industrial Zone facility, which displays the building numbers referred to in the below tables describing the productive uses of such facility. We rent the buildings according to our planned usage. Currently we are renting building 3rd floor of No. 1, No. 3, No. 4, No. 8 from Zhejiang Tantech Energy Tech Co., Ltd. for production, and Zhejiang Tantech Energy Tech Co., Ltd. permits us to keep using part of buildings No. 9 and 10 for free as employees’ dorms.

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Non-production properties:

			Actual
	Area		used		Reserved		Space
Functional uses and location	(m2)		area (m2)		area (m2)		utilization			Reserved purpose

Office administration, training, product display (Fourth floor of Building No. 3)		1,567		1,411		156		90	%	Additional offices

Research and development center (Fourth and fifth floors of Building No. 4)		2,510		1,000		1,510		60	%	New product development team; street sweeper research and development center

Office administration, (Third floor of Building No. 1)		250		0		250		0	%	Street sweeper Seller’s work

Employee dorms (Part of Building Nos. 9 and 10)		7,182		7,182	None			100	%	N/A

We currently have 1,817 m2 for office administration, training and product display purposes, of which 1,411 m2 are currently in use.

We have reserved 406 m2 for additional office space.

Our research and development center consists of 2,510 m2, of which we use 1,000 m2 for charcoal products R&D at present. We plan to use the additional space for our new product development team, but we do not have a specific time or plan in place for expanding such team.

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Production properties:

			Actual									Actual
			used		Reserved							productivity
	Area		area		area		Space			Current		(metric		Capacity			Reserved
Functional uses and location	(m2)		(m2)		(m2)		utilization			capacity (1)		tons)		utilization			purpose
Barbecue charcoal production line (Third floor of building No. 3)		1,568				1,568		0	%	300 metric tons			0	0		%(2)	Potential usage in the future

Solid deodorant and purification product production line (Part of third floor and whole second floor of building No. 4)		1,875		1,580		395		84.3	%	25.0 million packages		30.2 million packages		121		%(3)

Raw material warehouse for solid deodorant and purification product (Part of third floor of building No. 4)		875		875		0		100	%		N/A		N/A		N/A

Liquid household hygiene product and bamboo vinegar product production line (First floor of building No. 3)		1,567		1,254		313		80	%	4,000 units		1,780 units			45.0	%	Installation of equipment for production expansion

Raw material warehouse for liquid household hygiene product and bamboo vinegar product (Second floor of building No. 3)		1,567		1,567		0		100			N/A		N/A		N/A

Street sweeper assembly lines (First floor of building No. 4 and building No. 8)		2,375		2,375		0		100	%	3,750 units			0	0		%(4)

(1)	All of our production capacity rates assume 250 working days per year, 8 hours per day. We believe we can increase the number of days worked per year or number of hours worked per day to increase our production capacities if we choose to do so in the future.

(2)	We stopped producing BBQ charcoal since 2019 due to the stricter environmental requirements by the local government.

(3)	We exceeded 100% utilization rate by operating this production line in excess of the assumed capacity rates. If we choose to increase our production capacity in the future, we would need to replace existing production lines with more efficient lines or to expand our space, as we have not reserved space for additional production lines.

(4)	As of the date of this report, we have not started assembling any driverless street sweepers at this location yet.

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ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report.”

A. Operating Results

Overview of Company

Tantech Holdings Ltd (“Tantech BVI” or “the Company”) is a holding company established under the laws of the British Virgin Islands on November 9, 2010. Tantech BVI, through its subsidiaries (together as “we” or “the Group”) engages in research, development, production and distribution of various products made from bamboo and investment in mining exploration.

Historically, we have been a specialized manufacturer of bamboo charcoal-based products with primary business focus on consumer products and low emission BBQ charcoal. After completing a series of re-organizations, dismantling prior VIE structure and business strategic changes, through our operating subsidiaries, we are now engaging in research, development, production and distribution of various charcoal products and vehicles, as well as trading bamboo charcoal products. We also have investments in mining exploration. For more detailed information about our recent developments, please refer to Note 1 of the footnotes accompanying the financial statements included in this report.

During the year ended December 31, 2023 we merged its biodegradable packaging business segment into its consumer products segment. On April 2, 2025, the Board approved the sale of its Electric Vehicle business (the “EV Business”). We determined that the disposal of the EV Business met the criteria to be classified as a discontinued operation and, as a result, the EV Business’s historical financial results are reflected in the consolidated financial statements as a discontinued operation. The disposal of the EV Business represents a strategic shift that has a significant effect on our operations and financial results, which trigger discontinued operations accounting in accordance with ASC 205-20-45. The assets and liabilities related to the discontinued operations were retroactively classified as assets/liabilities held for sale, while results of operations related to the discontinued operations, including comparatives, were retroactively reported as loss from discontinued operations for the years ended December 31, 2025, 2024 and 2023, respectively.

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Factors Affecting Our Results of Operations

Price Inelasticity of Raw Materials May Reduce Our Profit

As a specialized manufacturer of bamboo charcoal-based products, we rely on the continuous and stable supply of bamboo charcoal to ensure our operation and expansion. Although bamboo (and as a result bamboo charcoal) is a renewable supply, price inelasticity at any given time may increase the likelihood of bidding wars, resulting in an increase in raw material prices and thus reduce our profit. In addition, as we are competing based upon low price, we will risk losing customers by increasing our selling prices.

Competition in Consumer Product

Our products face competition from other producers. In our consumer product segment, we face competition from a number of companies that have similar product portfolios. Many of such competitors’ products are not bamboo-based; instead, we compete based on our products’ functional use. Many such competitors are able to provide functionally similar products without relying on bamboo or bamboo charcoal components.

Although our Charcoal Doctor brand is one of the largest and most famous in the charcoal bag and bamboo charcoal market, the bamboo charcoal-based consumer product industry is relatively fragmented and subject to relatively low barriers of entry.

Our Charcoal Doctor air purification products compete with products from charcoal-based competitors such as Zhejiang Maitanweng Ecological Development Co., Ltd., Zhejiang Jiejiegao Charcoal Industry Co., Ltd., and Quzhou Modern Charcoal Industry, Co., Ltd.

Our Charcoal Doctor toilet cleaner competitors include non-charcoal-based competitors such as SC Johnson & Son (Shanghai) Inc. (which makes the Mr. Muscle brand in China), Blue Moon Chinese Co., Ltd., Shanghai White Cat Group Ltd., Beijing Green Umbrella Chemical Co., Ltd. and Weilai (Guangzhou) Consumer products Co., Ltd.

Results of Operations

The following table summarizes the selected results of our operation during the fiscal years ended December 31, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such years.

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(All amounts, other than percentages, in thousands of U.S. dollars)

	Years ended December 31,
	2025						2024
				As a						As a
				percentage						percentage			Dollar ($)			Percentage
	Dollars in			of sales			Dollars in			of sales			Increase			Increase
Statement of Operations Data:	thousands			revenue			thousands			revenue			(Decrease)			(Decrease)
Revenues	$	38,359			100.0	%	$	42,940			100.0	%	$	(4,581	)		(10.7	)%
Cost of revenues		31,218			81.4	%		33,997			79.2	%		(2,779	)		(8.2	)%
Gross profit		7,141			18.6	%		8,943			20.8	%		(1,802	)		(20.1	)%
Operating expenses
Selling expenses		7		-		%		51			0.1	%		(44	)		(86.3	)%
General and administrative expenses		19,261			50.2	%		4,869			11.3	%		14,392			295.6	%
Research and development expenses		79			0.2	%		39			0.1	%		40			102.6	%
Total operating expenses		19,347			50.4	%		4,959			11.5	%		14,388			290.1	%
(Loss) income from operations		(12,206	)		(31.8	)%		3,984			9.3	%		(16,190	)		(406.4	)%
Other income (expenses)
Change in fair value of convertible note		(150	)		(0.4	)%		(504	)		(1.2	)%		354			(70.2	)%
Change in fair value of warrant liabilities		568			1.5	%		(3,767	)		(8.8	)%		4,335			(115.1	)%
Changes in fair value of digital assets		-		-		%		-		-		%		-		-		%
Interest income		348			0.9	%		43			0.1	%		305			709.3	%
Interest expense		(280	)		(0.7	)%		(290	)		(0.7	)%		10			(3.4	)%
Financing interest income, net		353			0.9	%		1,842			4.3	%		(1,489	)		(80.8	)%
Long- term investments impairment		(23,141	)		(60.3	)%		-		-		%		(23,141	)	-		%
Gain (loss) from disposal of subsidiaries		3,577			9.3	%		(1,015	)		(2.4	)%		4,592			(452.4	)%
Gain from disposal of financing receivables		2,335			6.1	%		-		-		%		2,335		-		%
Loss on refund receivable		(4,424	)		(11.5	)%		-		-		%		(4,424	)	-		%
Gain on debt extinguishment		-		-		%		298			0.7	%		(298	)		(100.0	)%
Other income (expenses), net		(485	)		(1.3	)%		33			0.1	%		(518	)		(1,569.7	)%
Total other expenses, net		(21,299	)		(55.5	)%		(3,360	)		(7.8	)%		(17,939	)		533.9	%
Income (loss) before income tax expense		(33,505	)		(87.3	)%		624			1.5	%		(34,129	)		(5,469.4	)%
Income tax provision		(2,524	)		(6.6	)%		3,111			7.2	%		(5,635	)		(181.1	)%
Net loss from continuing operations		(30,981	)		(80.8	)%		(2,487	)		(5.8	)%		(28,494	)		1,145.7	%
Net loss from discontinued operations		(61	)		(0.2	)%		(1,079	)		(2.5	)%		1,018			(94.3	)%
Net loss		(31,042	)		(80.9	)%		(3,566	)		(8.3	)%		(27,476	)		770.5	%

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The following table summarizes the selected results of our operation during the fiscal years ended December 31, 2024 and 2023, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such years.

	Years ended December 31,
	2024						2023
				As a						As a
				percentage						percentage			Dollar ($)			Percentage
	Dollars in			of sales			Dollars in			of sales			Increase			Increase
Statement of Operations Data:	thousands			revenue			thousands			revenue			(Decrease)			(Decrease)
Revenues	$	42,940			100.0	%	$	44,631			100.0	%	$	(1,691	)		(3.8	)%
Cost of revenues		33,997			79.2	%		34,914			78.2	%		(917	)		(2.6	)%
Gross profit		8,943			20.8	%		9,717			21.8	%		(774	)		(8.0	)%
Operating expenses
Selling expenses		51			0.1	%		218			0.5	%		(167	)		(76.6	)%
General and administrative expenses		4,869			11.3	%		5,816			13.0	%		(947	)		(16.3	)%
Research and development expenses		39			0.1	%		24			0.1	%		15			62.5	%
Total operating expenses		4,959			11.5	%		6,058			13.6	%		(1,099	)		(18.1	)%
Income from operations		3,984			9.3	%		3,659			8.2	%		325			8.9	%
Other income (expenses)
Change in fair value of convertible note		(504	)		(1.2	)%		(166	)		(0.4	)%		(338	)		203.6	%
Change in fair value of warrant liabilities		(3,767	)		(8.8	)%		-		-		%		(3,767	)	-		%
Interest income		43			0.1	%		50			0.1	%		(7	)		(14.0	)%
Interest expense		(290	)		(0.7	)%		(301	)		(0.7	)%		11			(3.7	)%
Financing interest income		1,842			4.3	%		2,181			4.9	%		(339	)		(15.5	)%
Rental income from related parties		-		-		%		111			0.2	%		(111	)		(100.0	)%
Gain on debt extinguishment		298			0.7	%		-		-		%		298		-		%
Gain from disposal of investments		(1,015	)		(2.4	)%		3,555			8.0	%		(4,570	)		(128.6	)%
Other income (expenses), net		33			0.1	%		178			0.4	%		(145	)		(81.5	)%
Total other (expenses) income, net		(3,360	)		(7.8	)%		5,608			12.6	%		(8,968	)		(159.9	)%
Income before income tax		624			1.5	%		9,267			20.8	%		(8,643	)		(93.3	)%
Income tax provision		3,111			7.2	%		2,364			5.3	%		747			31.6	%
Net income (loss) from continuing operations		(2,487	)		(5.8	)%		6,903			15.5	%		(9,390	)		(136.0	)%
Net loss from discontinued operations		(1,079	)		(2.5	)%		(1,885	)		(4.2	)%		806			(42.8	)%
Net(loss) income		(3,566	)		(8.3	)%		5,018			11.2	%		(8,584	)		(171.1	)%

Revenues:

Revenues from continuing operations decreased by approximately $4.6 million, or 10.7%, to approximately $38.4 million in fiscal 2025 from approximately $42.9 million in fiscal 2024. The decrease was mainly attributable to the reduced demand in the persistently sluggish real estate market for our carbon products, which are used in household cleaning.

Revenues from continuing operations decreased by approximately $1.7 million, or 3.8%, to approximately $42.9 million in fiscal 2024 from approximately $44.6 million in fiscal 2023. The decrease was mainly attributable to the reduced demand in the sluggish real estate market for our carbon products, which are used in household cleaning.

Cost of revenues:

Our cost of revenues from continuing operations decreased by approximately $2.8 million, or 8.2%, to approximately $31.2 million in fiscal 2025 from approximately $34.0 million in fiscal 2024, which was in line with the decrease of revenue. As a percentage of revenues, the cost of revenues was 81.4% and 79.2% in fiscal 2025 and 2024, respectively.

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Our cost of revenues from continuing operations decreased by approximately $0.9 million, or 2.6%, to approximately $34.0 million in fiscal 2024 from approximately $34.9 million in fiscal 2023, which was in line with the decrease of revenue. As a percentage of revenues, the cost of revenues was 79.2% and 78.2% in fiscal 2024 and 2023, respectively.

Gross profit:

Our gross profit from continuing operations decreased by approximately $1.8 million, or 20.1%, to approximately $7.1 million in fiscal 2025 from approximately $8.9 million in fiscal 2024. The gross profit margin was 18.6% and 20.8% in fiscal 2025 and 2024, respectively.

Our gross profit from continuing operations decreased by approximately $0.8 million, or 8.0%, to approximately $8.9 million in fiscal 2024 from approximately $9.7 million in fiscal 2023. The gross profit margin was 20.8% and 21.8% in fiscal 2024 and 2023, respectively.

Selling expenses:

Selling expenses from continuing operations were less than $0.1 million in fiscal 2025 and 2024. As a percentage of revenues, our selling expenses were 0.0% and 0.1% of revenues in fiscal 2025 and 2024, respectively.

Selling expenses from continuing operations decreased by approximately $0.2 million, or 76.6%, to approximately $0.1 million in fiscal 2024 from approximately $0.2 million in fiscal 2023. As a percentage of revenues, our selling expenses were 0.1% and 0.5% of revenues in fiscal 2024 and 2023, respectively. The decrease was mainly due to less marketing and customs declaration service fees in fiscal 2024.

General and administrative expenses:

Our general and administrative expenses from continuing operations increased by approximately $14.4 million, or 295.6 %, to approximately $19.3 million in fiscal 2025 from approximately $4.9 million in fiscal 2024 As a percentage of revenues, general and administrative expenses increased to 50.2% in fiscal 2025, compared to 11.3% in fiscal 2024. The increase in general and administrative expenses was primarily attributable to increase of approximately $15.9 million in allowance of credit loss, offset by decreased professional consulting fee of approximately $1.8 million.

Our general and administrative expenses from continuing operations decreased by approximately $0.9 million, or 16.3%, to approximately $4.9 million in fiscal 2024 from approximately $5.8 million in fiscal 2023. As a percentage of revenues, general and administrative expenses decreased to 11.3% in fiscal 2024, compared to 13.0% in fiscal 2023. The decrease in general and administrative expenses was primarily attributable to decrease of approximately $1.4 million in allowance of credit loss, offset by increased professional consulting fee.

Research and development expenses

Our research and development expenses from continuing operations were less than $0.1 million in fiscal 2025, 2024 and 2023. We expect research and development expenses to increase as we expand our research and development activities to develop more new high-tech products to meet customer demands.

Total operating expenses

Total operating expenses from continuing operations increased by approximately $14.4 million, or 290.1%, to approximately $19.3 million in fiscal 2025 from approximately $5.0 million in fiscal 2024, which was mainly due to increase of approximately $14.4 million in general and administrative expenses.

Total operating expenses from continuing operations decreased by approximately $1.1 million, or 18.1%, to approximately $5.0 million in fiscal 2024 from approximately $6.1 million in fiscal 2023, which was mainly due to decrease of approximately $0.9 million in general and administrative expenses.

Change in fair value of convertible note

We recognized the convertible note at fair value.

Change in fair value of convertible note from continuing operations amounted to loss of approximately $0.2 million, $0.5 million and $0.2 million in fiscal 2025, 2024 and 2023, respectively.

Change in fair value of warrants liabilities

Change in fair value of warrants liability from continuing operations amounted to a gain of approximately $0.6 million in fiscal 2025 and a loss of approximately $3.8 million in fiscal 2024. The fair value of our warrants derivative liability assumed from the April 2024 private placement is re-measured to its fair value at the end of each reporting period, with the change being recorded as other expense or gain.

Interest income

Our interest income from continuing operations increased by approximately $0.3 million, or 709.3%, to approximately $0.3 million in fiscal 2025 from approximately $0.04 million in fiscal 2024, which was in line with increased loan receivable and refund receivable.

Our interest income from continuing operations was less than $0.1 million in fiscal 2024 and 2023.

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Interest expenses

Our interest expenses from continuing operations kept approximately $0.3 million in fiscal 2025, 2024 and 2023.

Financing interest income, net

Starting in June 2022, we provided commercial factoring services to customers who seek financing from their receivables. For the years ended December 31, 2025, 2024 and 2023, we recognized financing interest income, net from continuing operations of approximately $0.4 million, $1.8 million and $2.2 million, respectively.

Rental income from related parties

Since fiscal 2021, we signed some lease agreements with related parties to lease a part of production facilities to related parties, rent income from continuing operations was approximately nil, nil and $0.1 million in the years ended December 31, 2025, 2024 and 2023, respectively.

Long- term investments impairments

(1) impairment on investment of Libo Haokun Stone Co., Ltd. (“Libo Haokun”)

On January 10, 2018, the Group invested approximately $11.7 million (RMB120.0 million) to acquire 18% equity interest in Libo Haokun. Libo Haokun holds a government-issued permit and has the exclusive right to mine a 0.11 square-kilometer marble quarry in the central area of Guizhou province, China. We accounted for our 18% equity interest in Libo Haokun using the measurement alternative under ASC 321, as the investment does not have a readily determinable fair value and we do not exercise significant influence. During the year ended December 31, 2025, we identified several impairment indicators, most significantly a government prohibition on mining activities in Guizhou province affecting marble quarry operations. Although our mining permit was extended through 2028, the operational restrictions have severely limited the investee's ability to generate projected cash flows. We performed a quantitative assessment as of December 31, 2025, utilizing income approach. Based on this assessment, we determined the impairment was other-than-temporary. Accordingly, we recorded an impairment charge of approximately $16.7 million for the year ended December 31, 2025, reducing the carrying value to its estimated fair value of nil.

(2) impairment on investment of Fuquan Chengwang Mining Co., Ltd. (“Fuquan Chengwang”)

On November 29, 2019, the Group acquired 18% of the equity interest in Fuquan Chengwang at a price of approximately $6.4 million (RMB46.3 million). The consideration equals 18% of RMB257.35 million, the value of the mining right under a permit being renewed by Fuquan Chengwang according to an evaluation report. Fuquan Chengwang is a basalt mining company. We accounted for our equity interest in Fuquan Chengwang using the measurement alternative under ASC 321, as the investment does not have a readily determinable fair value and we do not exercise significant influence. During the year ended December 31, 2025, we identified several impairment indicators, most significantly a government prohibition on at the basalt site, which has resulted in a significant downward revision of the investee’s valuation. We engaged a third-party valuation firm and performed a quantitative assessment utilizing income approach. Based on this assessment, we determined the impairment was other-than-temporary. Accordingly, we recorded an impairment charge of approximately $6.4 million for the year ended December 31, 2025, reducing the carrying value to its estimated fair value of nil.

Gain (loss) from disposal of subsidiaries

On May 15, 2025, we closed the sale of the Electric Vehicle business, comprised of Hangzhou Jiyi Investment Management Co., Ltd., Hangzhou Wangbo Investment Management Co., Ltd., and its subsidiaries, Shangchi Automobile Co., Ltd. and Shenzhen Yimao New Energy Sales Co., Ltd., to a third party. We recorded gain from disposal of subsidiaries from continuing operations amounted to approximately $3.6 million in fiscal 2025.

On March 16, 2024, we signed a share transfer agreement with a third party to sell its 100% equity interest in Zhejiang Tantech Bamboo Charcoal Co., Ltd. (“Tantech Charcoal”). On December 25, 2024, we signed a share transfer agreement with a third party to sell its 100% equity interest in USCNHK Group Limited (“USCNHK”) and its wholly owned subsidiaries, Tantech Holdings (Lishui) Co., Ltd., Hangzhou Tanbo Technology Co., Ltd. and Lishui Xincai Industrial Co., Ltd. We recorded losses from disposal of subsidiaries from continuing operations of approximately $1.0 million in fiscal 2024.

On December 29, 2023, we signed a share transfer agreement with a third party to sell 100% equity interest in Lishui Jikang Energy Technology Co., Ltd. and its subsidiary Tantech Bamboo. We recorded gain from disposal of subsidiaries from continuing operations amounted to approximately $3.6 million in fiscal 2023.

Gain from disposal of financing receivables

On April 25, 2025, our financing receivables balance was fully settled as partial consideration paid in connection with the equity acquisition agreement of Xintong international on April 18, 2025 (See Note 3). Gain from disposal of the financing receivables from continuing operations amounted to approximately $2.3 million in fiscal 2025.

Loss on refund receivable

On December 18, 2025, due to the delayed commercial development plan on the forests and plants, we renegotiated with the Seller of Xintong International Trading Co., Ltd. (“Xintong International”) and both parties reached into agreement to unwind the acquisition transaction and repay the consideration (the "refund receivable") paid in four tranches, before March 31, 2028. The fair value of refund receivable was determined based on the present value of future repayments using the discounted rate. As a result, we recognized a loss on refund receivable from continuing operations amounted to approximately $4.4 million in fiscal 2025.

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Gain on debt extinguishment

Gain on debt extinguishment derived from extinguishment of debt in accordance with ASC 470, the difference between the fair value of convertible notes immediately after the modification and the carrying value of convertible notes immediately before the modification was recognized as a gain of debt extinguishment from continuing operations of nil, approximately $0.3 million and nil in fiscal 2025, 2024 and 2023, respectively.

Other (expense) income, net

Other expense, net was primarily related to government subsidy income, settlement loss on loans payable to third parties, and other items. Our other expense, net was approximately $0.5 million in fiscal 2025, compared to other income, net approximately $0.03 million in fiscal 2024, due to settlement loss on loans payable to third parties.

(Loss) income before income tax

As a result of the foregoing, our loss before income tax from continuing operations was approximately $33.5 million in fiscal 2025, as compared with a net income from continuing operations of approximately $0.6 million in fiscal 2024. Our income before income tax from continuing operations decreased by $8.6 million, or 93.3%, to approximately $0.6 million in fiscal 2024, from approximately $9.3 million in fiscal 2023.

Income tax expense (benefit)

Our income tax benefit from continuing operations was approximately $2.5 million in fiscal 2025 from income tax expense approximately $3.1 million in fiscal 2024. The decreased income tax expense was in line with decreased taxable income.

Our income tax expense from continuing operations increased by approximately $0.7 million, or 31.6%, to approximately $3.1 million in fiscal 2024 from approximately $2.4 million in fiscal 2023. The increased income tax expense was due to higher taxable income in certain profitable subsidiaries.

Net income (loss) from continuing operations

As a result of the foregoing, our net loss from continuing operations increased by $28.5 million, or 1,145.7%, to approximately $31.0 million in fiscal 2025 from approximately $2.5 million in fiscal 2024. Our net loss from continuing operations was approximately $2.5 million in fiscal 2024, as compared with a net income from continuing operations of approximately $6.9 million in fiscal 2023.

Loss from discontinued operations

On May 15, 2025, we closed the sale of its Electric Vehicle business (the “EV Business”), comprised of 100% equity interest in Jiyi, 100% equity interest in Wangbo, 70% equity interest in Shangchi Automobile (51% equity held by Wangbo and 19% equity held by Jiyi) and 100% equity interest in Shenzhen Yimao held by Shangchi Automobile. The net loss for these discontinued operations was approximately $0.1 million, approximately $1.1 million and approximately $1.9 million in fiscal 2025, 2024 and 2023, respectively.

Net income (loss)

As a result of the foregoing, our net loss increased by $27.5 million, or 770.5%, to approximately $31.0 million in fiscal 2025 from approximately $3.6 million in fiscal 2024. Our net loss was approximately $3.6 million in fiscal 2024, as compared with a net income of approximately $5.0 million in fiscal 2023.

B. Liquidity and Capital Resources

We are a holding company incorporated in the British Virgin Islands. We may need dividends and other distributions on equity from our PRC subsidiaries to satisfy our liquidity requirements. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiaries are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. Our PRC subsidiaries may also allocate a portion of their after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends.

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As of December 31, 2025, we had cash of approximately $33.0 million. Our current assets were approximately $74.0 million and our current liabilities were approximately $11.2 million, which resulted in a current ratio of 6.6:1. Total shareholders’ equity as of December 31, 2025 was approximately $110.3 million.

Our accounts receivable turnover in days were 392 days and 346 days for the years ended December 31, 2025 and 2024, respectively. Although we typically do not grant special payment terms to our customers, some of our customers, who are large retailers and wholesale chains, tend to require longer payment terms but are unlikely to default. The instances of slow payments and long-aging receivables may have negative impact on our short-term operating cash flow and future liquidity. We periodically review our accounts receivable and allowance level in order to ensure our methodology used to determine allowances is reasonable and accrued additional allowances if necessary. We have recently put a lot of efforts into accounts receivable collection through tightening our customer credit policy and strengthening monitoring of uncollected receivables. If we have difficulty collecting, the following steps will be taken, including but not limited to: cease any additional shipments to the customers, visit the customers to request payments on past due invoices, and if necessary, take legal recourse. If all of these steps are unsuccessful, management will determine whether or not the receivable will be reserved or written off.

For the accounts receivable, we provided credit losses of approximately $19.9 million against the aged accounts receivable balances. Subsequent to December 31, 2025 and through April 14, 2026, the Company collected approximately $9.0 million or 19% of the accounts receivable balance as of December 31, 2025.

The following table sets forth summary of our cash flows for the periods indicated:

(All amounts in thousands of U.S. dollars)

	Years ended December 31,
	2025			2024			2023
Net cash (used in) provided by continuing operations	$	(5,794	)	$	5,437		$	5,264
Net cash used in discontinued operations		(22	)		(74	)		(4	)
Net cash (used in) provided by operating activities		(5,816	)		5,363			5,260
Net cash used in continuing operations		(1,076	)		(3,300	)		(2,392	)
Net cash used in discontinued operations		-			-			(183	)
Net cash used in investing activities		(1,076	)		(3,300	)		(2,575	)
Net cash provided by continuing operations		3,426			3,461			7,418
Net cash (used in) provided by discontinued operations		(1	)		8			12
Net cash provided by financing activities		3,425			3,469			7,430
Effect of exchange rate changes on cash and restricted cash		1,320			554			28
Net (decrease) increase in cash and restricted cash		(2,147	)		6,086			10,143
Cash and restricted cash, beginning of year		35,211			29,125			18,982
Cash and restricted cash, end of year	$	33,064		$	35,211		$	29,125

Operating Activities

Net cash used in operating activities was approximately $5.8 million in fiscal 2025. Cash used in operating activities for the year ended December 31, 2025 mainly consisted of net loss from continuing operations of $31.0 million, non-cash items adjustment of approximately $34.8 million, an increase of approximately $13.1 million in accounts receivable due to slow collection, offset by a decrease of approximately $3.7 million in advances to suppliers.

Net cash provided by operating activities was approximately $5.4 million in fiscal 2024. Cash provided by operating activities for the year ended December 31, 2024 mainly consisted of net loss from continuing operations of $2.5 million, non-cash items adjustment of approximately $7.6 million, a decrease of approximately $4.9 million in accounts receivable due to stronger collection and an increase of approximately $1.1 million in tax payable, offset by increase of approximately $3.8 million in advances to suppliers, increase of approximately $0.6 million in prepaid expenses and other receivables and decrease of approximately $0.8 million in accounts payable.

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Net cash provided by operating activities was approximately $5.3 million in fiscal 2023. Cash provided by operating activities for the year ended December 31, 2023 mainly consisted of net income of approximately $6.9 million, non-cash items adjustment of approximately $0.2 million, increase of approximately $1.3 million in accounts payable and increase of approximately $0.6 million in accrued liabilities and other payables, offset by an increase of approximately $3.5 million in accounts receivable due to slow collection.

Investing Activities

Net cash used in investing activities was approximately $1.1 million in fiscal 2025. The net cash used in investing activities in fiscal 2025 was primarily attributable to approximately $0.6 million increase in financing receivable and approximately $0.5 million increase in loans to third parties.

Net cash used in investing activities was approximately $3.3 million in fiscal 2024. The net cash used in investing activities in fiscal 2024 was primarily attributable to approximately $1.8 million increase in financing receivable and approximately $1.4 million in loans to third parties.

Net cash used in investing activities was approximately $2.6 million in fiscal 2023. The net cash used in investing activities in fiscal 2023 consisted of approximately $2.2 million in financing receivable, approximately $0.2 million in additions to intangible assets and approximately $0.2 million used in discontinued operation.

Financing Activities

Net cash provided by financing activities was approximately $3.4 million in fiscal 2025. Net cash provided by financing activities in fiscal 2025 was mainly consisting of proceeds from loans payable to third parties of approximately $3.4 million, proceeds from exercising of warrants of approximately $0.4 million and proceeds from related parties of approximately $0.3 million, offset by paid issuance of common stock and warrants cost of approximately $0.5 million and repayment to related parties of approximately $0.2 million.

Net cash provided by financing activities was approximately $3.5 million in fiscal 2024. Net cash provided by financing activities in fiscal 2024 was mainly consisting of proceeds from exercising of warrants of approximately $3.2 million, proceeds from issuance of common stock and warrants of approximately $1.7 million, proceeds from loans from third parties of approximately $2.2 million, offset by repayment of loans from third parties of approximately $2.4 million, repayment of loans from related parties of approximately $1.0 million and repayment of convertible note of approximately $0.3 million.

Net cash provided by financing activities was approximately $7.4 million in fiscal 2023. Net cash provided by financing activities in fiscal 2023 was primarily due to two offerings of 2,240,000 common shares, which resulted in net proceeds of approximately $5.8 million and net proceeds of approximately $2.0 million from the issuance of a convertible note in fiscal 2023.

Our primary source of cash is currently generated from the sales of our products and financings. In the coming years, we are planning to continue to raise additional capital by issuing common shares to meet our cash needs. While facing uncertainties in regard to the size and timing of capital raise, we expect to be able to meet our working capital and capital expenditure requirements by using our cash on hand, cash flows from operations and bank borrowings in the next twelve months.

Capital Expenditures

We had capital expenditures of $nil, $0.08 million and $0.2 million for the years ended December 31, 2025, 2024 and 2023, respectively for the addition in property, plant and equipment and intangible assets.

We expect that our capital expenditures will increase in the future as our business continues to develop and expand. We have used cash generated from our subsidiaries’ operations to fund our capital commitments in the past and anticipate using such funds and proceeds received from our offerings through issuance of common stocks and other sources to fund capital expenditure commitments in the future.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

C. Research and Development, Patents and Licenses, etc.

See “Item 4. Information on the Company—B. Business Overview—Research and Development” and “Item 4. Information on the Company—B. Business Overview—Our Patents” of our annual report.

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D. Trend Information

Market Trends

Other than as disclosed elsewhere in this financial report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition.

E. Critical Accounting Estimate

In preparing the financial statements we have made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accounting estimates are deemed critical if they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations.

A summary of our significant accounting policies which are important to the portrayal of our financial condition and results of operations is set forth in Note 2 to our financial statements included elsewhere in this filing. An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are uncertain and requires significant judgment at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements.

Impairment of Long-term Investments

We evaluate our long-term investments for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For the year ended December 31, 2025, we determined that certain investments were other-than-temporarily impaired and recorded charges to reduce their carrying values to an estimated fair value of nil. These fair value measurements represent "Level 3" measurements as they rely on significant unobservable inputs. Specifically, we utilized an income approach (discounted cash flow method) which requires management to make highly subjective estimates regarding future cash flows, long-term revenue growth rates, and discount rates that reflect the specific regulatory and economic risks of the investees' operations in China. Our determination of a nil fair value was primarily driven by management's judgment regarding the permanence of government-imposed mining prohibitions and shifting market demand. These estimates are sensitive to change; if our assumptions regarding the duration of regulatory restrictions or future market conditions were to differ, the resulting fair value could be materially different.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table provides information regarding our executive officers and directors as of the date of this annual report:

Name	Age	Position(s)
Zheyuan Liu	33	Chief Executive Officer

Weilin Zhang	59	Chief Financial Officer and Director

Yefang Zhang	61	Director and Chairwomen of the Board

Mengqi Liao	33	Director (Independent)

Hongdao Qian	64	Director (Independent)

Shudong Wang	77	Director (Independent)

Zheyuan Liu has served as our Chief Executive Officer since May 2025 and as a manager and the sole director of Lishui Smart New Energy Automobile Co., Ltd. since February 2018. Mr. Liu has also served as a manager and the sole director of Zhejiang Shangnilai Technology Co., Ltd. since January 2024. From December 2016 to April 2017, he served as a site surveyor for Sunshine Insurance Group Co Ltd. Mr. Liu graduated from Shandong University in 2014 with a Bachelor’s degree in automotive engineering.

Weilin Zhang has served as our Chief Financial Officer since July 2019 and as a member of our board of directors since December 2024. Prior to being appointed as CFO, Mr. Zhang has been serving as the CFO of Forasen Group since October 2018 and was its CFO from March 2008 to June 2013. From July 2013 to September 2018, he was the general manager of Zhejiang Juma Valve Co., Ltd. He graduated from Zhejiang Province Finance Institute in 1989 and studied accounting at Beijing Industry and Commerce College from 2004 to 2008.

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Yefang Zhang has served as our director since 2013 and as our Chairwoman since December 2024. Ms. Zhang also serves as the CFO and an internal control manager of EPakia Inc., a wholly owned subsidiary of the Company. Ms. Zhang has been in leadership roles for over a dozen years. She then helped to found Forasen Group Co., Ltd in October 2002 and has served as a Board member since then. Since July 2015, she has been Chairwoman and CEO of Farmmi, Inc., another Nasdaq listed company. From 1997 until 2002, she worked as General Manager at Zhejiang Forasen Food Co., Ltd. From 1994 to 1997, she served as Vice General Manager of Lishui Jingning Huali Co., Ltd. From 1991 to 1994, she was a teacher at Wenzhou Huangtan Middle School. From 1990 to 1994, she served on the board of Lishui Farmer’s Economic Committee. In addition to her efforts with our Company, Ms. Zhang also manages the business operations of Forasen Group, a company she owns with her husband, Mr. Zhengyu Wang. Forasen Group is a PRC company with several subsidiaries that are engaged in a variety of businesses, including without limitation, rubber trading, mushroom sales, biomass power generation, and marketing. Ms. Zhang is a 62.07% shareholder of CN ENERGY GROUP. INC., another Nasdaq listed company. She earned her Bachelor’s Degree in Geography from Wenzhou Teacher’s College in July 1991. We have appointed Ms. Zhang to be a director because of her knowledge of our industry and business.

Mengqi Liao has been our director since June 19, 2022. Ms. Liao is a senior engagement manager at Pan-China Certified Public Accountants where she serves on the audit teams in the audits of financial statements of various public companies listed both in China and foreign stock exchanges. She was a manager with Da Hua Certified Public Accountants from July 2018 to March 2022. From January 2016 to June 2018, she was an auditor at Ruihua Certified Public Accountants. Ms. Liao is a certified public accountant and a certified tax agent in China. She also received the Chinese intermediate level accountant qualifications. Ms. Liao has participated in the audits of the financial statements of a number of public companies in connection with their financial reporting compliance with U.S. and Chinese stock exchange rules and IPOs in Hong Kong and Korea stock exchanges. Ms. Liao earned a Bachelor’s degree in Management from Chongqing Technology and Business University in 2016. We’ve chosen Ms. Liao to serve as a director because of her knowledge and experience in accounting, U.S. GAAP and SEC financial reporting matters.

Hongdao Qian has been our director since 2014. He has been a Professor on the faculty of the Guanghua Law School at Zhejiang University since September 2005. His research, writing and teaching focuses on corporate governance, economic analysis of law and Western jurisprudence. Prior to joining Guanghua Law School, Mr. Qian was a Professor at the Institute of Law, China Academy of Social Sciences; a Lecturer in Economics at Peking University and a Prosecutor in the People’s Procuratorate of Zhejiang Province. Mr. Qian was a visiting scholar at Waseda University in Japan, Stanford University in California and both Oxford and Cambridge Universities in England. Since July 2017, he has been an independent director of Farmmi, Inc, another Nasdaq listed company. He currently serves as Vice Chairman of the Chinese Society of Comparative Law, Executive Subeditor of the China Academic Yearbook and President of the China Rule of Law Research Institute, where he has organized a team of scholars to create China’s first Rule of Law index using empirical methods. Mr. Qian earned his bachelor of law from Jilin University in 1986, his master of law from North-West University of Politics and Law in 1994 and his doctor of law from Peking University in 1997. We have chosen Mr. Qian to serve on our Board of Directors because of his expertise in economics and law.

Shudong Wang has been our director since 2014. He was the department director at the China National Bamboo Research Center from 1996 through his retirement in 2012. He earned his bachelor’s degree in forestry from Northeast Forestry University in Heilongjiang in 1976. He once served as deputy director of Bamboo Branch of the Academic Committee of China Forestry. He has also served as executive director of South-South Cooperation Association and the Center of China International Exchange. He is a science advisor to the State Forestry Bureau. We selected Mr. Wang to serve on our Board of Directors because of his expertise in the bamboo industry in China.

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B. Compensation

EXECUTIVE COMPENSATION

Our compensation committee approves our salary and benefit policies. Before our initial public offering, our board of directors determined the compensation to be paid to our executive officers based on our financial and operating performance and prospects, and contributions made by the officers’ to our success. Each of the named officers are measured by a series of performance criteria by the board of directors, or the compensation committee on a yearly basis. Such criteria are set forth based on certain objective parameters such as job characteristics, required professionalism, management skills, interpersonal skills, related experience, personal performance and overall corporate performance.

The board of directors makes an independent evaluation of appropriate compensation to key employees, with input from management. The board of directors has oversight of executive compensation plans, policies and programs.

Summary Compensation Table

The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of the named executive officers for services rendered to us for the years ended December 31, 2024 and 2025.

						All Other
	Fiscal	Salary		Bonus		Compensation		Total
	Year	($)		($) (1)		($) (2)		($)
Zheyuan Liu(3)	2025		14,119	-			2,673		16,792
Chief Executive Officer	2024		13,201	-			2,480		15,681

Weilin Zhang(4)	2025		39,116		-		5,326		44,442
Chief Financial Officer	2024		30,813		-				30,813

Zhengyu Wang(5)	2025		162,021		-			162,021
Former Director of the Company and CEO of EPakia, Tanhome Holding and Tanhome	2024		50,000		-		75,355		125,355

(1)	No officer received a bonus in 2024 or 2025.

(2)	Consists of social security payments required under Chinese law. Although we also reimburse the referenced individuals for reasonable expenses, such reimbursements do not, in the aggregate, exceed $10,000 for any individual in any year presented and are not considered perquisites because they are integrally and directly related to the performance of such recipients’ jobs.

(3)	Effective May 29, 2025, the Board has appointed Mr. Zheyuan Liu to serve as the Chief Executive Officer of the Company. Compensation paid in 2024 included salary and other compensation as an officer of subsidiaries of the Company.

(4)	Effective July 1, 2019, Weilin Zhang was appointed as Chief Financial Officer.

(5)	Effective December 19, 2024, Mr. Wang resigned as a director of the Company. Compensation paid in 2025 and 2024 included salary and other compensation paid for his service as an executive officer of the U.S. subsidiaries.

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Director Compensation

The following section presents information regarding the compensation paid during fiscal 2025 to members of our Board of Directors, including directors who are not also our employees (referred to herein as “Non-Employee Directors”). As of December 31, 2025, we had two executive directors, Ms. Yefang Zhang and Mr. Weilin Zhang, and three Non-Employee directors, Ms. Mengqi Liao, Mr. Shudong Wang and Mr. Hongdao Qian.

We may also provide stock, option or other equity-based incentives to our directors for their service. We also plan to reimburse our directors for any out-of-pocket expenses incurred by them in connection with their services provided in such capacity.

The following table presents information regarding the compensation of our executive directors and non-employee directors for fiscal 2025.

										Changes in Pension
	Director Fees									Value and
	earned							Non-equity		Nonqualified
	or paid			Stock		Option		Incentive Plan		Deferred		All other
	in cash			Awards		Awards		Compensation		Compensation		Compensation			Total
Name	($)			($)		($)		($)		($)		($)(1)			($)
Yefang Zhang		-			-		-		-		-		129,726	(2)		129,726
Weilin Zhang		-			-		-		-		-		44,442	(3)		44,442
Mengqi Liao		10,000			-		-		-		-		-			10,000
Shudong Wang		8,348	(4)		-		-		-		-		-			8,348
Hongdao Qian		8,348	(4)		-		-		-		-		-			8,348

(1)	Consists of salary paid as an executive officer of subsidiaries of the Company and social security payments required under Chinese and U.S. laws.

(2)	Included salaries paid of $129,726 in aggregate as the CFO and Internal Control Officer of EPakia Inc.

(3)	Included salary paid of $44,442 as the Company’s CFO.

(4)		Included annual director’s fees of RMB60,000.

C. Board Practices

See information provided in response to Item 6.A. above as to the current directors.

Election of Officers

Our executive officers are elected by, and serve at the discretion of, our board of directors. There are no familial relationships among any members of the Board of Directors.

Board of Directors and Board Committees

Our board of directors currently consists of five (5) directors. A majority of our Board of Directors is independent, as such term is defined by NASDAQ.

A director may vote in respect of any contract or transaction in which he is interested, provided, however, that the nature of the interest of any director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote on that matter. A general notice or disclosure to the directors or otherwise contained in the minutes of a meeting or a written resolution of the directors or any committee thereof of the nature of a director’s interest shall be sufficient disclosure and after such general notice it shall not be necessary to give special notice relating to any particular transaction. A director may be counted for a quorum upon a motion in respect of any contract or arrangement which he shall make with our company, or in which he is so interested and may vote on such motion.

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Mr. Zheyuan Liu currently holds the position of Chief Executive Officer. Ms. Yefang Zhang currently holds the position of Chair of the Board. The board of directors believes that separating the roles of Chief Executive Officer and Chairman of the board of directors is in the best interests of the Company and its shareholders. Separating such roles allows our Chief Executive Officer to focus completely on operations and corporate strategy execution. We do not have a lead independent director, and we do not anticipate having a lead independent director because we will encourage our independent directors to freely voice their opinions on a relatively small company board. The Board of Directors makes all relevant Company decisions. As a smaller company with a small board of directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters.

Board Committees

We have established three standing committees under the board: the audit committee, the compensation committee and the nominating committee. The audit committee is responsible for overseeing the accounting and financial reporting processes of our company and audits of the financial statements of our company, including the appointment, compensation and oversight of the work of our independent auditors. The compensation committee of the board of directors reviews and makes recommendations to the board regarding our compensation policies for our officers and all forms of compensation and also administers our incentive compensation plans and equity-based plans (but our board will retain the authority to interpret those plans). The nominating committee of the board of directors is responsible for the assessment of the performance of the board, considering and making recommendations to the board with respect to the nominations or elections of directors and other governance issues. The nominating committee considers diversity of opinion and experience when nominating directors.

Mengqi Liao qualifies as an audit committee financial expert and is the chair of the audit committee. Shudong Wang is the chair of the compensation committee. Hongdao Qian is the chair of the nominating committee. Mengqi Liao, Shudong Wang and Hongdao Qian serve on all three committees, and each is an independent director.

Duties of Directors

Under British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our amended and restated memorandum and articles of association. We have the right to seek damages if a duty owed by our directors is breached.

The functions and powers of our board of directors include, among others:

	·	appointing officers and determining the term of office of the officers;

	·	authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;

	·	exercising the borrowing powers of the company and mortgaging the property of the company;

	·	executing checks, promissory notes and other negotiable instruments on behalf of the company; and

	·	maintaining or registering a register of mortgages, charges or other encumbrances of the company.

Interested Transactions

A director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested. We require directors to promptly disclose the interest to all other directors after becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into. A general notice or disclosure to the board or otherwise contained in the minutes of a meeting or a written resolution of the board or any committee of the board that a director is a shareholder, director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any particular transaction.

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Remuneration and Borrowing

The directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board of directors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors. Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party.

Qualification

There are no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us in a general meeting. There are no other arrangements or understandings pursuant to which our directors are selected or nominated.

All directors hold office until the next annual meeting of shareholders at which directors are re-elected or until their successors have been duly elected and qualified. Officers are elected by and serve at the discretion of the Board of Directors. Employee directors generally do not receive any compensation for their services as a director. Non-employee directors are entitled to receive directors’ fees for serving as directors and may receive incentive security grants from our company. In addition, non-employee directors are entitled to receive reimbursement of their actual travel expenses for each board meeting attended.

Limitation of Director and Officer Liability

Under British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with a view to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. British Virgin Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime.

Under our memorandum and articles of association, we may indemnify our directors, officers and liquidators against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigative proceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled to indemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings, they must have had no reasonable cause to believe their conduct was unlawful. Such limitation of liability does not affect the availability of equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.

We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We may only indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director had no reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in good faith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence of fraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement, conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interests or that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of any proceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the director or officer in connection with the proceedings.

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We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers and incurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liability as provided in our amended and restated memorandum and articles of association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors, officers or persons controlling our company under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has any been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Related Party Transactions,” our directors and officers have not been involved in any transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

D. Employees

OUR EMPLOYEES

As of December 31, 2025, we employ a total of 45 full-time employees in the following functions:

	Number of Employees
	December 31,		December 31,		December 31,
Department	2025		2024		2023
Senior Management		6		5		5
Human Resource & Administration		4		3		11
Finance		11		12		15
Research & Development		-		1		3
Production & Procurement		17		20		18
Sales & Marketing		7		5		7
Total		45		46		61

Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We have not experienced any work stoppages.

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We are required under PRC law to make contributions to employee benefit plans at specified percentages of our after-tax profit. In addition, we are required by PRC law to cover employees in China with various types of social insurance. In 2025, 2024 and 2023, we contributed approximately $88,640, $99,340 and $138,000, respectively, to the employee benefit plans and social insurance. The effect on our liquidity by the payments for these contributions is immaterial. We believe that we are in material compliance with the relevant PRC employment laws.

Employment Agreements

Each employee is required to enter into an employment agreement. Accordingly, all of our employees, including management, have executed their employment agreements. Our employment agreements with our executives provide the amount of each executive officer’s salary and establish their eligibility to receive a bonus.

Our employment agreements with our executive officers generally provide for a salary to be paid monthly. The agreements also provide that executive officers are to work full time for our company and are entitled to all legal holidays as well as other paid leave in accordance with PRC laws and regulations and our internal work policies. The employment agreements also provide that we will pay for all mandatory social security programs for our executive officers in accordance with PRC regulations. Our executive officers are subject to keep trade secrets confidential. In addition, our employment agreements with our executive officers prevent them from rendering services for our competitors for so long as they are employed.

Other than the salary, bonuses, equity grants and necessary social benefits required by the government, which are defined in the employment agreements, we currently do not provide other benefits to the officers. Our executive officers are not entitled to severance payments upon the termination of their employment agreement or following a change in control.

We have not provided retirement benefits (other than a state pension scheme in which all of our employees in China participate) or severance or change of control benefits to our named executive officers.

Under Chinese law, we may terminate an employment agreement without penalty by providing the employee thirty days’ prior written notice or one month’s wages in lieu of notice if the employee is incompetent or remains incompetent after training or adjustment of the employee’s position in other limited cases. If we wish to terminate an employment agreement in the absence of cause, then we are obligated to pay the employee one month’s salary for each year we have employed the employee. We are, however, permitted to terminate an employee for cause without penalty to our company, where the employee has committed a crime or the employee’s actions or inactions have resulted in a material adverse effect to us.

Zheyuan Liu

We entered into an employment agreement with our Chief Executive Officer, Mr. Zheyuan Liu, effective May 29, 2025.

Under the terms of that employment agreement, Mr. Liu is entitled to the following:

Base compensation of RMB 108,000 payable in twelve equal monthly installments of RMB 9,000 each.

Mr. Liu’s employment agreement expires on June 1, 2026 and is expected to be renewed.

Weilin Zhang

We entered into an employment agreement with our Chief Financial Officer, Mr. Weilin Zhang, effective July 1, 2025. Under the terms of that employment agreement, Mr. Zhang is entitled to the following:

	·	Base compensation of RMB 300,000 payable in twelve equal monthly installments of RMB 25,000 each.

	·	Reimbursement of reasonable expenses incurred by Mr. Zhang.

Mr. Zhang’s employment agreement expires on June 30, 2028.

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E. Share ownership

The following table sets forth information with respect to beneficial ownership of our Common Shares as of May 11, 2026 by:

	·	Each of our directors and named executive officers; and

	·	All directors and named executive officers as a group.

The number and percentage of Common Shares beneficially owned are based on 14,278,286 Common Shares outstanding as of May 11, 2026. Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of 5% or more of our Common Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities. In computing the number of Common Shares beneficially owned by a person listed below and the percentage ownership of such person, Common Shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of May 11, 2026 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all Common Shares shown as beneficially owned by them. Unless otherwise indicated in the footnotes, the address for each principal shareholder is in the care of our Company at No. 10 Cen Shan Road, Shuige Industrial Zone, Lishui City, Zhejiang Province 323000, People’s Republic of China. As of May 11, 2026, we had 25 shareholders of record.

	Amount of
	Beneficial		Percentage
Named Executive Officers and Directors	Ownership(1)		Ownership(2)
Directors and Named Executive Officers:
Zheyuan Liu, CEO(3)		-		-
Weilin Zhang, CFO and Director		-		-
Yefang Zhang, Director and Chairwoman of the Board(4)		1,142	*
Mengqi Liao, Independent Director		-		-
Shudong Wang, Independent Director		-		-
Hongdao Qian, Independent Director		-		-
All directors and executive officers as a group (six (6) persons)		1,142	*

* Less than 1%.

(1)	Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the Common Shares.

(2)	The number of our Common Shares outstanding used in calculating the percentage for each listed person includes the Common Shares underlying options held by such person to the extent such options are exercisable within 60 days of the date hereof.

(3)	Tanbsok Group Ltd holds 1,142 Common Shares of the Company. The sole shareholder of Tanbsok Group Ltd is Ms. Yefang Zhang, who is a director and Chairwoman of the Board of our company and the spouse of our controlling shareholder, Mr. Zhengyu Wang. By virtue of this relationship, Mr. Wang may be deemed to share beneficial ownership of the shares of our company held by Tanbsok Group Ltd with Ms. Zhang.

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Options

Incentive Securities Pool

We have established a pool for shares and share options for our employees. As of the date of this report, this pool contains shares and options to purchase 4,225 of our Common Shares, less than 10% of the number of Common Shares outstanding.

Any options granted will vest at a rate of 20% per year for five years and have a per share exercise price equal to the fair market value of one of our Common Shares on the date of grant. We expect to grant shares and/or options under this pool to certain employees. We have not yet determined the recipients of any such grants.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

No shareholder who is known to us beneficially owns 5% or more of our outstanding Common Shares, based on 14,278,286 Common Shares outstanding as of May 11, 2026.

B. Related party transactions

Our Audit Committee of our Board of Directors (which consists solely of independent directors) approves and ratifies all related party transactions.

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In addition to the executive officer and director compensation arrangements discussed in “Executive Compensation,” the Company had the following related party transactions for the year ended December 31, 2025, 2024 and 2023 to which it was a participant, in which the amount involved in the transactions is material to the Company or the related party. The relationship of related parties is summarized as follow:

Name of Related Party		Relationship to the Group
Zhengyu Wang		CEO of EPakia Inc., the husband of Yefang Zhang, and a controlling shareholder of the Company
Yefang Zhang		Director, Chairwoman of the Board, and a controlling shareholder of the Company
Wangfeng Yan (i)		Formerly Chief Executive Officer
Zhejiang Nongmi Food Co., Ltd. (“Nongmi Food”)		Controlled by Yefang Zhang, but it ceased to be a related party in December, 2024 after she sold the entity.
Zhejiang Nongmi Biotechnology Co., Ltd. (“Nongmi Biotechnology”)		Controlled by Yefang Zhang, but it ceased to be a related party in June 2025 after she sold the entity.
Zhejiang Nongmi Ecological Technology Co., Ltd. (“Nongmi Ecological”)		Controlled by Yefang Zhang

(i) On May 29, 2025, Mr. Wangfeng Yan tendered his resignation as the Chief Executive Officer of the Company due to personal reasons.

Due from a related party

The balances due from related parties were as follows:

	December 31,		December 31,
	2025		2024
Mr. Zhengyu Wang	$	-	$	118,025
Total	$	-	$	118,025

As of December 31, 2024, the Company had advanced funds to Mr. Zhengyu Wang for expanding business, such funds have been collected as of December 31, 2025.

Due to related parties

The balances due to related parties were as follows:

	December 31,		December 31,
	2025		2024
Mr. Zhengyu Wang and his affiliates	$	3,791,711	$	-
Mr. Wangfeng Yan and his affiliates		-		11,576
Total	$	3,791,711	$	11,576

As of December 31, 2025, Mr. Zhengyu Wang advanced working capital and paid some business expenses on behalf of the Company.

As of December 31, 2024, Mr. Wangfeng Yan and his affiliates had paid some business expenses on behalf of the Group. The balance due to Mr. Wangfeng Yan and his affiliates was $11,576 as of December 31, 2024.

All balances due to related parties were unsecured, interest-free and due upon demand.

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Lease arrangement with related party

On July 13, 2021, Zhejiang Tantech Bamboo Technology Co., Ltd. (“Tantech Bamboo”, a subsidiary disposal in December 2023) signed a lease agreement with Zhejiang Nongmi Food Co., Ltd. (“Nongmi Food”) to lease part of its production facilities of approximately 1,180 square meters to Nongmi Food for ten years with monthly rent of approximately $2,100 (RMB15,338). For the years ended December 31, 2025, 2024 and 2023, the Group recorded rent income of nil, nil and $64,231, respectively from Nongmi Food.

On July 13, 2021, Tantech Bamboo signed a lease agreement with Zhejiang Nongmi Biotechnology Co., Ltd. (“Nongmi Biotechnology”) to lease part of its production facilities of approximately 1,914 square meters to Nongmi Biotechnology for ten years with monthly rent of approximately $5,300 (RMB38,280). For the years ended December 31, 2025, 2024 and 2023, the Group recorded rent income of nil, nil and $28,149, respectively from Nongmi Biotechnology.

On March 1, 2023, Tantech Bamboo signed a lease agreement with Zhejiang Nongmi Ecological Technology Co., Ltd (“Nongmi Ecological”) to lease part of its production facilities of approximately 479 square meters to Nongmi Ecological for five years with monthly rent of approximately $1,700 (RMB11,975). For the years ended December 31, 2025, 2024 and 2023, the Group recorded rent income of nil, nil and $18,937, respectively from Nongmi Ecological.

C. Interests of experts and counsel

Not applicable for annual reports on Form 20-F.

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ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

See information provided in response to Item 18 below.

We incorporate by reference in the Registration Statements on Form F-3 (File No. 333-274274 and 333-251509) and on Form S-8 (File No. 333-205821) our consolidated balance sheets as of December 31, 2023, 2024 and 2025 and the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2025, which appears in this Annual Report on Form 20-F.

Legal and Administrative Proceedings

We may be involved from time to time in litigation, claims or other disputes in the ordinary course of business regarding, among other things, contract disputes with our customers, copyright, trademark and other intellectual property infringement claims, consumer protection claims, employment related cases and other matters in the ordinary course of our and disputes between our merchants and consumers. We may also be involved in litigation, regulatory investigations or inquiries and administrative proceedings that may not necessarily arise from our ordinary course of business, such as securities class action lawsuits and investigations or inquiries by securities regulators.

Dividend Policy

Since our inception, we have not declared or paid any dividends on our Common Shares. We have no present plan to pay any dividends on our Common Shares in the foreseeable future. We intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

Any future determination to pay dividends will be made at the discretion of our board of directors and may be based on a number of factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

B. Significant Changes

We have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

ITEM 9. THE OFFER AND LISTING.

A. Offer and listing details

Our Common Shares have been listed on Nasdaq since March 24, 2015 under the symbol “TANH.”

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B. Plan of distribution

Not applicable for annual reports on Form 20-F.

C. Markets

Our Common Shares are listed on Nasdaq under the symbol “TANH.”

D. Selling shareholders

Not applicable for annual reports on Form 20-F.

E. Dilution

Not applicable for annual reports on Form 20-F.

F. Expenses of the issue

Not applicable for annual reports on Form 20-F.

ITEM 10. ADDITIONAL INFORMATION.

A. Share capital

Not applicable for annual reports on Form 20-F.

B. Memorandum and articles of association

We incorporate by reference the description of our Memorandum and Articles of Association set forth in our registration statement on Form F-1, declared effective on March 18, 2015 (File No. 333-198788), as amended by the Amended and Restated Memorandum and Articles of Association effective as of January 9, 2026.

C. Material contracts

Other than as otherwise disclosed previously, we did not have any other materials contracts.

D. Exchange controls

Foreign Currency Exchange

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We typically do not need to use our offshore foreign currency to fund our PRC operations. In the event we need to do so, we will apply to obtain the relevant approvals of SAFE and other PRC government authorities as necessary.

SAFE Circular 37

Regulation of Dividend Distribution

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E. Taxation

The following sets forth the material British Virgin Islands, Chinese and U.S. federal income tax consequences related to an investment in our Common Shares. It is directed to U.S. Holders (as defined below) of our Common Shares and is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This description does not deal with all possible tax consequences relating to an investment in our Common Shares, such as the tax consequences under state, local and other tax laws.

The following brief description applies only to U.S. Holders (defined below) that hold Common Shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the tax laws of the United States in effect as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below. The brief description below of the U.S. federal income tax consequences to “U.S. Holders” will apply to you if you are a beneficial owner of shares and you are, for U.S. federal income tax purposes,

	·	an individual who is a citizen or resident of the United States;

	·	a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

	·	an estate whose income is subject to U.S. federal income taxation regardless of its source; or

	·	a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

WE URGE POTENTIAL PURCHASERS OF OUR SHARES TO CONSULT THEIR OWN TAX

ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX

CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR SHARES.

People’s Republic of China Enterprise Taxation (for the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau)

Enterprise Income Tax

Prior to January 1, 2008, entities established in the PRC were generally subject to a 30% national and 3% local enterprise income tax rate. Various preferential tax treatments promulgated by PRC tax authorities were available to foreign-invested enterprises.

In March 2007, the National People’s Congress enacted The Enterprise Income Tax Law of the People's Republic of China, which was amended on February 24, 2017 and December 29, 2018, respectively. In December 2007, the State Council promulgated the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China, or the Implementation Regulations, which was amended in 2019 and in 2024. The Enterprise Income Tax Law (i) reduces the top rate of enterprise income tax from 33% to a uniform 25% rate applicable to both foreign-invested enterprises and domestic enterprises and eliminates many of the preferential tax policies afforded to foreign investors, (ii) permits companies to continue to enjoy their existing tax incentives, subject to certain transitional phase-out rules and (iii) introduces new tax incentives, subject to various qualification criteria.

The Enterprise Income Tax Law also provides that enterprises organized under the laws of jurisdictions outside China with their “de facto management bodies” located within China may be considered PRC resident enterprises and therefore be subject to PRC enterprise income tax at the rate of 25% on their worldwide income. The Implementing Rules further define the term “de facto management body” as the management body that exercises substantial and overall management and control over the production and operations, personnel, accounts and properties of an enterprise. If an enterprise organized under the laws of jurisdiction outside China is considered a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. It would be subject to the PRC enterprise income tax at the rate of 25% on its worldwide income. Additionally, a 10% withholding tax would be imposed on dividends it pays to its non-PRC enterprise shareholders and with respect to gains derived by its non-PRC enterprise shareholders from transfer of its shares.

Prior to January 1, 2008, dividends derived by foreign enterprises from business operations in China were exempted from PRC enterprise income tax. However, such exemption was revoked by the Enterprise Income Tax Law and dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in China to its foreign enterprise investors are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a preferential withholding arrangement.

Pursuant to the Notice of the State Administration of Taxation on Negotiated Reduction of Dividends and Interest Rates, which was issued on January 29, 2008 and supplemented and revised on February 29, 2008, and the Notice on the Entry into Force and Implementation of the Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, which became effective on December 8, 2006 and applies to income derived in any year of assessment commencing on or after April 1, 2007 in Hong Kong and in any year commencing on or after January 1, 2007 in the PRC, such withholding tax rate may be lowered to 5% if a Hong Kong enterprise is deemed the beneficial owner of any dividend paid by a PRC subsidiary by PRC tax authorities and holds at least 25% of the equity interest in that particular PRC subsidiary at all times within the 12-month period immediately before distribution of the dividends. Furthermore, the State Administration of Taxation promulgated the Notice on the Interpretation and Recognition of Beneficial Owners in Tax Treaties in October 2009, which stipulates that non-resident enterprises that cannot provide valid supporting documents as “beneficial owners” may not be approved to enjoy tax treaty benefits. Specifically, it expressly excludes an agent or a “conduit company” from being considered as a “beneficial owner” and a “beneficial owner” analysis shall be conducted on a case-by-case basis following the “substance-over-the-form” principle.

Value-Added Tax and Business Tax

Pursuant to applicable PRC tax regulations, any entity or individual conducting business in the service industry is generally required to pay a business tax at the rate of 5% on the revenues generated from providing such services. However, if the services provided are related to technology development and transfer, such business tax may be exempted subject to approval by the relevant tax authorities. Whereas, pursuant to the Provisional Regulations on Value-Added Tax of the PRC and its implementation regulations, unless otherwise specified by relevant laws and regulations, any entity or individual engaged in the sales of goods, provision of processing, repairs and replacement services and importation of goods into China is generally required to pay a value-added tax, or VAT, for revenues generated from sales of products, while qualified input VAT paid on taxable purchase can be offset against such output VAT.

In November 2011, the Ministry of Finance and the State Administration of Taxation promulgated the Pilot Plan for Imposition of Value-Added Tax to Replace Business Tax. In March 2016, the Ministry of Finance and the State Administration of Taxation further promulgated the Pilot Measures for Replacing Business Tax with Value-Added Tax, which became effective on May 1, 2016. Pursuant to the pilot plan and relevant notices, VAT is generally imposed in the modern service industries, including the VATS, on a nationwide basis. VAT of a rate of 6% applies to revenue derived from the provision of some modern services. Unlike business tax, a taxpayer is allowed to offset the qualified input VAT paid on taxable purchases against the output VAT chargeable on the modern services provided.

In April 2018, the Ministry of Finance and the State Administration of Taxation jointly issued the Notice on Adjusting the Value-Added Tax Rates (Notice 32 of Finance and Taxation, 2018). The Notice stipulates that, from May 1, 2018, for all taxpayers who have engaged in taxable sales of VAT or imported goods, where the original 17% and 11% tax rates were applied, the tax rates shall be adjusted to 16% and 10%, respectively. This has reduced the operation burden of enterprises to a certain extent.

British Virgin Islands Taxation

Under the BVI Act as currently in effect, a holder of Common Shares who is not a resident of the British Virgin Islands is exempt from British Virgin Islands income tax on dividends paid with respect to the Common Shares and all holders of Common Shares are not liable to the British Virgin Islands for income tax on gains realized during that year on sale or disposal of such shares. The British Virgin Islands does not impose a withholding tax on dividends paid by a company incorporated or re-registered under the BVI Act.

There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated or re-registered under the BVI Act. In addition, shares of companies incorporated or re-registered under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.

There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the British Virgin Islands.

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United States Federal Income Taxation

The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

	·	banks;

	·	financial institutions;

	·	insurance companies;

	·	regulated investment companies;

	·	real estate investment trusts;

	·	broker-dealers;

	·	traders that elect to mark-to-market;

	·	U.S. expatriates;

	·	tax-exempt entities;

	·	persons liable for alternative minimum tax;

	·	persons holding our Common Shares as part of a straddle, hedging, conversion or integrated transaction;

	·	persons that actually or constructively own 10% or more of our voting shares;

	·	persons who acquired our Common Shares pursuant to the exercise of any employee share option or otherwise as consideration; or

	·	persons holding our Common Shares through partnerships or other pass-through entities.

Prospective purchasers are urged to consult their tax advisors about the application of the U.S. Federal tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Common Shares.

Taxation of Dividends and Other Distributions on our Common Shares

Subject to the passive foreign investment company rules discussed below, the gross amount of distributions made by us to you with respect to the Common Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). The dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.

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With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends are taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Common Shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Under U.S. Internal Revenue Service authority, Common Shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on Nasdaq. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Common Shares, including the effects of any change in law after the date of this annual report.

Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Common Shares will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”

To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Common Shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.

Taxation of Dispositions of Common Shares

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the Common Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Common Shares for more than one year, you will generally be eligible for reduced tax rates. If capital gains preferential rates are amended, such gains would be taxable at the personal income rates then in place. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes.

Passive Foreign Investment Company

We believe that we were not a passive foreign investment company for U.S. federal income tax purposes for the year ended December 31, 2025, but we cannot be certain whether we will be treated as a passive foreign investment company for any future taxable year. PFIC status is a factual determination for each taxable year which cannot be made until the close of the taxable year. A non-U.S. corporation is considered a PFIC for any taxable year if either:

	·	at least 75% of its gross income is passive income; or

	·	at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”).

We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.

We must make a separate determination each year as to whether we are a PFIC. As a result, our PFIC status may change. In particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Common Shares, our PFIC status will depend in large part on the market price of our Common Shares. Accordingly, fluctuations in the market price of the Common Shares may cause us to become a PFIC. If we are a PFIC for any year during which you hold Common Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Common Shares.

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However, if we cease to be a PFIC, you may avoid some of the adverse effects of the PFIC regime by making a “deemed sale” election with respect to the Common Shares.

If we are a PFIC for any taxable year during which you hold Common Shares, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Common Shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Common Shares will be treated as an excess distribution. Under these special tax rules:

	·	the excess distribution or gain will be allocated ratably over your holding period for the Common Shares;

	·	the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

	·	the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Common Shares cannot be treated as capital, even if you hold the Common Shares as capital assets.

A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for the Common Shares, you will include in income each year an amount equal to the excess, if any, of the fair market value of the Common Shares as of the close of your taxable year over your adjusted basis in such Common Shares. You are allowed a deduction for the excess, if any, of the adjusted basis of the Common Shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the Common Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Common Shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the Common Shares, as well as to any loss realized on the actual sale or disposition of the Common Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Common Shares. Your basis in the Common Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “- Taxation of Dividends and Other Distributions on our Common Shares” generally would not apply.

The mark-to-market election is available only for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including Nasdaq. If the Common Shares are regularly traded on Nasdaq and if you are a holder of Common Shares, the mark-to-market election would be available to you were we to be or become a PFIC.

Alternatively, a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold Common Shares in any year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 regarding distributions received on the Common Shares and any gain realized on the disposition of the Common Shares.

You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Common Shares and the elections discussed above.

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Information Reporting and Backup Withholding

Dividend payments with respect to our Common Shares and proceeds from the sale, exchange or redemption of our Common Shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on display

The Company is subject to the informational requirements of the Exchange Act, and will file reports, registration statements and other information with the SEC. The Company’s reports, registration statements and other information can be inspected on the SEC’s website at www.sec.gov and such information can also be inspected and copies ordered at the public reference facilities maintained by the SEC at the following location: 100 F Street NE, Washington, D.C. 20549. You may also visit us on the World Wide Web at http://www.tantech.cn. However, information contained on our website does not constitute a part of this annual report.

I. Subsidiary Information

Not applicable.

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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Foreign Exchange Risk

Our functional currency is the RMB, and our financial statements are presented in U.S. dollar. The Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. Any appreciation or depreciation in the value of RMB relative to the U.S. dollar may affect our financial results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.

Currently, our assets, liabilities, revenues and costs are mainly denominated in RMB. However, we may generate revenues denominated in U.S. dollar, and our offering was in U.S. dollar. Therefore, a portion of our cash and cash equivalents and short-term financial assets are denominated in U.S. dollar. Our exposure to foreign exchange risk primarily relate to those financial assets denominated in U.S. dollars. Any significant revaluation of RMB against U.S. dollar may materially affect our earnings and financial position, and the value of, and any dividends payable on, our Common Shares in U.S. dollars in the future. We reflect the impact of currency translation adjustments in our financial statements under the heading “accumulated other comprehensive income (loss).” For years ended December 31, 2025, 2024 and 2023, we had adjustments of $1,766,415, $86,797 and $(4,220,033), respectively, for foreign currency translations. See “Risk Factors - Risks Related to Doing Business in China - Fluctuations in exchange rates could adversely affect our business and the value of our securities.”

Commodity Risk

As a developer and manufacturer of bamboo-based charcoal products, our Company is exposed to the risk of an increase in the price of raw bamboo and, as a result, bamboo charcoal. We historically have lacked an ability to pass on price increases to customers, but we have not entered into any contract to hedge any specific commodity risk. Moreover, our Company does not purchase or trade on commodity instruments or positions; instead, it purchases commodities (bamboo charcoal and wood-based charcoal) for use.

In summer 2012, we faced a supply shortage based on local government initiatives to reduce the risk of fire caused by charcoal. As a result, the local government in Daxing Anlin, where one of our main wood-based OEM BBQ charcoal suppliers is located, restricted the production of charcoal during June, July and August 2012. At that time, our stock of OEM BBQ charcoal was insufficient to avoid demand pressures. We have viewed this temporary shortage as an isolated event and do not expect it to recur in the future. If, however, this belief is incorrect, the absence of hedging could exacerbate our commodity risk.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.

With the exception of Items 12.D.3 and 12.D.4, this Item 12 is not applicable for annual reports on Form 20-F. As to Items 12.D.3 and 12.D.4, this Item 12 is not applicable, as the Company does not have any American Depositary Shares.

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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.

We do not have any material defaults in the payment of principal, interest, or any installments under a sinking or purchase fund.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.

See “Item 10.B-Additional Information-Memorandum and Articles of Association” for a description of the rights of securities holders, which remain unchanged.

ITEM 15. CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’ rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective as of December 31, 2025.

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(b) Management’s Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934, as amended). Our management evaluated the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2025, due to the material weaknesses in our internal control over financial reporting described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses in our internal control over financial reporting identified as of December 31, 2025 were (i) lack of skilled financial reporting personnel with adequate U.S. GAAP and SEC reporting experience, (ii) lack of appropriate approval procedures for certain material transactions; and (iii) lack of segregation of duties in financial reporting function.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness of our internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

We reviewed the result of management’s assessment with the Audit Committee of our Board of Directors.

	(c)	Attestation report of the registered public accounting firm. Not applicable.

	(d)	Changes in internal control over financial reporting.

There have been no changes in the Company’s ICFR identified in connection with the above evaluation that occurred during the last fiscal year that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR, other than the following:

	1.	We continued to enforce the plan for remediation of the material weaknesses in ICFR as outlined in the Form 20-F for the year ended December 31, 2016, continued to improve internal control over financial reporting and conducted timely self-assessment.

	2.	We completed a thorough review of the processes and procedures in the Company’s financial reporting related to the areas where the material weaknesses existed and made necessary changes to streamline our processes.

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The management plans to remediate material weaknesses in internal control over financial reporting identified by implementing the following measures:

	1.	Recruit qualified accounting personnel with sufficient knowledge and experience to: (a) address complex U.S. GAAP accounting issues and prepare and review financial statements and related disclosures under U.S. GAAP, and (b) resolve the issue of lack of segregation of duties.

	2.	Hire additional credentialed professional staff and consulting professionals with greater knowledge and experience of U.S. GAAP and related regulatory requirements to oversee our financial reporting process in order to ensure our compliance with U.S. GAAP and financial reporting requirements. Until such time as we hire qualified accounting personnel with the requisite U.S. GAAP knowledge and experience and train our current accounting personnel, we have engaged an outside CPA with U.S. GAAP knowledge and experience to supplement our current internal accounting personnel and assist us in the preparation of our financial statements to ensure that our financial statements are prepared in accordance with U.S. GAAP.

	3.	Improve the communication between management and board of directors and establish appropriate approval procedures for all material and non-routine transactions.

	4.	Develop and conduct internal control training to executive officers, management personnel, and finance and accounting departments, so that management and key personnel understand the requirements of internal control over financial reporting under the SEC rules.

The Company has posted the advertisement for recruiting an internal control manager on online recruiting platforms and is in the recruitment process. Given that there is a limited candidate pool for accounting personnel with U.S. GAAP and internal control compliance experience, it may take several months to find a suitable candidate to fill the position. The Company currently estimates the associated material costs expected to be incurred will be approximately $100,000 per year.

ITEM 15T. CONTROLS AND PROCEDURES.

Not applicable.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

The Company’s Board of Directors has determined that Mengqi Liao qualifies as an “audit committee financial expert” in accordance with applicable NASDAQ standards. The Company’s Board of Directors has also determined that Mengqi Liao and the other members of the Audit Committee are all “independent” in accordance with the applicable NASDAQ standards.

ITEM 16B. CODE OF ETHICS.

We have adopted a Code of Ethics and have attached it as an exhibit to this annual report. A copy of the Code of Ethics may be found on our company website.

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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

YCM CPA INC. was appointed by the Company to serve as its independent registered public accounting firm for the 2025 and 2024 fiscal years. Audit services provided by YCM CPA INC. included the examination of the consolidated financial statements of the Company and services related to periodic filings made with the SEC.

Fees Paid to Independent Registered Public Accounting Firm

Audit Fees

The following table represents the approximate aggregate fees for services rendered by YCM CPA INC. for the periods indicated:

	Years ended December 31,
	2025		2024
Audit Fees
YCM CPA INC.	$	290,000	$	285,000

Total	$	290,000	$	285,000

Audit-Related Fees

The Company has not paid YCM CPA INC. for audit-related services in 2025 and 2024.

Tax Fees

The Company has not paid YCM CPA INC. for tax services in 2025 and 2024.

All Other Fees

The Company has not paid YCM CPA INC. for any other services in 2025 and 2024.

Audit Committee Pre-Approval Policies

Before YCM CPA INC. was engaged by the Company to render audit or non-audit services, the engagement was approved by the Company’s audit committee. All services rendered by YCM CPA INC. have been so approved.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.

Not applicable.

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ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.

Neither the Company nor any affiliated purchaser has purchased any shares or other units of any class of the Company’s equity securities registered by the Company pursuant to Section 12 of the Securities Exchange Act during the fiscal year ended December 31, 2025.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.

Not applicable.

ITEM 16G. CORPORATE GOVERNANCE.

Other than as described in this section, our corporate governance practices do not differ from those followed by domestic companies listed on the Nasdaq. NASDAQ Listing Rule 5635 generally provides that shareholder approval is required of U.S. domestic companies listed on Nasdaq prior to issuance (or potential issuance) of securities (i) equaling 20% or more of the company’s common stock or voting power for less than the greater of market or book value (ii) resulting in a change of control of the company; and (iii) which is being issued pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation arrangement made or materially amended. Notwithstanding this general requirement, NASDAQ Listing Rule 5615(a)(3)(A) permits foreign private issuers to follow their home country practice rather than these shareholder approval requirements. The British Virgin Islands do not require shareholder approval prior to any of the foregoing types of issuances. The Company, therefore, is not required to obtain such shareholder approval prior to entering into a transaction with the potential to issue securities as described above. The Board of Directors of the Company has elected to follow the Company’s home country rules as to such issuances and will not be required to seek shareholder approval prior to entering into such a transaction.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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ITEM 16J. INSIDER TRADING POLICY

We have adopted an insider trading policy to provide companywide requirements and guidance on the purchases, sales and other dispositions of our securities by our directors, officers, employees and other covered persons, with the goal of promoting compliance with applicable insider trading laws, rules and regulations, and the listing standards of Nasdaq. The insider trading policy is filed as Exhibit 11.2 to this annual report on Form 20-F.

ITEM 16K. CYBERSECURITY

Risk Management and Strategy

We have implemented processes for assessing, identifying and managing material risks from cybersecurity threats and monitoring the prevention, detection, mitigation and remediation of material cybersecurity incident. We assess risks arising from cybersecurity threats against our information systems that may result in adverse effects on our information systems or any information residing therein. We conduct periodic assessments to identify such cybersecurity threats.

Following these risk assessments, we re-design, implement, and maintain reasonable safeguards to mitigate identified risks and reasonably address any identified gaps in existing safeguards. We regularly monitor and test our safeguards and regularly conduct training for our employees on these safeguards in collaboration with the administrative department and management. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with our IT department, to manage the risk assessment and mitigation process.

As of the date of this annual report, we have not experienced any material cybersecurity incidents or identified any material cybersecurity threats that have affected or are reasonably likely to materially affect us, our business strategy, results of operations or financial condition.

Governance

Our Company’s Board of Directors has oversight responsibility for the Company’s overall risk management, including cybersecurity risks, and has not delegated oversight authority for cybersecurity risks to any committee. Our management, led by our Chief Executive Officer and Chief Financial Officer, is responsible for assessing, identifying and managing material cybersecurity risks and threats to our Company and the prevention, mitigation and remediation of material cybersecurity incidents and risks. Our Chief Executive Officer, as the management representative, reports to the Board of Directors on an annual basis with respect to the status and updates of any material cybersecurity risks our Company may face and on disclosure concerning cybersecurity matters in our annual report on Form 20-F.

In 2024, we did not experience any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, we face potential cybersecurity threats that, if realized, would materially affect us. These threats include but are not limited to ransomware and malware attacks, and compromised business email and other social engineering threats. Our service providers, suppliers, customers and business partners also face similar cybersecurity risks, which could have an adverse impact on our business. Additional information on cybersecurity risks we face is discussed in Part I, Item 1A, “Risk Factors - While we are not aware of any data breach in the past, future cyberattacks, computer viruses or any failure to adequately maintain security and prevent unauthorized access to our information technology system or data could result in a disruption of our business operations and materially adversely affect our reputation, financial condition and operating results.”

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PART III

ITEM 17. FINANCIAL STATEMENTS.

See Item 18.

ITEM 18. FINANCIAL STATEMENTS.

The consolidated financial statements of Tantech Holdings Ltd are included at the end of this annual report, beginning with page F-1.

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ITEM 19. EXHIBITS.

1.1 (1)		Articles of Association of Tantech Holdings Ltd
1.2 (1)		Memorandum of Association of Tantech Holdings Ltd
1.3		Amended and Restated Memorandum and Articles of Association of Tantech Holdings Ltd (incorporated by reference to Exhibit 3.1 to Form 6-K filed with the SEC on January 15, 2026)
2.1 (2)		Specimen Common Share Certificate
2.2*		Description of Securities Registered under Section 12 of the Exchange Act
2.3		Form of Series A Warrant issued on April 26, 2024 (incorporated by reference to Exhibit 4.1 to Form 6-K filed with the SEC on April 25, 2024)
2.4		Form of Series B Warrant issued on April 26, 2024 (incorporated by reference to Exhibit 4.2 to Form 6-K filed with the SEC on April 25, 2024)
2.5		Form of Pre-Funded Warrant issued on April 26, 2024 (incorporated by reference to Exhibit 4.3 to Form 6-K filed with the SEC on April 25, 2024)
2.6		Promissory Note issued on August 1, 2024 (incorporated by reference to Exhibit 4.15 to Form 20-F/A filed with the SEC on September 18, 2025)
2.7		Promissory Note issued on September 5, 2024 (incorporated by reference to Exhibit 10.2 to Form 6-K filed with the SEC on September 10, 2024)
2.8		Form of Series A Warrant issued on January 7, 2025 (incorporated by reference to Exhibit 4.1 to Form 6-K filed with the SEC on January 8, 2025)
2.9		Promissory Note issued on October 14, 2025 (incorporated by reference to Exhibit 10.2 to Form 6-K filed with the SEC on October 17, 2025)
2.10		Form of Series C Warrant (incorporated by reference to Exhibit 4.1 to Form 6-K filed with the SEC on October 23, 2025)
2.11		Form of Series D Warrant (incorporated by reference to Exhibit 4.2 to Form 6-K filed with the SEC on October 23, 2025)
2.12		Form of Series E Warrant (incorporated by reference to Exhibit 99.3 to Form 6-K filed with the SEC on April 2, 2026)
2.13		Form of Series F Warrant (incorporated by reference to Exhibit 99.4 to Form 6-K filed with the SEC on April 2, 2026)
4.1		Translation of Employment Agreement with Zheyuan Liu, (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on June 3, 2025)
4.2*		Translation of Employment Agreement with Weilin Zhang
4.3(4)		Non-competition Agreement by and among Zhengyu Wang, Yefang Zhang, Farmmi, Inc., Tantech Holdings Ltd and CN Energy Group. Inc., dated March 29, 2021
4.4		Securities Purchase Agreement, dated April 22, 2024, by and between Tantech Holdings Ltd and the Purchasers (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on April 25, 2024)
4.5		Placement Agent Agreement, dated April 22, 2024, by and between Tantech Holdings Ltd and Maxim Group LLC (incorporated by reference to Exhibit 10.3 to Form 6-K filed with the SEC on April 25, 2024)
4.6		Note Purchase Agreement, dated August 1, 2024, by and between Tantech Holdings Ltd and Streeterville Capital, LLC (incorporated by reference to Exhibit 4.14 to Form 20-F/A filed with the SEC on September 18, 2025)
4.7		Exchange Agreement, dated September 5, 2024, by and between Tantech Holdings Ltd and Streeterville Capital, LLC
4.8		Inducement Agreement by and between Tantech Holdings Ltd and Securities Holders, dated January 7, 2025 (incorporated by reference to Exhibit 4.1 to Form 6-K filed with the SEC on January 8, 2025)
4.9		English Translation of Equity Transfer Agreement, dated April 24, 2025, by and between African Forest Group Limited and EAG International Vantage Capitals Limited (incorporated by reference to Exhibit 4.12 to the Form 20-F filed with the SEC on May 15, 2025)
4.10		English Translation of Equity Transfer Agreement, dated May 6, 2025, by and between Shanghai Jiamu Investment Management Co., Ltd. and Lishui Damushan Tea Co., Ltd. (incorporated by reference to Exhibit 4.13 to the Form 20-F filed with the SEC on May 15, 2025)
4.11		English Translation of Supplemental Agreement to Equity Transfer Agreement, dated June 30, 2025, by and between Shanghai Jiamu Investment Management Co., Ltd. and Lishui Damushan Tea Co., Ltd. (incorporated by reference to Exhibit 99.3 to Form 6-K filed with the SEC on December 19, 2025)
4.12		Note Purchase Agreement, dated October 14, 2025, by and between Tantech Holdings Ltd and Streeterville Capital, LLC (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on October 17, 2025)
4.13		Registration Rights Agreement, dated October 23, 2025, by and between Tantech Holdings Ltd and the Investors (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on October 23, 2025)
4.14		Securities Purchase Agreement, dated October 23, 2025, by and between Tantech Holdings Ltd and the Investors (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on October 23, 2025)
4.15*		English Translation of Termination Agreement, dated December 18, 2025, by and between African Forest Group Limited and EAG International Vantage Capitals Limited
4.16		Securities Purchase Agreement, dated March 31, 2026, by and between Tantech Holdings Ltd and the Investors (incorporated by reference to Exhibit 99.1 to Form 6-K filed with the SEC on April 2, 2026)
8.1*		List of subsidiaries
11.1 (3)		Code of Ethics
11.2		Insider Trading Policy (incorporated by reference to Exhibit 11.2 to the Form 20-F filed with the SEC on May 15, 2025)

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12.1*		Certification of the principal executive officer of the Registrant pursuant to Rule 13a-14(a) or 15(d)-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*		Certification of the principal financial officer of the Registrant pursuant to Rule 13a-14(a) or 15(d)-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1*		Certification of the principal executive officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2*		Certification of the principal financial officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1 (5)		2014 Equity Incentive Plan
23.1*		Consent Letter of YCM CPA INC.
97.1		Clawback Policy (incorporated by reference to Exhibit 97.1 to the Form 20-F filed with the SEC on June 11, 2024)
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

(1)	Previously filed with the registration statement on Form F-1, File No. 333-198788, filed on September 16, 2014, as amended and incorporated herein by reference.

(2)	Previously filed on Form F-1/A (File No. 333-198788), dated December 15, 2014 and incorporated herein by reference.

(3)	Previously filed on Form 20-F, dated April 30, 2015 and incorporated by reference.

(4)	Previously filed on Form 20-F, dated April 27, 2021 and incorporated herein by reference.

(5)	Incorporated by reference to Exhibit 99.1 to Form S-8 (File No. 333-203387) filed on April 13, 2015.

*	Filed herewith.

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	Tantech Holdings Ltd

	By:	/s/ Zheyuan Liu
	Name:	Zheyuan Liu
	Title:	Chief Executive Officer

		Date: May 14, 2026

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 6781)		F-2
Consolidated Balance Sheets as of December 31, 2025 and 2024		F-3
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023		F-4
Consolidated Statements of Equity for the years ended December 31, 2025, 2024 and 2023		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023		F-6
Notes to Consolidated Financial Statements		F-7 - F-39

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Shareholders of Tantech Holdings Ltd

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tantech Holdings Ltd and its subsidiaries (collectively, the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisition refund receivable

Description of the Matter

As described in Note 3 to the financial statements, the Company has an acquisition refund receivable totaling approximately $54.19 million as of December 31, 2025, of which approximately $10 million is current and approximately $44.19 million is non-current. We identified valuation (recoverability) of the acquisition refund receivable as a critical audit matter due to its non-routine transaction background (serving as a refund of cash, financing receivables and accounts receivables paid in connection with a cancelled investment), significant amount, and the involvement of significant management judgment regarding its recoverability, altogether requiring extensive audit efforts and significant audit judgment.

How the Critical Audit Matter Was Addressed in the Audit

In order to address the above matter, we performed the following audit procedures, among others:

	·	We reviewed the relevant legal documents regarding the investment cancellation and establishment of the acquisition refund receivable and verified the sufficiency of the relevant financial statement disclosures.
	·	We obtained and evaluated a third-party background check on the counterparty indicating ability to pay.
	·	We requested and received a confirmation letter from a knowledgeable external source (the counterparty) to obtain relevant and reliable audit evidence about outstanding balance and repayment schedule indicating willingness to pay.
	·	We tested subsequent cash collection from the counterparty indicating ability to pay.
	·	We evaluated the reasonableness of management's assessment of the acquisition refund receivable’s recoverability.

/s/ YCM CPA INC.

We have served as the Company’s auditor since 2021.

PCAOB ID 6781

Irvine, California

May 14, 2026

F-2

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2025			2024
Assets
Current assets
Cash	$	33,019,289		$	35,190,663
Restricted cash		44,775			-
Digital assets		19,958			-
Accounts receivable, net		27,795,715			32,607,591
Financing receivables, net		-			43,105,527
Refund receivable – current		10,009,867			-
Inventory, net		152,353			191,248
Due from a related party		-			118,025
Advances to suppliers, net		90,000			3,695,682
Prepaid taxes		489,302			468,457
Prepaid expenses and other receivables, net		2,369,422			1,538,014
Current assets of discontinued operations		-			887,186
Total current assets		73,990,681			117,802,393

Non-current assets
Property, plant and equipment, net		102,792			123,270
Deferred tax assets		4,642,493			-
Intangible assets, net		170,785			184,547
Right of use assets		882,187			1,060,426
Long-term investments		-			22,786,158
Refund receivable – non-current		44,185,538			-
Non-current assets of discontinued operations		-			995,012
Total non-current assets		49,983,795			25,149,413
Total assets	$	123,974,476		$	142,951,806

Liabilities and Equity
Current liabilities
Accounts payable	$	477,794		$	358
Contract liabilities		822,108			1,180,684
Due to related parties		3,791,711			11,576
Taxes payable		1,569,932			1,561,641
Lease liabilities – current		135,724			139,222
Loans payable to third parties		3,769,821			3,250,734
Convertible note		-			198,000
Accrued liabilities and other payables		659,890			393,490
Current liabilities of discontinued operations		-			5,020,263
Total current liabilities		11,226,980			11,755,968

Non-current liabilities
Warrant liabilities – non-current		1,653,000			2,000,000
Lease liabilities – non-current		745,120			919,781
Total non-current liabilities		2,398,120			2,919,781
Total labilities		13,625,100			14,675,749

Equity
Class A common share, no par value, unlimited shares authorized, 6,213,730 and 1,132,658 shares issued and outstanding as of December 31, 2025 and 2024, respectively; Class B common share, no par value, unlimited shares authorized, 1,142 and nil shares issued and outstanding as of December 31, 2025 and 2024, respectively.
Additional paid-in capital		103,467,206			94,768,246
Statutory reserves		102,747			102,747
Retained earnings		17,394,564			48,818,807
Accumulated other comprehensive loss		(10,615,141	)		(12,382,068	)
Equity attributable to Tantech Holdings Ltd		110,349,376			131,307,732
Non-controlling interest		-			(3,031,675	)
Total equity		110,349,376			128,276,057
Total liabilities and equity	$	123,974,476		$	142,951,806

The accompanying notes are an integral part of these consolidated financial statements.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	Years Ended December 31,
	2025			2024			2023
Revenues	$	38,359,163		$	42,940,136		$	44,631,115
Cost of revenues		31,217,636			33,997,253			34,914,317
Gross profit		7,141,527			8,942,883			9,716,798

Operating expenses
Selling		6,879			51,221			218,073
General and administrative		19,261,046			4,868,544			5,815,956
Research and development		78,570			38,800			23,942
Total operating expenses		19,346,495			4,958,565			6,057,971

(Loss) income from operations		(12,204,968	)		3,984,318			3,658,827

Other income (expenses)
Change in fair value of convertible note		(150,000	)		(504,006	)		(165,704	)
Change in fair value of warrants liabilities		568,000			(3,767,626	)		-
Changes in fair value of digital assets		(287	)		-			-
Interest income		348,130			43,157			49,628
Interest expense		(279,564	)		(290,366	)		(301,467	)
Financing interest income, net		352,529			1,842,282			2,180,970
Rental income from related party		-			-			111,317
Long- term investments impairment		(23,140,591	)		-			-
Gain (loss) from disposal of subsidiaries		3,576,755			(1,014,743	)		3,555,235
Gain from disposal of financing receivables		2,335,304			-			-
Loss on refund receivable		(4,424,099	)		-			-
Gain on debt extinguishment		-			298,213			-
Other (loss) income, net		(485,663	)		33,067			177,840
Total other (expenses) income, net		(21,299,486	)		(3,360,022	)		5,607,819

(Loss) income before income tax		(33,504,454	)		624,296			9,266,646
Income tax provision		(2,524,221	)		3,111,047			2,364,489
Net (loss) income from continuing operations		(30,980,233	)		(2,486,751	)		6,902,157
Net loss from discontinued operations		(61,426	)		(1,078,534	)		(1,884,611	)

Net (loss) income		(31,041,659	)		(3,565,285	)		5,017,546
Less: Net (loss) income attributable to non-controlling interest		(18,416	)		(323,515	)		(565,301	)
Net (loss) income attributable to the Company		(31,023,243	)		(3,241,770	)		5,582,847
Less: Deemed dividend to warrants holders		(401,000	)		-			-
Net (loss) income attributable to common stockholders of Tantech Holdings Ltd	$	(31,424,243	)	$	(3,241,770	)	$	5,582,847

Net (loss) income		(31,041,659	)		(3,565,285	)		5,017,546
Other comprehensive income (loss):
Foreign currency translation adjustment		1,766,415			86,797			(4,220,033	)
Comprehensive (loss) income		(29,275,244	)		(3,478,488	)		797,513
Less: Comprehensive loss attributable to non-controlling interest		(18,928	)		(318,923	)		(563,788	)
Comprehensive (loss) income attributable to common stockholders of Tantech Holdings Ltd	$	(29,256,316	)	$	(3,159,565	)	$	1,361,301

(Loss) earnings per share
Basic and diluted	$	(13.64	)	$	(7.66	)	$	80.69

Weighted Average Shares Outstanding
Basic and diluted		2,303,740			423,174			69,186

The accompanying notes are an integral part of these consolidated financial statements.

F-4

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

	Common Share					Additional Paid in			Statutory			Retained			Accumulated Other Comprehensive Income			Non- controlling			Total
	Class A			Class B		Capital			Reserves			Earnings			(Loss)			Interest			Equity
Balance at January 1, 2023		30,446			-	$	79,746,608		$	7,490,398		$	39,090,079		$	(8,242,727	)	$	(2,148,964	)	$	115,935,394
Proceeds received from issuance of common shares		56,000			-		5,834,325			-			-			-			-			5,834,325
Conversion of convertible note		8,479			-		438,000			-			-			-			-			438,000
Foreign currency translation adjustment		-			-		-			-			-			(4,221,546	)		1,513			(4,220,033	)
Net income		-			-		-			-			5,582,847			-			(565,301	)		5,017,546
Balance at December 31, 2023		94,925			-		86,018,933			7,490,398			44,672,926			(12,464,273	)		(2,712,752	)		123,005,232
Net proceeds from issuance of common shares and warrants (excluding warrant liability of $1,358,374 and offering cost of $377,500)		102,250			-		364,126			-			-			-			-			364,126
Issuance of common stock for warrants exercised		713,000			-		6,325,187			-			-			-			-			6,325,187
Conversion of convertible note		222,483			-		2,060,000			-			-			-			-			2,060,000
Appropriation of retained earnings to statutory reserve fund		-			-		-			(7,387,651	)		7,387,651			-			-			-
Foreign currency translation adjustment		-			-		-			-			-			82,205			4,592			86,797
Net loss		-			-		-			-			(3,241,770	)		-			(323,515	)		(3,565,285	)
Balance at December 31, 2024		1,132,658			-		94,768,246			102,747			48,818,807			(12,382,068	)		(3,031,675	)		128,276,057
Proceeds received from issuance of common shares		3,614,464			-		5,480,000			-			-			-			-			5,480,000
Issuance of inducement warrants		-			-		-			-			(401,000	)		-			-			(401,000	)
Issuance of common stock for warrants exercised		56,336			-		623,321			-			-			-			-			623,321
Cancellation of common stock due to reverse split		(133	)		-		(512	)		-			-			-			-			(512	)
Redesignated Class A common share to Class B common share		(1,142	)		1,142		-			-			-			-			-			-
Conversion of convertible note		192,059			-		348,000			-			-			-			-			348,000
Conversion of promissory note		1,219,488			-		2,248,151			-			-			-			-			2,248,151
Disposal of discontinued operations		-			-		-			-			-			-			3,050,603			3,050,603
Foreign currency translation adjustment		-			-		-			-			-			1,766,927			(512	)		1,766,415
Net loss		-			-		-			-			(31,023,243	)		-			(18,416	)		(31,041,659	)
Balance at December 31, 2025		6,213,730			1,142	$	103,467,206		$	102,747		$	17,394,564		$	(10,615,141	)	$	-		$	110,349,376

The accompanying notes are an integral part of these consolidated financial statements.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2025			2024			2023
Cash flows from operating activities
Net income (loss)	$	(31,041,659	)	$	(3,565,285	)	$	5,017,546
Less: Net loss from discontinued operations		61,426			1,078,534			1,884,611
Net loss from continuing operations		(30,980,233	)		(2,486,751	)		6,902,157
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Provision for expected credit loss - accounts receivable		17,327,139			1,449,753			730,964
Provision for expected credit loss - financing receivables		31,303			92,036			2,245,159
Provision for expected credit loss - prepaid expenses and other receivables		99,502			-			-
Gain on debt extinguishment		-			(298,213	)		-
Depreciation expense		18,384			6,519			199,009
Amortization of intangible asset		21,253			21,071			10,920
Loss (gain) from disposal of property, plant and equipment		3,839			-			(472	)
Deferred tax benefit		(4,516,927	)		-			-
Change in fair value of convertible note		150,000			504,006			165,704
Change in fair value of warrant liabilities		(568,000	)		3,767,626			-
Accrued compensation on convertible note		-			908,440			-
Changes in fair value of digital assets		287			-			-
Amortization of right of use assets		129,761			99,387			144,566
Loss on promissory note converted to shares		456,151			-			-
Long- term investments impairment		23,140,591			-			-
Loss (gain) on disposal of subsidiaries		(3,576,755	)		1,014,743			(3,555,235	)
Gain from disposal of financing receivables		(2,335,304	)		-			-
Loss on refund receivable		4,424,099			-			-
Changes in operating assets and liabilities:
Accounts receivable		(13,057,635	)		4,854,593			(3,545,224	)
Refund receivable		(21,895	)		-			-
Digital assets		(54	)		-			-
Advances to suppliers		3,663,243			(3,761,291	)		(17,956	)
Inventory		45,991			14,653			105,321
Prepaid expenses and other receivables		(399,663	)		(635,744	)		(65,840	)
Accounts payable		477,436			(817,724	)		1,304,624
Contract liabilities		(399,177	)		102,110			210,974
Accrued liabilities and other payables		260,698			(379,520	)		614,277
Customer deposits		-			308			(64,449	)
Lease liabilities		(129,622	)		(162,385	)		(144,566	)
Taxes payable		(58,785	)		1,142,983			24,427
Net cash (used in) provided by continuing operations		(5,794,373	)		5,436,600			5,264,360
Net cash used in discontinued operations		(21,766	)		(73,663	)		(4,070	)
Net cash (used in) provided by operating activities		(5,816,139	)		5,362,937			5,260,290

Cash flows from investing activities
Acquisition of property, plant and equipment		-			(80,525	)		(431	)
Cash received (out) from disposition of subsidiaries		79,018			(889	)		-
Proceeds from disposal of property, plant and equipment		677			-			1,645
Acquisition of intangible assets		-			-			(213,170	)
Financing receivables		(626,061	)		(1,840,722	)		(2,180,970	)
Loans to third parties		(529,503	)		(1,377,787	)		-
Net cash used in continuing operations		(1,075,869	)		(3,299,923	)		(2,392,926	)
Net cash used in discontinued operations		-			-			(182,557	)
Net cash used in investing activities		(1,075,869	)		(3,299,923	)		(2,575,483	)

Cash flows from financing activities
Proceeds from loans from third parties		-			2,223,000			224,521
Repayment of loans from third parties		3,354,690			(2,433,093	)		-
Cancellation of common stock due to reverse split		(512	)		-			-
Repayment of bank loans		-			-			(423,675	)
Repayment of loans from related parties		(151,757	)		(964,656	)		(217,305	)
Proceeds from loans from related parties		299,737			-			-
Proceeds from (repayment of) convertible note		-			(285,714	)		1,999,990
(Payment to) proceeds from issuance of common stock and warrants		(520,000	)		1,722,500			5,834,325
Proceeds from exercising of warrants		443,321			3,199,187			-
Net cash provided by continuing operations		3,425,479			3,461,224			7,417,856
Net cash (used in) provided by discontinued operations		(693	)		8,001			11,702
Net cash provided by financing activities		3,424,786			3,469,225			7,429,558

Effect of exchange rate changes on cash and restricted cash		1,319,953			553,862			29,356

Net increase (decrease) in cash and restricted cash		(2,147,269	)		6,086,101			10,143,721

Cash and restricted cash, beginning of year		35,211,333			29,125,232			18,981,511

Cash and restricted cash, end of year	$	33,064,064		$	35,211,333		$	29,125,232

Supplemental disclosure information:
Income taxes paid	$	1,976,696		$	1,844,265		$	2,290,143
Interest paid	$	-		$	254,783		$	92,181

Non-cash transactions of investing and financing activities
Conversion of convertible note	$	348,000		$	2,060,000		$	438,000
Conversion of promissory note	$	2,248,151		$	-		$	-
Consideration from disposal of subsidiaries offset with accounts payable	$	-		$	250,149		$	-
Right-of-use assets obtained in exchange for lease liabilities	$	-		$	1,094,557		$	-
Reclassification of warrant liability to equity upon exercise of warrants	$	180,000		$	3,126,000		$	-
Deemed distribution on issuance of induced warrants	$	401,000			-			-
Loan payable to third party settled by accounts receivable	$	1,062,249		$	-		$	-
Refund receivable settled by financing receivable	$	9,730,048		$	-		$	-
Digital assets received from private placement	$	6,000,000		$	-		$	-
Digital assets received from related party	$	3,750,000		$	-		$	-

RECONCILIATION TO AMOUNTS ON CONSOLIDATED BALANCE SHEETS:
Cash and restricted cash	$	33,064,064		$	35,190,663		$	29,061,639
Cash and restricted cash included in current assets of discontinued operations		-			20,670			63,593
Total cash and restricted cash shown in the statement of cash flows	$	33,064,064		$	35,211,333		$	29,125,232

The accompanying notes are an integral part of these consolidated financial statements.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Organization and Nature of Business

Tantech Holdings Ltd (“Tantech BVI” or “the Company”) is a holding company established under the laws of the British Virgin Islands on November 9, 2010. Tantech BVI, through its subsidiaries (together as the “Group”) engages in research, development, production and distribution of various products made from bamboo and investment in mining exploration.

As of December 31, 2025, details of the subsidiaries of the Group and their principal business activities are set out below:

Name of Entity	Date of Incorporation	Place of Incorporation	% of Ownership	Principal Activities
Tantech Holdings Ltd (“Tantech” or “Tantech BVI”)	November 9, 2010	BVI	Parent	Holding Company
EAG International Vantage Capitals Limited (“Euroasia”)	April 27, 2015	Hong Kong	100% by the Parent	Holding Company
USCNHK Holding Limited (“USCNHK Holding ”)	December 13, 2024	Hong Kong	100% by the Parent	Holding Company
EPakia Inc. (“EPakia”)	May 19, 2022	United States	100% by the Parent	Marketing and selling
Tanhome Inc (“Tanhome Holding”) (i)	December 3, 2024	United States	100% by the Parent	Holding Company
Tanhome Group Inc (“Tanhome”) (i)	December 3, 2024	United States	100% by Gohomeway Holding	Construction materials sales and services business
China East Trade Co., Ltd. (“China East”)	February 15, 2018	Hong Kong	100% by Euroasia	Investing in the factoring industry
Euroasia New Energy Automotive (Jiangsu) Co. Ltd. (“Euroasia New Energy”)	October 24, 2017	Zhangjia Gang, Jiangsu Province, China	100% by Euroasia	Holding Company
Shanghai Jiamu Investment Management Co., Ltd (“Jiamu”)	July 14, 2015	Shanghai, China	100% by Euroasia	Holding Company
Shangchi (Zhejiang) Intelligent Equipment Co., Ltd. (“Shangchi Intelligent Equipment”)	August 26, 2021	Pinghu Zhejiang Province, China	100% by Euroasia	Manufacturing and sales company focusing on new energy vehicles
Eurasia Holdings (Zhejiang) Co., Ltd. (“Eurasia Holdings”)	July 15, 2021	Hangzhou Zhejiang province, China	100% by Euroasia	Marketing and selling electric vehicles
Zhejiang Shangnilai Technology Co., Ltd. (“Shangnilai”)	November 12, 2020	Lishui, Zhejiang Province, China	100% by Jiamu	Manufacturing, selling and trading various products made from bamboo and charcoal

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Organization and Nature of Business (continued)

Name of Entity	Date of Incorporation	Place of Incorporation	% of Ownership	Principal Activities
Lishui Smart New Energy Automobile Co., Ltd. (“Lishui Smart”)	November 16, 2020	Lishui, Zhejiang Province, China	100% by Jiamu	Research, development and manufacturing new energy automobiles
Zhejiang Zhuguxingqi Technology Co., Ltd	August 10, 2023	Lishui, Zhejiang Province, China	100% by Jiamu	Manufacturing, selling and trading various products made from bamboo and charcoal
Shanghai Wangju Industrial Group Co., Ltd. (“Shanghai Wangju”)	September 23, 2021	Shanghai, China	100% by Jiamu	Investing in the factoring industry
Gangyu Trading (Jiangsu) Co., Ltd. (“Gangyu Trading”)	August 10, 2021	Zhangjiagang Jiangsu Province, China	100% by Euroasia New Energy	Marketing and selling electric vehicles
Hangzhou Eurasia Supply Chain Co., Ltd. (“Eurasia Supply”)	August 4, 2021	Hangzhou Zhejiang province, China	100% by Eurasia Holdings	Supply chain business
Zhejiang Shangchi Medical Equipment Co., Ltd. (“Shangchi Medical”) (ii)	November 13, 2021	Pinghu Zhejiang Province, China	100% by Shangchi Intelligent Equipment	Manufacturing and sales company focusing on new energy vehicles
Shenzhen Shangdong Trading Co., Ltd. (“Shenzhen Shangdong”)	July 13, 2016	Shenzhen Guangdong Province, China	100% by Shanghai Wangju	Investing in the factoring industry
First International Commercial Factoring (Shenzhen) Co., Ltd. (“First International”)	July 27, 2017	Shenzhen Guangdong Province, China	75% by Shenzhen Shangdong 25% by China East	Investing in the factoring industry

(i) On May 7, 2025, Gohomeway Inc changed its name to Tanhome Inc (“Tanhome Holding”), and Gohomeway Group Inc changed its name to Tanhome Group Inc (“Tanhome”)

(ii) Shangchi Medical was deregistered on October 13, 2025.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).

Principles of consolidation

The consolidated financial statements include the financial statements of Tantech BVI and its subsidiaries (collectively, the “Company”). All significant inter-company balances and transactions are eliminated upon consolidation.

Non-controlling interest

Non-controlling interest represents 30% of the equity interest in Shangchi Automobile and its subsidiary.

Use of estimates

In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant accounting estimates required to be made by management include, but are not limited to provision for credit losses, contingent liabilities, income taxes, inventory valuation, warrants, useful lives of property and equipment, and impairment of long-term investments.

Reclassifications

Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes.

Discontinued operations

A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. In the period that a discontinued operation is classified as held for sale, the assets and liabilities of the discontinued operation are presents separately in asset and liability sections, respectively, of the consolidated balance sheets and prior periods are presented on a comparative basis. In the consolidated statements of operations and comprehensive (loss)/income, the results from discontinued operations are reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. Cash flows for discontinued operations are presented separately in the consolidated statements of cash flows. Unless otherwise noted, discussion in the Notes to consolidated financial statements refers to the Group’s continuing operations.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

Fair value of financial instruments

Accounting Standards Codification ("ASC") 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3 - inputs to the valuation methodology are unobservable.

Unless otherwise disclosed, the fair value of the Group’s financial instruments including cash equivalents, derivative financial instruments, and non-marketable equity securities.

Assets and liabilities measured or disclosed at fair value on a recurring basis

The following tables represent the fair value hierarchy of the Group’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:

	As of December 31, 2025
	Fair Value Measurement at the Reporting Date using
	Quoted price in active markets for identical assets Level 1		Significant other observable inputs Level 2		Significant unobservable inputs Level 3		Total
Financial assets:
Digital assets(i)	$	19,958	$	-	$	-	$	19,958

Financial liabilities:
Warrant liabilities (ii)	$	-	$	-	$	1,653,000	$	1,653,000

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

	As of December 31, 2024
	Fair Value Measurement at the Reporting Date using
	Quoted price in active markets for identical assets Level 1		Significant other observable inputs Level 2		Significant unobservable inputs Level 3		Total
Financial liabilities:
Convertible note (ii)	$	-	$	-	$	198,000	$	198,000
Warrant liabilities (iii)		-		-		2,000,000		2,000,000
Total	$	-	$	-	$	2,198,000	$	2,198,000

(i)

The Group ‘s digital assets is comprised of USDT. The Group holds digital assets solely for its own account, which are measured at fair value in accordance with ASU 2023-08. Digital assets are initially recorded at cost, which generally equals the transaction price at the time of acquisition, and are subsequently measured at fair value using quoted market prices from the Group's principal market. Digital assets held are received as a form of payment and are converted to cash or used to fulfill expenses nearly immediately, in the ordinary course of the Group's business. A reconciliation of this digital asset activity is not provided as the associated risk of exposure to digital assets, even during the periods of significant activity, is immaterial. The following table presents the Group’s USDT holdings as of December 31, 2025.

		Quantity				Cost Basis				Fair Value
USDT			19,926			$	19,926			$	19,958

The following table presents additional information about USDT for the years ended December 31, 2025:

	Years ended December 31,
	2025
Opening balance	$	-
Collection of USDT from private placement		6,000,000
Collection of USDT from related party		3,750,000
Paid for acquisition		(9,730,048	)
Surcharges		(26	)
Ending balance	$	19,926

(ii)

The Group has elected to recognize the convertible note at fair value; therefore, there was no further evaluation of embedded features for bifurcation. The Group engaged a third-party valuation firm to perform the valuation of the convertible note. The fair value of the convertible note was calculated using the Scenario-based Discounted Cash Flows with Monte Carlo Simulation Model (the "Monte Carlo Model”). The following is a reconciliation of the beginning and ending balances for the convertible note measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2025, 2024 and 2023:

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

	Years ended December 31,
	2025			2024			2023
Opening balance	$	198,000		$	1,727,694		$	-
New convertible note issued		-			-			1,999,990
Change in fair value of convertible note		150,000			504,006			165,704
Forbearance and other fee		-			610,227			-
Gain on debt extinguishment		-			(298,213	)		-
Conversion of convertible note		(348,000	)		(2,060,000	)		(438,000	)
Cash repaid		-			(285,714	)		-
Ending balance	$	-		$	198,000		$	1,727,694

(iii)

The freestanding warrants issued in connection with the April 2024 Private Placement were determined to be derivatives that were accounted for as warrant liabilities measured at fair value on a recurring basis (Note 12). The Group engaged a third-party valuation firm to perform the valuation of the warrant liabilities using the Monte Carlo Model with significant unobservable inputs to measure the fair value of the warrant liability (Level 3). The following is a reconciliation of the beginning and ending balances for warrants liabilities measured at fair value for the years ended December 31, 2025 and 2024:

	Years ended December 31,
	2025			2024
Opening balance	$	2,000,000		$	-
Warrants issued in connection with the April 2024 Private Placement		401,000			1,358,374
Change in fair value of warrant liabilities		(568,000	)		3,767,626
Reclassification of warrant liabilities to equity upon exercise of warrants		(180,000	)		(3,126,000	)
Ending balance	$	1,653,000		$	2,000,000

Assets measured at fair value on a nonrecurring basis

In addition to assets that are recorded at fair value on a recurring basis, the impairment assessment may subject our long-term investment to nonrecurring fair value measurement. For the year ended December 31, 2025, the Group recorded $23,140,591 of impairment charge on its long-term investments based on the related fair value assessment performed with assistance from independent valuation firm. The various inputs to this fair value technique are considered Level 3. For the year ended December 31, 2024 and 2023, no impairment charge was recorded on long term investments.

Concentrations of credit risk

Financial instruments which potentially subject the Group to concentrations of credit risk consist principally of cash, cash equivalents and restricted cash, accounts receivable and financing receivable. All of the Group’s cash is maintained with banks within the People’s Republic of China, where there is a RMB500,000 deposit insurance limit for a legal entity’s aggregated balance at each maintained bank. The Group has not experienced any losses in such accounts. A significant portion of the Group’s sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The Group also engages in factoring business to earn interest income. The Group performs ongoing credit evaluations of its customers to reduce credit risk.

Cash

Cash comprises cash at banks and on hand.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

Restricted cash

Cash that is restricted as to withdrawal or for use is reported separately on the face of consolidated balance sheet. The Group’s restricted cash comprises cash frozen in the dormant bank accounts.

Digital assets

The Group holds digital assets, consisting primarily of Tether tokens (“USDT”). The Group has evaluated its USDT holdings under ASC 350-60, Intangibles—Goodwill and Other—Crypto Assets, and concluded that the holdings meet the scope criteria for digital assets. The Group does not classify digital assets as cash or cash equivalents.

Digital assets are initially recognized at cost and subsequently measured at fair value in accordance with ASC 820, Fair Value Measurement. Changes in fair value are recognized in net income and presented in changes in fair value of digital assets in the consolidated statements of operations.

Digital assets are presented separately on the consolidated balance sheets as digital assets measured at fair value. Upon sale, exchange, or other disposition, realized gains or losses are recognized in net income.

Accounts receivable, net

The Group follows Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the Group to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. The Group generally provides a three - month credit term to its customers after delivery. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the unaudited condensed consolidated statements of operations and comprehensive income. Delinquent account balances are written-off against the allowance for credit losses after management has determined that the likelihood of collection is not probable.

Financing receivables, net

Financing receivables represent receivables arising from the Group’s factoring business. Financing receivables are measured at amortized cost and reported on the unaudited condensed consolidated balance sheets based on the outstanding principal adjusted for any write-off and the allowance. Amortized cost of financing receivables is equal to the unpaid principal balance plus interest receivable. The Group recognizes financial interest income over the terms of the financing receivables using the effective interest rate method.

In accordance with ASC 326, the Group aggregates financing receivables sharing similar risk characteristics into a single pool for purposes of measuring expected credit losses, and the Group records an allowance for credit losses on financing receivables including accrued interest on a combined basis. The provision of credit losses for financing receivables is based upon the current expected credit losses (“CECL”) model, and the Group utilizes the discounted cash flow (“DCF”) method to determine the expected credit losses for the financing receivables by comparing the amortized cost of the financing receivables with the present value of the projected cashflow for the underlying collaterals. In assessing the CECL, the Group considers both quantitative and qualitative information that is reasonable and supportable, including the value of collaterals, terms of the financing receivables, historical credit loss experience, and industry recovery rates for financing receivables with similar risk characteristics, as well as other conditions that may be beyond the Group’s control. Financing receivables that are deemed uncollectible when all collection efforts have been exhausted are written off against the allowance for credit losses. Given that substantially all of the Group’s financing receivables are collateralized by pledged receivables with large state-owned entities and well-established companies, the financing receivables are not written off unless the net realizable value of the underlying collateral is less than the carrying amount.

Inventory, net

The Group values its inventory at the lower of cost or net realizable value. Cost is computed using the weighted average cost method. The Group reviews its inventory periodically to determine if any markdown is necessary for potential obsolescence or if a write-down is necessary if the carrying value exceeds net realizable value.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

Advances to suppliers, net

In order to ensure a steady supply of raw materials or goods, the Group is required from time to time to make cash advances when placing its purchase orders. The Group reviews its advances to suppliers on a periodic basis and makes general and specific allowances when there is doubt as to the ability of a supplier to refund an advance or provide supplies to the Group.

Property, plant and equipment, net

Property, plant and equipment are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and costs necessarily incurred to bring it to the condition and location for its intended use.

Depreciation is computed on a straight-line basis over the estimated useful lives of the respective assets, as follows:

Machinery and production equipment		10 years
Transportation equipment		5 years
Office equipment		5 years
Electronic equipment		3 years

Upon retirement or disposition of property, plant, and equipment, the cost and related accumulated depreciation are eliminated, and any resulting gain or loss is recorded in earnings. Repairs and maintenance costs are normally charged to earnings in the year in which they are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset.

Intangible assets, net

Intangible assets are acquired individually or as part of a group of assets, and are initially recorded at cost. The cost of a group of assets acquired in a transaction is allocated to the individual assets based on their relative fair values. Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets with finite useful lives are amortized using a straight-line method over the period of estimated useful life. The estimated useful lives of the Group’s intangible assets are as follows:

Estimated

Useful Life

Software

2 years

Patents

10 years

The Group evaluates intangible assets for impairment whenever events or changes in circumstances indicate that the assets might be impaired.

Impairment of long-lived assets

The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, the Group evaluates the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

Long-term investment

Long-term investments primarily consist of equity investments in privately held entities accounted for using the measurement alternative and equity investments accounted for using the equity method.

Equity investments without readily determinable fair values

For equity investments for which the Group does not have significant influence over the investee or the underlying shares the Group invested in are not considered in-substance common stock and have no readily determinable fair value, the Group records its share of measurement alternative investments at cost, less impairment, plus or less subsequent adjustments for observable price changes in orderly transactions for identical or similar investments of the same issuer, and record dividends received from the net accumulated earnings of the investee as investment income. Dividends received in excess of earnings are considered a return of investment and are recorded as reductions in the cost of the investments.

Equity investments accounted for using the equity method

The Group accounts for its equity investments over which it has significant influence but does not own a majority equity interest or otherwise control using the equity method. The Group adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the earnings or loss of the investee after the date of investment.

Long-term investments are evaluated for impairment when facts or circumstances indicate that the fair value of the investment is less than its carrying value. An impairment is recognized when a decline in fair value is determined to be other-than-temporary. The Group reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near term prospects of the investments; and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

Loans payable to third parties

Loans payable to third parties represent amounts the Group borrowed from third parties to obtain working capital.

Leases

The Group determines if an arrangement is or contains a lease at inception or modification of the arrangement. An arrangement is or contains a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period in exchange for consideration. Control over the use of the identified assets means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. The Group recognizes right-of-use assets and operating lease liabilities for lessee operating leases other than those with a term of 12 months or less as the Group has elected to apply the short-term lease recognition exemption. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments over the lease term.

Operating lease right-of-use assets and lease liabilities are measured at the lease commencement date based on the present value of the remaining lease payments over the lease term, discounted using the Group’s incremental borrowing rate, which approximates the interest rate at which the Group could borrow on a collateralized basis with similar terms and payments and in similar economic environments. Operating lease right-of-use assets also include initial direct costs incurred and prepaid lease payments, minus any lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. All lease and non-lease components, principally common area maintenance costs, are combined in determining operating lease right-of-use assets and lease liabilities. For operating leases, lease expense is recognized on a straight-line basis over the lease term.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

Revenue recognition

Revenue is recognized when control of promised goods or services is transferred to the Group’s customers and the collectability of an amount that the Group expects in exchange for those goods or services is probable. The Group’s revenues from continuing operations are primarily derived from selling of products

The Group recognizes sales revenues, net of sales taxes and estimated sales returns, at the time the product is picked up by the customer or delivered to the customer and control is transferred (point of sale).

Revenue is reported net of all value-added taxes. The Group does not routinely permit customers to return products and historically, customer returns have been immaterial.

In accordance with the Group's policy and the stated terms, the Group offers standard rebates to certain long-term cooperative customers who can reach the minimum threshold to be eligible for the rebate, which are accounted for as variable consideration. When the rebates can be reasonably estimated based on the Group's past experiences and current forecasts, such rebates is recognized as reductions to revenue based on the amount the Group expect to pay. The Group reviews and updates these estimate regularly until the incentives such as rebates are realized and the impact of any adjustments are recognized in the period the adjustments are identified. In most cases, key sales terms such as pricing and quantities ordered are established on a regular basis such that most customer incentive arrangements have a duration of less than one year.

Contract liabilities

A contract liability is recognized when a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods. Contract liabilities are recognized as revenue when the Company performs under the contract. As of December 31, 2025 and 2024, contract liabilities amounted to approximately $822,108 and $1,180,684, respectively.

Cost of revenues

Cost of revenues includes cost of raw materials and goods purchased, inbound freight cost, cost of direct labor, depreciation expense and other overhead. Write-down of inventory for lower of cost or net realizable value adjustments is also recorded in cost of revenues.

Shipping and handling

Shipping and handling costs are expensed as incurred and included in selling expenses.

Foreign currency translation

The assets and liabilities of foreign subsidiaries that use the local currency as their functional currency are translated to U.S. dollars based on the current exchange rate prevailing at each balance sheet date and any resulting translation adjustments are included in accumulated other comprehensive loss. The assets and liabilities of foreign subsidiaries whose local currency is not their functional currency are remeasured from their local currency to their functional currency and then translated to U.S. dollars. Revenues and expenses are translated into U.S. dollars using the average exchange rates prevailing for each period presented. The USD effects that arise from changing translation rates are recorded in foreign currency translation adjustments on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

	December 31, 2025			December 31, 2024			December 31, 2023
US$: RMB exchange rate	Period End	$	6.9931	Period End	$	7.2993	Period End	$	7.0999
	Average	$	7.1875	Average	$	7.1957	Average	$	7.0809

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

Comprehensive income (loss)

Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under GAAP are recorded as an element of stockholders’ equity but are excluded from net income (loss). Other comprehensive income (loss) consists of foreign currency translation adjustment from those subsidiaries not using the U.S. dollar as their functional currency.

Income taxes

The Group’s subsidiaries in China are subject to the income tax laws of the PRC. No taxable income was generated outside the PRC as of June 30, 2025. The Group accounts for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Group is able to realize their benefits, or future deductibility is uncertain.

ASC 740 10 25 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. The statute of limitation on the PRC tax authority’s audit or examination of previously filed tax returns expires three years from the date they were filed. There were no material uncertain tax position as of December 31, 2025 and 2024.

Value-added tax (“VAT”)

The Group is subject to VAT for selling merchandise. The applicable VAT rate ranges up to 13%. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of the PRC, the Group pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax office has the right to assess a penalty based on the amount of taxes which is determined to be late or deficient, with any penalty being expensed in the period when a determination is made by the tax authorities that a penalty is due. During the reporting periods, the Group had no dispute with PRC tax authorities and there was no tax penalty incurred. The VAT balance is recorded either in other current liabilities or other current receivables on the consolidated balance sheets.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

Warrants

The Group accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of each warrant’s specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent annual period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

(Loss) earnings per share (“EPS”)

Earnings (loss) per common share is calculated in accordance with ASC 260, Earnings per Share. Basic earnings (loss) per common share is computed by dividing the net income (loss) attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between Ordinary Shares and other participating securities based on their participating rights. Diluted income per share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive potential ordinary shares outstanding during the period. Potential ordinary shares include ordinary shares issuable upon the exercise of outstanding share options by using the treasury stock method and ordinary shares issuable upon the conversion of convertible instruments using the if-converted method. Potential ordinary shares are not included in the denominator of the diluted net (loss)/earnings per share calculation when inclusion of such shares would be anti-dilutive.

Risks and uncertainties

Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash. As of December 31, 2025 and 2024, $32,994,542 and $35,032,534 were deposited with financial institutions located in the PRC, respectively, where there is a RMB500,000 deposit insurance limit for a legal entity’s aggregated balance at each bank; $69,522 and $158,129 were deposited with financial institutions located in the United States, respectively, where there is a $250,000 deposit insurance limit for a legal entity’s aggregated balance at each bank. As a result, the amounts not covered by deposit insurance were $32,829,754 and $34,907,145 as of December 31, 2025 and 2024, respectively. The Group has not experienced any losses on such accounts. A significant portion of the Group’s sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The Group also engages in factoring business to earn interest income. The Group performs ongoing credit evaluations of its customers to reduce credit risk.

The majority operations of the Group are located in the PRC. Accordingly, the Group’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC in addition to the general state of the PRC economy. The Group’s operating results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

The majority of the Group’s sales, purchases and expense transactions are denominated in RMB, and majority of the Group’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China, the central bank of China. Remittances in currencies other than RMB may require certain supporting documentation in order to affect the remittance.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

The Group does not carry any business interruption insurance, products liability insurance or any other insurance policy except for a limited property insurance policy. As a result, the Group may incur uninsured losses, increasing the possibility that investors would lose their entire investment in the Group.

The Group had certain customers whose revenue individually represented 10% or more of the Group’s total revenue or whose accounts receivable balances individually represented 10% or more of the Group’s total accounts receivable, as follows:

For the year ended December 31, 2025, three major customers accounted for approximately 34%, 23% and 20% of the Group’s total sales, respectively. For the year ended December 31, 2024, three major customers accounted for approximately 27%, 25% and 18% of the Group’s total sales, respectively. For the year ended December 31, 2023, three major customers accounted for approximately 26%, 24% and 24% of the Group’s total sales, respectively.

As of December 31, 2025, three customers accounted for approximately 34%, 30% and 20% of the Group’s accounts receivable balance, respectively.

As of December 31, 2024, three customers accounted for approximately 34%, 28% and 20% of the Group’s accounts receivable balance, respectively.

The Group also had certain major suppliers whose purchases individually represented 10% or more of the Group’s total purchases. For the year ended December 31, 2025, three major suppliers accounted for approximately 22%, 15% and 11% of the Group’s total purchases, respectively. For the year ended December 31, 2024, two major suppliers accounted for approximately 44% and 12% of the Group’s total purchases, respectively. For the year ended December 31, 2023, three major suppliers accounted for approximately 42%, 18%, and 10% of the Group’s total purchases, respectively.

Recent accounting pronouncements

The Group considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

In December 2023, the FASB issued ASU No. 2023-09, “Income Tax (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2025. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. Once adopted, this ASU will result in additional disclosures. The Group is currently assessing the potential impact of the rule on our disclosures.

In May 2025, the FASB issued ASU No. 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity” (“ASU 2025-03”). ASU 2025-03 clarifies the guidance to determine the accounting acquirer in a business combination that is effected primarily by exchanging equity interests, when the legal acquiree is a variable interest entity (“VIE”) that meets the definition of a business. ASU 2025-03 requires entities to consider the same factors in ASC 805, Business Combinations, required for determining which entity is the accounting acquirer in other acquisition transactions. ASU 2025-03 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-03 is required to be applied on a prospective basis to any acquisition transaction that occurs after the initial application date. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

In May 2025, the FASB issued ASU No. 2025-04, “Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)” (“ASU 2025-04”). ASU 2025-04 revises the definition of the term performance condition for share-based consideration payable to a customer to incorporate conditions that are based on the volume or monetary amount of a customer’s purchases or potential purchases. ASU 2025-04 also eliminates the policy election to account for forfeitures as they occur for awards with service conditions. ASU 2025-04 also clarifies that ASC 606 variable consideration guidance does not apply to share-based payments to customers; instead, vesting probability should be assessed solely under ASC 718, Compensation—Stock Compensation. ASU 2025-04 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-04 may be applied on either a modified retrospective basis or on a retrospective basis. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In July 2025, the FASB issued ASU No. 2025-05, “Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”). ASU 2025-05 amends ASC 326, “Financial Instruments—Credit Losses” and introduces a practical expedient available for all entities and an accounting policy election available for all entities, other than public business entities, that elect the practical expedient. These changes apply to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue Recognition. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This simplifies the estimation process for short-term financial assets. ASU 2025-05 is effective for the Company’s annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied on a prospective basis. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”) to modernize the accounting for internal-use software costs, primarily by simplifying the requirements to capitalize software development costs. This update is effective beginning with the Group’s 2028 fiscal year annual reporting period, with early adoption permitted. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”) to establish authoritative guidance on the accounting for government grants received by business entities. This update is effective beginning with the Group’s 2029 fiscal year annual reporting period, with early adoption permitted. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 is intended to improve the navigability of required interim disclosures and clarify when that guidance is applicable, and also to provide additional guidance on what disclosures should be provided in interim reporting periods. ASU 2025-11 is effective for public business entities for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Group is currently evaluating the impact of ASU 2025-11 on its financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements (“ASU 2025-12”). ASU 2025-12 makes thirty-three incremental improvements to generally accepted accounting principles. ASU 2025-12 is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Group is currently evaluating the impact of ASU 2025-12 on its financial statements and related disclosures.

Except for the above-mentioned pronouncements, there are no new recently issued accounting standards that will have material impact on the consolidated financial statements.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Acquisition and Cancellation

On April 25, 2025, the Group closed an equity acquisition agreement with a third party (the “Seller”), under which the Group purchased 85% equity interest in Xintong International Trading Co., Ltd. (“Xintong International”) for a consideration of $69,788,554 (RMB488,038,338), consisting of (i) the first tranche payment of $48,004,462 (RMB335,700,000), which was settled on April 25, 2025 by transferring $45,604,238 (RMB318,915,000) of financing receivables to the Seller; (ii) the second tranche payment of $13,584,819 (RMB95,000,000), of which $9,730,048 was paid in the form of Tether (USDT) in August 2025 and November 2025, with the remainder yet to be settled; and (iii) the third tranche payment of $8,199,273 (RMB57,338,338), which was settled on July 1, 2025 by transferring accounts receivable.

Xintong International owns 100% equity interest in Shanghai Senhuixin Technology Co., Ltd.(“Senhuixin”), a PRC holding company, which owns 30% equity interest in Shandong Liansen Development Co., Ltd (“Shandong Liansen”). Shandong Liansen owns and manages certain land use rights and forests and plants that can be used for Chinese herbal medicine cultivation and flower cultivation. Given that (i) substantially all of the fair value of the gross assets acquired is concentrated in a single asset, which is Senhuixin’s 30% equity interest in Shandong Liansen, and (ii) Xintong International and its wholly owned subsidiary Senhuixin have not commenced any operation before this acquisition, Xintong International together with its wholly owned subsidiary Senhuixin does not constitute a business, and therefore the acquisition was accounted for as an asset acquisition, i.e., the Group acquired the 30% equity interest in Shandong Liansen.

On December 18, 2025, due to the delayed commercial development plan on the forests and plants, the Group renegotiated with the Seller and both parties reached into agreement to unwind the above acquisition transaction. The Seller is required to transfer the remaining accounts receivable of $7,484,283 (RMB52,338,338) back to the Group and shall repay the remaining consideration (the "refund receivable") in aggregate of $58,597,187 (RMB409,775,985) in four tranches, before March 31, 2028.

As of December 31, 2025, the Group received accounts receivable of $7,484,283 (RMB52,338,338) transferred back by the Seller and the fair value of the remaining refund receivable was determined at $54,050,103 (RMB377,977,772) based on the present value of future repayments using the discounted rate of 7.0%, determined by reference to the Group's incremental borrowing rate., which represents the rate that would be reflected in the Group's weighted average cost of borrowing for the borrowing of a similar duration and amount. As a result, the Group recognized a loss of $4,424,099 (RMB31,798,213) related to unwinding the transaction.

As of December 31, 2025, the Group had the refund receivable of $54,050,103, and the Group recorded interest income of $145,302 on the refund receivable for the year ended December 31, 2025.

Note 4 – Divestitures

On March 16, 2024, the Group signed a share transfer agreement with a third party to sell its 100% equity interest in Zhejiang Tantech Bamboo Charcoal Co., Ltd. (“Tantech Charcoal”) for a consideration of $246,599 (RMB1.8 million). For the year ended December 31, 2024, the Group recorded a gain of $1,008,290 resulting from the disposition of Tantech Charcoal, which is reflected in gain (loss) from disposal of subsidiaries on the Consolidated Statement of Operations. Revenues and net income of Tantech Charcoal were $6,331,354 and $1,385,657, respectively, for the year ended December 31, 2024, $43,045,679 and $8,142,194, respectively, for the year ended December 31, 2023, and $49,010,850 and $5,851,977, respectively, for the year end December 31, 2022. The disposition is not considered a strategic shift to the Group’s business nor to have a major effect on the Group’s operation and financial results; therefore, it is not reported as a discontinued operation.

On December 25, 2024, the Group entered into a share transfer agreement with a third party. Under the agreement, the Group agreed to sell all of the equity in USCNHK Group Limited (“USCNHK”) and its wholly owned subsidiaries, Tantech Holdings (Lishui) Co., Ltd., Hangzhou Tanbo Technology Co., Ltd. and Lishui Xincai Industrial Co., Ltd., to the third party for $1,269 (approximately HKD10,000). For the year ended December 31, 2024, the Group recorded a loss of $2,023,033 resulting from the disposition of USCNHK, which is reflected in gain (loss) from disposal of subsidiaries on the Consolidated Statement of Operations. Revenues and net income (loss) of the USCNHK”) and its wholly owned subsidiaries were nil and $614,871, respectively, for the year ended December 31, 2024, nil and $3,240,482, respectively, for the year ended December 31, 2023, and nil and $ (693,216), respectively, for the year ended December 31, 2022. Prior to the transfer, those subsidiaries did not conduct any substantial business nor have a major effect on the Group’s operation and financial results, therefore, it is not reported as a discontinued operation.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 – Discontinued Operations

On May 15, 2025, the Group sold its Electric Vehicle business (the “EV Business”), comprised of Hangzhou Jiyi Investment Management Co., Ltd., Hangzhou Wangbo Investment Management Co., Ltd., and its subsidiaries Shangchi Automobile Co., Ltd. and Shenzhen Yimao New Energy Sales Co., Ltd., to a third party (the “Buyer”). Based on the original agreement signed on May 6, 2025 and amended agreement signed on June 30, 2025, the final consideration was $85,799 (RMB600,000), which was collected by the Group on May 14, 2025 As a result, the gain from the disposal of EV Business amounted to $3,576,755 for the year ended December 31, 2025.

The disposal of the EV Business represents a strategic shift that has a significant effect on the Group’s operations and financial results, which triggers discontinued operations accounting in accordance with ASC 205-20-45; therefore, the Group determined that the disposal of the EV Business met the criteria to be classified as discontinued operations. As a result, the EV Business’s historical financial results are reflected in the Group’s consolidated financial statements as discontinued operations. The assets and liabilities related to the discontinued operations were retroactively classified as assets/liabilities of discontinued operations, while results of operations related to the discontinued operations, including comparatives, were retroactively reported as loss from discontinued operations for the years ended December 31, 2025, 2024 and 2023, respectively.

The aggregated financial results of the discontinued business are set forth below:

	Year ended December 31,			Year ended December 31,			Year ended December 31,
	2025			2024			2023
Revenues	$	55,192		$	65,778		$	2,687,305
Cost of revenues		2,313			11,207			2,230,100
Gross profit		52,879			54,571			457,205
Operating expenses		60,689			1,013,008			2,283,967
Loss from operations		(7,810	)		(958,437	)		(1,826,762	)
Other expenses, net		(53,616	)		(118,214	)		(57,849	)
Loss before income taxes		(61,426	)		(1,076,651	)		(1,884,611	)
Provision for income taxes		-			-			-
Loss from discontinued operations	$	(61,426	)	$	(1,076,651	)	$	(1,884,611	)

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 – Discontinued Operation (continued)

Assets and liabilities of the discontinued operations:

	December 31,		December 31,
	2025		2024
Assets
Current assets
Cash and cash equivalents	$	-	$	20,566
Restricted cash		-		104
Accounts receivable, net		-		342,141
Inventory, net		-		453,971
Advances to suppliers, net		-		30,392
Prepaid taxes		-		36,312
Prepaid expenses and other receivables, net		-		3,700
Total current assets of discontinued operations		-		887,186

Non-current assets
Property, plant and equipment, net		-		994,281
Intangible assets, net		-		731
Total non-current assets of discontinued operations		-		995,012
Total assets of discontinued operations	$	-	$	1,882,198

Liabilities
Current liabilities
Accounts payable	$	-	$	1,530,190
Due to related parties		-		37,793
Customer deposits		-		887,699
Accrued liabilities and other payables		-		2,564,581
Total current liabilities of discontinued operations		-		5,020,263
Total liabilities of discontinued operations	$	-	$	5,020,263

Note 6 – Accounts Receivable, net

Accounts receivable consisted of the following:

	December 31,			December 31,
	2025			2024
Accounts receivable	$	40,187,942		$	34,636,570
Accounts receivable transferred back by the Seller (Note 3)		7,484,283			-
Allowance for expected credit losses		(19,876,510	)		(2,028,979	)
Accounts receivable, net	$	27,795,715		$	32,607,591

The movement of allowance for expected credit losses are as follows:

	December 31,		December 31,
	2025		2024
Balance at beginning of year	$	2,028,979	$	2,361,778
Change of allowance for expected credit losses		17,327,139		(284,191	)
Foreign currency translation adjustment		520,392		(48,608	)
Balance at end of year	$	19,876,510	$	2,028,979

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7 – Financing Receivables, net

Starting in June 2022, the Group provided factoring financing service. The initial term of the financing receivables was 12 months with maturity in June 2023 and annual interest of 6.5%. The financing receivables were subsequently renewed in both June 2023 and June 2024 for an additional 12 months each with annual interest of 4.8%. The principal balance of the financing receivables as of December 31, 2024 had been outstanding since June 2022.On April 25, 2025, the entire financing receivables balance was fully settled as partial consideration paid in connection with the equity acquisition agreement entered into on April 18, 2025 (See Note 3). The Group recognized a gain of $2,335,304 (RMB16,785,000) from disposal of the financing receivables with fair value of $48,004,462 (RMB335,700,000) as compared to the carrying value of $45,604,238 (RMB318,915,000) prior to the disposal. The gain was included in other income (expense) for the years ended December 31, 2025.

Prior to the event described in Note 3, all the financing receivables were collateralized by pledged accounts receivable from large state-owned entities and well-established companies, and the net realizable value of the underlying collaterals was greater than the carrying amount of the financing receivables. Given all financing receivables were collateralized by pledged accounts receivable from large state-owned entities and well-established companies, the Group did not consider the renewals of the financing receivables terms to impact the credit risk determination and expected the outstanding financing receivables to be realizable within the 12-month term; accordingly, the Group classified all the financing receivables as current assets, and the Group did not consider it necessary to establish a nonaccrual policy.

The following table presents the activities related to the financing receivables for the years ended December 31, 2025 and 2024.

	Principal			Interest			Total
Balance as of December 31, 2024	$	40,072,336		$	5,301,903		$	45,374,239
Increase in accrued interest		-			626,061			626,061
Principal and interest derecognized		(40,695,652	)		(6,010,435	)		(46,706,087	)
Foreign currency translation adjustment		623,316			82,471			705,787
Balance as of December 31, 2025	$	-		$	-		$	-
Allowance for credit losses								-
Financing receivables, net							$	-

	Principal			Interest			Total
Balance as of December 31, 2023	$	41,197,763		$	3,585,248		$	44,783,011
Increase in accrued interest		-			1,840,722			1,840,722
Foreign currency translation adjustment		(1,125,427	)		(124,067	)		(1,249,494	)
Balance as of December 31, 2024	$	40,072,336		$	5,301,903		$	45,374,239
Allowance for credit losses								(2,268,712	)
Financing receivables, net							$	43,105,527

The movement of allowance for credit losses is as follows:

	December 31,			December 31,
	2025			2024
Balance at beginning of year	$	2,268,712		$	2,239,151
Change in allowance for credit losses		(2,304,001	)		92,036
Foreign currency translation adjustment		35,289			(62,475	)
Balance at end of year	$	-		$	2,268,712

For the years ended December 31, 2025, 2024 and 2023, the Group recognized net financing interest income of $626,061, $1,840,722 and $2,180,970, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 – Inventory, net

Inventory consisted of the following:

	December 31,		December 31,
	2025		2024
Raw materials	$	152,353	$	187,497
Finished products		-		3,751
Total inventory	$	152,353	$	191,248

For the years ended December 31, 2025, 2024 and 2023, no inventory markdown was recorded.

Note 9 – Advances to Suppliers, net

Advances to suppliers consisted of the following:

	December 31,		December 31,
	2025		2024
Advances to suppliers	$	90,000	$	3,695,682
Allowance for credit losses		-		-
Advances to suppliers, net	$	90,000	$	3,695,682

The movement of allowance for credit losses are as follows:

	December 31,		December 31,
	2025		2024
Balance at beginning of year	$	-	$	3,611
Change of allowance for credit losses		-		(3,563	)
Translation adjustments		-		(48	)
Balance at end of year	$	-	$	-

Note 10 – Property, Plant and Equipment, net

Property, plant and equipment stated at cost less accumulated depreciation consisted of the following:

	December 31,			December 31,
	2025			2024
Machinery and production equipment	$	266,534		$	280,100
Electronic equipment		3,864			3,702
Office equipment		5,411			5,184
Transportation equipment		63,000			63,000
Subtotal		338,809			351,986
Less: Accumulated depreciation		(236,017	)		(228,716	)
Property, plant and equipment, net	$	102,792		$	123,270

Depreciation expense was $18,384, $6,519 and $199,009 for the years ended December 31, 2025, 2024 and 2023, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11 – Intangible Assets, net

Intangible assets stated at cost less accumulated amortization consisted of the following:

	December 31,			December 31,
	2025			2024
Software	$	6,484		$	6,212
Patents		215,846			206,791
Subtotal		222,330			213,003
Less: Accumulated amortization		(51,545	)		(28,456	)
Intangible assets, net	$	170,785		$	184,547

Amortization expense for intangible assets totaled $21,253, $21,071 and $10,920 for the years ended December 31, 2025, 2024 and 2023, respectively.

Note 12 – Prepaid Expenses and Other Receivables, net

Prepaid expenses and other receivables consisted of the following:

	December 31,			December 31,
	2025			2024

Loan receivable – others (i)	$	2,268,285		$	1,377,787
Others		203,405			160,227
Total		2,471,690			1,538,014
Allowance for credit losses		(102,268	)		-
Prepaid expenses and other receivables, net	$	2,369,422		$	1,538,014

(i) As of December 31, 2025 and 2024, the balances represent working capital loan to a third party due on demand with 6.5% interest rate.

Note 13 – Long-term Investments

	Equity investment using the measurement alternative (i)			Total
Balance as of January 1, 2024	$	23,426,105		$	23,426,105
Additions		-			-
Foreign currency translation adjustment		(639,947	)		(639,947	)
Balance as of December 31, 2024		22,786,158			22,786,158
Additions		-			-
Share loss from equity investment		-			-
Impairment		(23,140,591	)		(23,140,591	)
Foreign currency translation adjustment		354,433			354,433
Balance as of December 31, 2025	$	-		$	-

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13 – Long-term Investments (continued)

(i) On January 10, 2018, the Group invested approximately $11,741,011 (RMB120,000,000) to acquire 18% equity interest in Libo Haokun Stone Co., Ltd. (“Libo Haokun”). Libo Haokun holds a government-issued permit and has the exclusive right to mine a 0.11 square-kilometer marble quarry in the central area of Guizhou province, China. Libo Haokun obtained the permit to mine the quarry from the local government in September 2016. The permit was renewed in July 2020 and is further renewable by July 2023. On October 16, 2023, the government approved to extend the right for 5 more years.

On November 29, 2019, the Group entered into an investment agreement (the “Investment Agreement”) with Jingning Zhonggang Mining Co., Ltd. (“Jingning Zhonggang”) through Lishui Tantech to acquire 18% of the equity interest in Fuquan Chengwang Mining Co., Ltd. (“Fuquan Chengwang”), a wholly-owned subsidiary of Jingning Zhonggang, at a price of $6,444,939 (RMB46,323,000). The consideration equals 18% of RMB257.35 million, the value of the mining right under a permit being renewed by Fuquan Chengwang according to an evaluation report. Fuquan Chengwang is a basalt mining company.

Pursuant to the Investment Agreement, Tantech is obligated to pay the consideration within 30 days after Fuquan Chengwang completes the recording process with the local industrial and commerce administration for transfer of the share ownership. Pursuant to the Investment Agreement, after the transfer of the 18% share ownership, if the value of Fuquan Chengwang is lower than RMB257.35 million according to the financial statements audited by an accounting firm approved by the Tantech, Jingning Zhonggang will be obligated to refund to Tantech the overpaid amount. The payment could be in the form of cash, shares, or other assets with the same value, as selected by Tantech.

After a series of transactions and reorganization, since December 31, 2019, the Group and Jingning Zhonggang have owned 18% and 82%, respectively, of Libo Haokun, through Jingning Meizhongkuang Industry Co., Ltd. (“Jingning Meizhongkuang”). Jingning Meizhongkuang owns 100% of Fuquan Chengwang. The Agreements enable Tantech to indirectly hold an 18% stake in Fuquan Chengwang through holding 18% in the equity interest of Jingning Meizhongkuang.

On April 3, 2020, Lishui Ansheng Energy Technology Co., a third party, signed an investment agreement with Jingning Meizhongkuang to invest in Fuquan Chengwang by paying RMB46.5 million to exchange 18% of the interest in Fuquan Chengwang. After the transaction, the Group’s indirect interest in Fuquan Chengwang was diluted from 18% to 14.76% through holding 18% of the equity interest in Jingning Meizhongkuang.

Due to the fact that the Group did not have significant influence over the equity investees, the investments were accounted for using the cost method.

For the year ended December 31, 2025, given the government has imposed prohibitions on mining activities and the local mining policy have been negatively impacted, the Group recorded a full impairment of $23,140,591(RMB166,323,000) on this investment for the year ended December 31, 2025 due to significant uncertainties involved in the future development of such mining property.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14 – Leases

The Group has several operating leases for factory facilities and offices. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The rental expense for the years ended December 31, 2025, 2024 and 2023 was $182,200, $136,063 and $258,193, respectively.

Supplemental balance sheet information related to operating leases was as follows:

	December 31,		December 31,
	2025		2024
Right-of-use assets, net	$	882,187	$	1,060,426

Operating lease liabilities - current		135,724		139,222
Operating lease liabilities - non-current		745,120		919,781
Total operating lease liabilities	$	880,844	$	1,059,003

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2025 and 2024:

	December 31,			December 31,
	2025			2024
Weighted average remaining lease term (years)		5.98			6.95
Weighted average discount rate		3.85	%		3.85	%

The following is a schedule of maturities of lease liabilities as of December 31, 2025:

Twelve months ending December 31,
2026	$	165,410
2027		162,517
2028		162,517
2029		162,517
2030		162,517
Thereafter		162,518
Total future minimum lease payments		977,996
Less: Imputed interest		97,152
Total	$	880,844

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15 – Loans Payable to Third Parties

	December 31,		December 31,
	2025		2024
Loan payable to third party (i)	$	-	$	1,027,734
Loans payable to third party (ii)		3,769,821		2,223,000
Total	$	3,769,821	$	3,250,734

(i)

On December 17, 2021, the Group borrowed $3.5 million from a third party. The loan was unsecured with an interest rate of 6% per annum, and had its term extended several times, ultimately to December 15, 2025. The remaining principal and interest balance was $1,027,734 as of December 31, 2024. If the Group fails to repay the debt, the Group shall pay the third party for the liquidated damages at the rate of thousandths of the amount in arrears per day, and also compensate the legal costs, execution fees, etc. incurred in realizing the creditor rights. On June 20, 2025, the Group fully settled the remaining principal and interest by transferring $1,062,249 accounts receivable to the third party.

(ii)

On August 1, 2024, the Company entered into a promissory note agreement with a creditor (“the Creditor”), pursuant to which the Company issued the Creditor an unsecured promissory note with original principal amount of $2,160,000 for $2,000,000 in gross proceeds. The promissory note bears interest at a rate of 7% per annum compounding daily with a term of twelve months. The promissory note includes an original issue discount of $140,000 along with $20,000 for creditor costs and other transaction expenses incurred in connection with the purchase and sale of the promissory note. The Group may prepay all or a portion of the promissory note at any time by paying 105% of the outstanding balance elected for pre-payment.

For the year ended December 31, 2025, the Company settled the amount of $1,792,000 by issuing 1,219,488 Class A common shares of the Company to the investor. The fair value of these shares was $2,248,151, based on the Company’s share price. As a result, the Group recognized a loss from extinguishment of debt in the amount of $456,151 as other expense for the year ended December 31, 2025.

As of December 31, 2025, the outstanding principal and interest balance was $671,103. The Company has fully repaid this promissory note by April 2026.

On October 14, 2025 the Company entered into a promissory note agreement with the Creditor, pursuant to which the Company issued the Creditor an unsecured promissory note with original principal amount $3,230,000 for $3,000,000 in gross proceeds. The promissory note bears interest at a rate of 7% per annum compounding daily with a term of twelve months. The promissory note includes an original issue discount of $140,000 along with $20,000 for creditor costs and other transaction expenses incurred in connection with the purchase and sale of the promissory note. The Group may prepay all or a portion of the promissory note at any time by paying 105% of the outstanding balance elected for pre-payment. As of December 31, 2025, the outstanding principal and interest balance was $3,098,718.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 – Convertible Note

On June 29, 2023, the Company entered into a securities purchase agreement with Streeterville Capital, LLC (“Streeterville”, the "Investor"), pursuant to which the Company issued the Investor an unsecured promissory note on June 29, 2023 in the original principal amount of $2,160,000 (the “June 2023 Note”), convertible into ordinary shares of the Company, for $2,000,000 in gross proceeds. The transaction contemplated by the Purchase Agreement closed on June 29, 2023. The Note bears interest at a rate of 7% per annum. Pursuant to the convertible note agreement, the conversion price is 80% the lower of: (i) the closing price on the trading day immediately preceding the date the redemption conversion price is measured; or (ii) the average closing price of the Class A common shares for the five trading days immediately preceding the date the redemption conversion price is measured, but not lower than $1.2 (the “Floor Price”). All outstanding principal and accrued interest on the June 2023 Note will become due and payable twelve months after the purchase price of the Note is delivered by Purchaser to the Company (the “Purchase Price Date”). The June 2023 Note includes an original issue discount of $140,000 along with $20,000 for Streeterville’s fees, costs and other transaction expenses incurred in connection with the purchase and sale of the note. The Company may prepay all or a portion of the Note at any time by paying 105% of the outstanding balance elected for pre-payment. In addition, the June 2023 Exchange Note provides that upon occurrence of an event of default, the interest rate shall accrue on the outstanding balance at the rate equal to the lesser of 15% per annum or the maximum rate permitted under applicable law.

On September 5, 2024, the Company entered into an exchange agreement (the “Exchange Agreement”) with Streeterville, pursuant to which the Company issued a promissory note (the “September 2024 Exchange Note”) in exchange for the cancellation of the June 2023 Note. The principal amount of the September 2024 Exchange Note was $1,525,213, consisting of the remaining outstanding balance of the original June 2023 Note of $1,225,213 and an exchange fee of $300,000. The September 2024 Exchange Note bears the same interest rate as the June 2023 Note and will have a term of twelve months with maturity date of September 4, 2025. Beginning on October 1, 2024, Streeterville has the right to redeem the September 2024 Exchange Note at any time, subject to a maximum monthly redemption amount of $300,000 and minimum monthly redemption amount of $150,000. If the Company has not paid by a minimum monthly redemption amount of $150,000. The difference between the minimum monthly redemption amount and the amount actually repaid in such month, or the outstanding balance will automatically increase by 0.5% as of such fifth day. The Streeterville shall have the right to increase the balance of the September 2024 Exchange Note by 10% for a major trigger event and 5% for a minor trigger event as defined in the Exchange Agreement, with an aggregate of 25% as the maximum increase in the outstanding balance.

For the June 2023 Note and the September 2024 Note (together as the “Notes”), the Company has elected to recognize the Notes at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Company engaged a third-party valuation firm to perform the valuation of the convertible note. The fair value of the convertible note was calculated using the Scenario-based Discounted Cash Flows with Monte Carlo Simulation Model (the "Monte Carlo Model”). The major assumptions used in the Monte Carlo Model are as follows:

	June 29, 2023			December 31, 2023			December 31, 2024
Risk-free interest rate		5.419	%		4.77	%		4.32	%
Expected life		1.0	year		0.5	year		0.7	year
Share price	$	107.2		$	47.6		$	8.4
Volatility		142	%		135	%		149	%

For the years ended December 31, 2024 and 2023, the Notes were partially converted into 222,483 and 8,479 Class A common shares of the Company, respectively.

Due to the significant drop in the Company’s share price, Streeterville and the Company reached a consensus, pursuant to which, the Company paid Streeterville compensation of $610,227 for the year ended December 31, 2024, which was expensed and considered to be an addition to the outstanding balance of the Notes.

The Exchange Agreement was determined to be an extinguishment of debt in accordance with ASC 470. As a result, the change in the fair value of the Notes immediately before and after the Exchange agreement in the amount of $298,213 was accounted for as a gain on debt extinguishment for the year ended December 31, 2024. The fair value of the Notes was $198,000 as of December 31, 2024.

For the years ended December 31, 2025, 2024 and 2023, the Company recognized a loss of change in fair value of the convertible note of $150,000, $504,006 and $165,704, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 17 – Related Party Balances and Transactions

The relationship of related parties is summarized as follows:

Name of Related Party		Relationship to the Group
Zhengyu Wang		CEO of EPakia Inc., the husband of Yefang Zhang, and a controlling shareholder of the Company
Yefang Zhang		Director, Chairwoman of the Board, and a controlling shareholder of the Company
Wangfeng Yan (i)		Formerly Chief Executive Officer
Zhejiang Nongmi Food Co., Ltd. (“Nongmi Food”)		Controlled by Yefang Zhang, but it ceased to be a related party in December 2024 after she sold the entity.
Zhejiang Nongmi Biotechnology Co., Ltd. (“Nongmi Biotechnology”)		Controlled by Yefang Zhang, but it ceased to be a related party in June 2025 after she sold the entity.
Zhejiang Nongmi Ecological Technology Co., Ltd. (“Nongmi Ecological”)		Controlled by Yefang Zhang

(i) On May 29, 2025, Mr. Wangfeng Yan tendered his resignation as the Chief Executive Officer of the Company due to personal reasons.

Due from a related party

The balances due from related party were as follows:

	December 31,		December 31,
	2025		2024
Mr. Zhengyu Wang	$	-	$	118,025
Total	$	-	$	118,025

As of December 31, 2024, the Group had advanced funds to Mr. Zhengyu Wang for expanding business, such funds have been collected as of December 31, 2025.

Due to related parties

The balances due to related parties were as follows:

	December 31,		December 31,
	2025		2024
Mr. Zhengyu Wang and his affiliates	$	3,791,711	$	-
Mr. Wangfeng Yan, and his affiliates		-		11,576
Total	$	3,791,711	$	11,576

As of December 31, 2025, Mr. Zhengyu Wang advanced working capital and paid some business expenses on behalf of the Group.

All balances due to related parties were unsecured, interest-free and due upon demand.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 17 – Related Party Balances and Transactions (continued)

Lease arrangement with related party

On July 13, 2021, Tantech Bamboo signed a lease agreement with Zhejiang Nongmi Food Co., Ltd. (“Nongmi Food”) to lease part of its production facilities of approximately 1,180 square meters to Nongmi Food for ten years with monthly rent of approximately $2,100 (RMB15,338). For the years ended December 31, 2025, 2024 and 2023, the Group recorded rent income of nil, nil and $64,231, respectively from Nongmi Food.

Note 18 – Stockholders’ Equity

Common shares

On May 26, 2023, the Company’s Board approved to change the authorized number of common shares from 2.5 million to 500 million.

On April 23, 2024, the Company’s Board approved to issue an unlimited number of common shares of no par value each.

On January 21, 2025, the Company’s Board approved a share consolidation of the Company’s common shares at the ratio of one-for-forty reverse split with the effective date of February 13, 2025. The Company paid cash to the holders of the fractional shares resulting from the share consolidation and cancelled an aggregate of 133 issued shares due to reverse split reconciliation.

On December 30, 2025, at the annual meeting of shareholders of the Company, shareholders of the Company approved: (a) the authorized shares of the Company be amended from an unlimited number of Shares of no par value each, to an unlimited number of Class A common shares of no par value each, with one vote per share, and an unlimited number of Class B common shares of no par value each, with fifty votes per share, by the reclassification of an unlimited number of common shares into an unlimited number of Class A common shares of no par value each, and the reclassification of an unlimited 1,142 Class A shares into Class B common shares with no par value each.

All share information included in the consolidated financial statements and notes thereto have been retroactively adjusted to reflect the reverse split.

As of December 31, 2025 and 2024, the Company had an aggregate of 6,213,730 and 1,132,658 Class A common shares issued and outstanding. As of December 31, 2025 and 2024, the Company had an aggregate of 1,142 and nil Class B common shares issued and outstanding.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 18 – Stockholders’ Equity (continued)

Private placements

On February 21, 2023, the Company entered into a securities purchase agreement with nine individual purchasers, pursuant to which the Company agreed to sell an aggregate of 25,000 Class A common shares at a price of $ 112 per share, the net proceeds of $2,779,325 after deducting related expenses. The transaction was closed on March 22, 2023.

On June 26, 2023, the Company entered into a securities purchase agreement with six individual purchasers, pursuant to which the Company agreed to sell an aggregate of 31,000 Class A common shares at a price of $100 per share, the net proceeds of $3,055,000 after deducting related expenses. The transaction was closed on June 30, 2023.

On April 22, 2024, the Company entered into a private placement (the “April 2024 Private Placement”) and issued an aggregate of 105,000 units and pre-funded units (collectively, the “Units”) at a purchase price of $20 per unit (less $0.004 per pre-funded unit). Each Unit consists of (i) one Common Share of the Company (or one pre-funded warrant to purchase one Common Share (the “Pre-Funded Warrant”)), (ii) two Series A warrants each to purchase one Class A common shares (the “Series A Warrants”) and (iii) one Series B warrant to purchase such amount of Class A common shares as determined on the Reset Date (defined below) and in accordance with the terms therein (the “Series B Warrant” and together with the Series A Warrant, the “April 2024 Warrants”). The aggregate gross proceeds amounted to $2,100,000, for total net proceeds of $1,722,500 after deducing the costs related to the offering.

The Pre-Funded Warrant is immediately exercisable at an exercise price of $0.004 per common share and will not expire until exercised in full. The Series A Warrants will be exercisable upon issuance, will have an exercise price of $30 per Common Share (subject to certain anti-dilution and share combination event protections) and will have a term of 5.5 years from the date of issuance. The Series B Warrants, exercisable following the Reset Date, will have an exercise price of $0.004 per Common Share and will have a term of 5.5 years from the date of issuance. The exercise price and the number of Class A common shares issuable under the Series A Warrants are subject to adjustment. The number of Class A common shares issuable under the Series B Warrant will be determined following the earliest to occur of: (i) the date on which a resale registration statement covering the resale of all Registrable Securities (as defined in the Series B Warrant) has been declared effective for 11 consecutive trading days, (ii) the date on which the Purchasers may sell the Registrable Securities pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Act”) for a period of 11 consecutive trading days, and (iii) twelve months and 30 days following the issuance date of the Series B Warrants (the “Reset Date”) to be determined pursuant to the lowest daily average trading price of the Class A common shares during a period of 10 trading days, subject to a pricing floor of $5.48 per Common Share.

On October 23, 2025, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company agreed to sell an aggregate of 3,614,464 units at a purchase price of $1.66 per unit with gross proceeds of 6.0 million (the “October 2025 Private Placement”). Each unit consists of one Class A common share, three Series C warrants each to purchase one common share, and three Series D warrants each to purchase one Class A common share. Total net proceeds of $5,480,000 after deducing the costs related to the offering.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 18 – Stockholders’ Equity (continued)

Warrants

(i)	November 2020 Warrants

On November 24, 2020, the Company completed an offering and issued registered warrants to investors to purchase up to 288 Class A common shares and unregistered warrants to purchase up to 344 Class A common shares. Such registered and unregistered warrants are immediately exercisable, expire five years from the date of issuance and have an exercise price of $1.404 per share. The exercise price of such warrants was reduced from $17,376 per share to $480 per share by virtue of the Company’s entry into a securities purchase agreement on March 18, 2022, further reduced to $6.448 per share on June 6, 2025, and reduced to $1.404 per share again on October 9, 2025. Management determined that November 2020 warrants upon issuance meet the requirements for equity classification under ASC 815-40 because they were indexed to its own stock. The warrants were recorded at their fair value on the date of issuance as a component of shareholders’ equity. The change in fair value of warrants immediately before and after each time the Company modifies the warrant exercise price is recorded as warrants modification expense. For the year ended December 31, 2025, the investors exercised 158 warrants with proceeds of $101 and received 86 Class A shares. All remaining warrants expired on November 23, 2025.

(ii)	Warrants issued in connection with April 2024 Private Placement

In connection with the April 2024 Private Placement, the Company issued 11,250 pre-funded warrants, in which 8,500 prefunded warrants have been exercised for the year ended December 31, 2024. In addition, the Company also issued the April 2024 Warrants, consisted of 210,000 Series A Warrants with an exercise price of $30 per common share and 105,000 Series B warrants with an exercise price of $ 0.004 per common share, all warrants have a term of 5.5 years from the date of issuance. On August 9, 2024, according to the related term specified in the agreement, the Company reset the exercise price and number of Series A warrants to $6.448 and 977,047, respectively. On August 9, 2024, the Company also reset the exercise price of Series B warrants to $6.448 and the maximum eligibility number is being determined based on the reset price, respectively. As of December 31, 2024, the excisable prefunded warrants, Series A warrants and Series B warrants outstanding was 2,750, 468,477 and nil, respectively.

On January 7, 2025, the Company entered into inducement agreements (each, an “Inducement Agreement”) with certain holders (the “Holders”) of the Company’s Series A warrants originally issued pursuant to a securities purchase agreement dated April 22, 2024 (such Series A warrants, the “Existing Warrants”). Pursuant to the Inducement Agreements, the Company agreed, as consideration for exercising all or part of the Existing Warrants held by any such Holder, to issue to such Holder one or more new Series A common share purchase warrants, exercisable for up to a number of Class A common shares equal to 150% of the number of Existing Warrants Shares issued upon exercise of the Existing Warrants pursuant to the terms of the Inducement Agreements (such warrants, the “New Warrants” and such Class A common shares issuable upon exercise thereof, the “New Warrant Shares”). Under the terms of the Inducement Agreements, the Holders may exercise the Existing Warrants subject to the beneficial ownership limitation of 4.99% (or 9.99% upon election by a Holder prior to the issuance of any New Warrants on or before January 21, 2025). If the Holder exercises all of its Existing Warrants pursuant to the Inducement Agreement, the Company will receive aggregate gross proceeds of up to approximately $2.6 million. The New Warrants are exercisable immediately following issuance and have an exercise price of $8. The New Warrants will expire 5.5 years from the date of issuance. An aggregate of 65,625 warrants was issued for these inducement agreements. The issuance of New Warrants was considered as a deemed distribution to investors with the fair value was $401,000, based on third party's valuation, and recorded as a reduction of retained earnings. Management determined that the New warrants were derivatives that were accounted for as warrant liabilities measured at fair value on a recurring basis.

During January 1, 2025 to March 10, 2025, the investors exercised 56,250 Series A warrants. On March 10, 2025, according to the related term specified in the agreement, the Company reset the exercise price and number of Series A warrants to $2.99 and 888,977, respectively, and reset the exercise price and number of New Warrants to $6.448 and 81,422, respectively. On December 23, 2025, the Company further reset the exercise price and number of Series A warrants to $0.8124 and 3,271,841, respectively. On April 3, 2026, the Company again reset the exercise price and number of Series A warrants to $0.2962 and 8,973,816, respectively.

As of December 31, 2025, there were 2,750 excisable prefunded warrants, 3,271,841 Series A warrants, no Series B warrants, and 81,422 New Warrants.

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 18 – Stockholders’ Equity (continued)

Management determined that the 2024 April Warrants and the New Warrants were derivatives that were accounted for as warrant liabilities measured at fair value on a recurring basis. The Group engaged a third-party valuation firm to perform the valuation of warrant liabilities using the Monte Carlo Model with significant unobservable inputs to measure the fair value of the warrant liability (Level 3). The major assumptions used in the Monte Carlo Model are as follows:

	April 22, 2024			December 31, 2024			December 31, 2025
Risk-free interest rate		5.39	%		4.8	%	3.55-3.68		%
Expected life	5.5 year			4.8 year			3.8-4.6year
Share price	$	25.6		$	8.4		$	1.0
Volatility		132	%		157	%	157-145		%

As of December 31, 2025 and 2024, the fair value of warrant liabilities related to the April 2024 warrants amounted to $1,653,000 and $2,000,000, respectively.

(iii)

Warrants issued in connection with October 2025 Private Placement

In connection with the October 2025 Private Placement, the Company issued 10,843,392 Series C warrants each to purchase one common share, and 10,843,392 Series D warrants each to purchase one common share. The warrants are exercisable immediately upon issuance and term of three years from the date of issuance. The Series C warrants have an exercise price of $1.66 per common share. The Series D warrants have an exercise price of $1.83 per common share. The exercise price and the number of warrant shares are subject to adjustment upon the occurrence of certain events, including share combination or similar recapitalization transactions. Management determined that these warrants meet the requirements for equity classification under ASC 815-40 because they are indexed to its own stock. The warrants were recorded at their fair value on the date of issuance as a component of shareholders’ equity.

The following table summarized the Company’s warrants activity:

	Number of warrants			Weighted average exercise price per share $ per share		Weighted average life Years

Balance of warrants outstanding as of December 31, 2022		669			1,439.20		2.79
Granted		-			-		-
Forfeited		(38	)		-		-
Balance of warrants outstanding as of December 31, 2023		631			480.00		1.90
Granted		1,192,727
Exercised		(721,500	)
Balance of warrants outstanding as of December 31, 2024		471,858			7.04		4.83
Granted		21,752,409			-		-
Exercised		(56,408	)		-		-
Forfeited		(474	)		-		-
Effect of reverse split and adjustments		2,875,412			-		-
Balance of warrants outstanding as of December 31, 2025		25,042,797			1.92		2.95

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 18 – Stockholders’ Equity (continued)

Conversion of convertible note

On June 29, 2023, the Company issued a convertible note in the principal amount of $2,160,000 to an investor. The Note was partially converted into 8,479 Class A shares with conversion prices ranging from $ 48.0-$73.92 during the year ended December 31, 2023. The fair value of the convertible note immediately prior to conversion was assessed at $438,000. The Company issued an aggregate of 222,483 Class A shares to such investor with conversion prices ranging from $5.6-$48.0 during the year ended December 31, 2024, the fair value of the convertible note immediately prior to conversion was assessed at $2,060,000. The Company issued an aggregate of 192,059 Class A shares to such investor with conversion prices ranging from $1.2-$1.8 during the year ended December 31, 2025.

Conversion of promissory note

During the year ended December 31, 2025, the Company issued 1,219,488 Class A common shares to a third party to settle a promissory note with a carrying value of $1,792,000. The fair value of these shares was $2,248,151, based on the Company’s share price. As a result, the Group recognized a loss from extinguishment of debt in the amount of $456,151 as other expense for the year ended December 31, 2025.

Note 19 – Non-controlling Interests

A reconciliation of non-controlling interest as of December 31, 2024 and 2023 is as follows:

	December 31,			December 31,
	2025			2024
Beginning balance	$	(3,031,675	)	$	(2,712,752	)
Proportionate shares of net loss(income)		(18,416	)		(323,515	)
Disposal discontinued operations		3,050,603			-
Foreign currency translation adjustment		(512	)		4,592
Total	$	-		$	(3,031,675	)

As of December 31, 2024, the non-controlling interests balance represents the non-controlling shareholder’s 30% equity interest in Shangchi Automobile Co., Ltd. and its subsidiary Shenzhen Yimao New Energy Sales Co., Ltd, which were disposed for the year ended December 31, 2025 (Note 4).

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 20 – Taxes

Prepaid taxes

Prepaid taxes as of December 31, 2025 and 2024 consisted of the following:

	December 31,		December 31,
	2025		2024
Prepaid value-added tax	$	485,901	$	464,963
Others		3,401		3,494
Total	$	489,302	$	468,457

Taxes payable

Taxes payable as of December 31, 2025 and 2024 consisted of the following:

	December 31,		December 31,
	2025		2024
Corporation income tax payable	$	1,507,592	$	1,428,586
Other tax payable		62,340		133,055
Total	$	1,569,932	$	1,561,641

Corporation income tax (“CIT”)

Tantech BVI was incorporated in the BVI and is not subject to income taxes under the current laws of BVI. EPakia was incorporated in Delaware, and Tanhome Holding and Tanhome were incorporated in California, United States and are subject to a combined U.S. federal and state statutory income tax rate at 28%. EPakia Canada was incorporated in Alberta, Canada and is subject to a combined federal and provincial statutory income tax rate at 23%. USCNHK Holdings, China East and Euroasia are holding companies registered in Hong Kong and have no operating profit for tax liabilities.

The Group’s subsidiaries in the PRC are subject to the statutory rate of 25%, in accordance with the Enterprise Income Tax law (the “EIT Law”), which has been effective since January 1, 2008.

The following table reconciles PRC statutory rates to the Group’s effective tax rates for the years ended December 31, 2025, 2024 and 2023:

	Years ended December 31,
	2025			2024			2023
Statutory PRC income tax rate		25	%		25	%		25	%
Different tax rate impact		(2	)%		341	%		3	%
Permanent difference and others		7	%		53	%		(4	)%
Changes of deferred tax assets valuation allowances		(22	)%		79	%		2	%
Total		8	%		498	%		26	%

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 20 – Taxes (continued)

Income tax expense consisted of the following:

	Years ended December 31,
	2025			2024		2023
Current	$	1,992,706		$	3,111,047	$	2,364,489
Deferred		(4,516,927	)		-		-
Total	$	(2,524,221	)	$	3,111,047	$	2,364,489

Significant components of deferred tax assets are as follows:

	December 31,			December 31,
	2025			2024
Deferred tax assets:
Allowance for expected credit losses and other markdown and impairments	$	11,025,156		$	1,145,662
Valuation allowance		(6,382,663	)		(1,145,662	)
Total	$	4,642,493		$	-

At December 31, 2025 and 2024, the Group has provided valuation allowance for deferred tax assets that the Group estimated it could not realize due to expected future operating loss in certain entities. As of December 31, 2025 and 2024, the valuation allowance was $6,382,663 and $1,145,662, respectively. The Group’s management reviews this valuation allowance periodically and makes adjustments as necessary.

Note 21 – Earnings Per Share

The Group computes earnings per Class A and Class B common shares in accordance with ASC Topic 260, Earnings Per Share (“ASC 260”), using the two-class method. The liquidation and dividend rights of the holders of the Company’s Class A and Class B common shares are identical, except with respect to voting rights. As a result, and in accordance with ASC 260, the undistributed earnings for each year are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the year had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. Further, as the conversion of Class B common shares is assumed in the computation of the diluted earnings per Class A common share, the undistributed earnings are equal to net income for that computation.

As of December 31, 2025 and 2024, the total number of registered and unregistered warrants outstanding was 25,042,797 and 471,858, respectively. For the year ended December 31,2025 and 2024, no warrants were included in the diluted loss per share as they would be anti-dilutive. For the year ended December 31, 2023, no warrants were included in diluted income per share since the exercise prices for the warrants were higher than the average market price.

The following table presents a reconciliation of basic and diluted earnings (loss) per share:

	Years Ended December 31,
	2025			2024			2023
Numerator:
Net loss	$	(31,041,659	)	$	(3,565,285	)	$	5,017,546
Less: Net loss attributable to non-controlling interests		(18,416	)		(323,515	)		(565,301	)
Less: Deemed dividend to warrants holders		401,000			-			-
	$	(31,424,243	)	$	(3,241,770	)	$	5,582,847
Denominator
Weighted average shares Outstanding – Basic		2,303,740			423,174			69,186
Dilutive securities – Unexercised warrants		-			-			-
Weighted average shares outstanding – Diluted		2,303,740			423,174			69,186

(Loss) earnings per share – Basic	$	(13.64	)	$	(7.66	)	$	80.69
(Loss) earnings per share – Diluted	$	(13.64	)	$	(7.66	)	$	80.69

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TANTECH HOLDINGS LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 22 – Segment Information

The Group uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments. On May 15, 2025, the Group closed the sale of its Electric Vehicle business (the “EV Business”). As a result, the Group has determined that it has one operating segment as defined by ASC 280.

Most of the Group’s long-lived assets are in the PRC; thus, no geographic information of long-lived assets is presented.

Geographic information about the revenues, which are classified based on customers, is set out as follows:

	Years ended December 31,
	2025		2024		2023
Revenues from China	$	35,789,798	$	42,233,433	$	43,047,749
Revenues directly from foreign countries		2,569,365		706,703		1,583,367
Total revenue	$	38,359,163	$	42,940,136	$	44,631,115

Note 23 – Subsequent Events

The Company completed a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell 7,166,671 common units, each consisting of (i) one common share, (ii) one Series E common warrant to purchase three Class A common shares at an exercise price of $0.30 per share, and (iii) one Series F common warrant to purchase three Class A common shares at an exercise price of $0.35 per share. The offering price per common unit was $0.30 with proceeds of $2.15 million.

The Group evaluated all events and transactions that occurred after December 31, 2025 up through the date the Group issued these unaudited condensed consolidated financial statements. Other than the events disclosed above, no other subsequent events have occurred that would require recognition or disclosure in the Group’s unaudited condensed consolidated financial statements.

F-39

EX-2.2 2 tanh_ex22.htm DESCRIPTION OF SECURITIES REGISTERED tanh_ex22.htm

EXHIBIT 2.2

Description of Securities

Registered under Section 12 of the Securities Exchange Act of 1934

As of December 31, 2025, Tantech Holdings Ltd (the “Company,” “we,” “us,” and “our”) had one class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, as follows:

Title of each class		Symbol		Name of each exchange on which registered
Class A Common Shares, no par value per share		TANH		Nasdaq Capital Market

Common Shares

On December 30, 2025, at the annual meeting of shareholders, shareholders of the Company approved, among other matters, the amendment and restatement of the Memorandum and Articles of Association of the Company to reflect the reclassification and redesignation of the Company’s common shares into Class A common shares and Class B common shares. Pursuant to the Amended and Restated Memorandum and Articles of Association currently in effect, the Company is authorized to issue an unlimited number of Class A shares of no par value each, with one vote per share (the “Class A Common Shares”), and an unlimited number of Class B shares of no par value each, with fifty votes per share (the “Class B Common Shares,” and together with Class A Common Shares, the “Shares”). As of December 31, 2025, a total of 6,214,872 Class A Common Shares were issued and outstanding (giving effect to the share reclassification effected on February 2, 2026) and no Class B Common Shares outstanding. Our Class A Common Shares are registered for trading on the NASDAQ Capital Market under the trading symbol “TANH”.

Capitalized terms used but not defined herein shall have the meanings given to them in the annual report on Form 20-F.

This Exhibit sets forth a description of our Class A Common Shares and Class B Common Shares and certain provisions of our memorandum and articles of association, as amended, which are summaries and are qualified in their entirety by reference to the full text of our Amended and Restated Memorandum and Articles of Association filed as Exhibit 1.3 herewith (referred to hereafter as our “Memorandum and Articles”).

Dividend Distributions

The holders of our Common Shares are entitled to such dividends as may be declared by our board of directors subject to the BVI Business Companies Act.

Voting rights

Any action required or permitted to be taken by the shareholders must be effected at a duly called annual or special meeting of the shareholders entitled to vote on such action and may be effected by a resolution in writing. At each shareholder’s meeting, each shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) will be entitled to one vote for each Class A Common Share which such shareholder holds and be entitled to fifty votes for each Class B Common Share which such shareholder holds on all matters subject to vote at each shareholders’ meeting of the Company.

Conversion

Class A Common Shares are not convertible into Class B Common Shares under any circumstances. Each Class B Common Share is convertible into one (1) Class A Common Share at any time by the holder thereof. The right to convert shall be exercisable by the holder of the Class B Common Shares delivering a written notice to the Company that such holder elects to convert a specified number of Class B Common Shares into Class A Common Shares.

The number of Class B Common Shares held by a holder thereof will be automatically and immediately converted into an equal and corresponding number of Class A Common Shares upon any direct or indirect sale, transfer, assignment or disposition of such number of Class B Common Shares by the holder thereof or an Affiliate of such holder or any direct or indirect transfer or assignment of the voting power attached to such number of Class B Common Shares through voting proxy or otherwise to any person or entity that is not an affiliate of such holder. For the avoidance of doubt, the creation of any pledge, charge, encumbrance or other third party right of whatever description on any of Class B Common Shares to secure contractual or legal obligations will not be deemed as a sale, transfer, assignment or disposition unless and until any such pledge, charge, encumbrance or other third-party right is enforced and results in the third party holding directly or indirectly beneficial ownership or voting power through voting proxy or otherwise to the related Class B Common Shares, in which case all the related Class B Common Shares shall be automatically converted into the same number of Class A Common Shares.

Election of directors

Delaware law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. The laws of the British Virgin Islands, however, do not specifically prohibit or restrict the creation of cumulative voting rights for the election of our directors. Cumulative voting is not a concept that is accepted as a common practice in the British Virgin Islands, and we have made no provisions in our memorandum and articles of association to allow cumulative voting for elections of directors.

Meetings

We must provide written notice of all meetings of shareholders, stating the time, place and, in the case of a special meeting of shareholders, the purpose or purposes thereof, at least 7 days before the date of the proposed meeting to those persons whose names appear as shareholders in the register of members on the date of the notice and are entitled to vote at the meeting. Our board of directors shall call a special meeting upon the written request of shareholders holding at least 30% of our outstanding voting shares. In addition, our board of directors may call a special meeting of shareholders on its own motion. A meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90 percent of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute waiver in relation to all the shares which that shareholder holds.

The management of us is entrusted to our board of directors, who will make corporate decisions by board resolution. Our directors are free to meet at such times and in such manner and places within or outside the BVI as the directors determine to be necessary or desirable. A 3 days’ notice of a meeting of directors must be given. At any meeting of directors, a quorum will be present if half of the total number of directors is present, unless there are only 2 directors in which case the quorum is 2. If a quorum is not present, the meeting will be dissolved. If a quorum is present, votes of half of present directors are required to pass a resolution of directors.

A meeting of shareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than one-third (1/3) of the votes of the shares entitled to vote on resolutions of shareholders to be considered at the meeting. A quorum may comprise a single shareholder or proxy and then such person may pass a resolution of shareholders and a certificate signed by such person accompanied where such person be a proxy by a copy of the proxy instrument shall constitute a valid resolution of shareholder. If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved; in any other case it shall stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as the directors may determine, and if at the adjourned meeting there are present within half an hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the shares or each class or series of shares entitle to vote on the matter to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved. No business may be transacted at any general meeting unless a quorum is present at the commencement of business. If present, the chair of our board of directors shall be the chair presiding at any meeting of the shareholders.

A corporation that is a shareholder shall be deemed for the purpose of our memorandum and articles of association to be present in person if represented by its duly authorized representative. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder.

Protection of minority shareholders

We would normally expect British Virgin Islands courts to follow English case law precedents, which permit a minority shareholder to commence a representative action, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority by parties in control of us, (3) the act complained of constitutes an infringement of individual rights of shareholders, such as the right to vote and pre-emptive rights and (4) an irregularity in the passing of a resolution which requires a special or extraordinary majority of the shareholders.

Pre-emptive rights

There are no pre-emptive rights applicable to the issue by us of new shares under either British Virgin Islands law or our memorandum and articles of association, as amended.

Transfer of Common Shares

Subject to the restrictions in our memorandum and articles of association and applicable securities laws, any of our shareholders may transfer all or any of his or her Class A Common Shares by written instrument of transfer signed by the transferor and containing the name and address of the transferee. Our board of directors may resolve by resolution to refuse or delay the registration of the transfer of any Class A Common Share. If our board of directors resolves to refuse or delay any transfer, it shall specify the reasons for such refusal in the resolution. Our directors may not resolve or refuse or delay the transfer of a Class A Common Share unless: (a) the person transferring the shares has failed to pay any amount due in respect of any of those shares; or (b) such refusal or delay is deemed necessary or advisable in our view or that of our legal counsel in order to avoid violation of, or in order to ensure compliance with, any applicable, corporate, securities and other laws and regulations.

Liquidation

If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay all amounts paid to us on account of the issue of shares immediately prior to the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the amount paid up immediately prior to the winding up on the shares held by them, respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the amounts paid to us on account of the issue of shares, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the amounts paid up immediately prior to the winding up on the shares held by them, respectively. If we are wound up, the liquidator appointed by us may, in accordance with the BVI Business Companies Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.

Calls on Common Shares and forfeiture of Common Shares

Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Common Shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The Common Shares that have been called upon and remain unpaid are subject to forfeiture.

Redemption of Common Shares

Subject to the provisions of the BVI Business Companies Act, we may issue shares on terms that are subject to redemption, at our option or at the option of the holders, on such terms and in such manner as may be determined by our memorandum and articles of association and subject to any applicable requirements imposed from time to time by, the BVI Business Companies Act, the SEC, The NASDAQ Capital Market, or by any recognized stock exchange on which our securities are listed.

Modifications of rights

All or any of the special rights attached to any class of shares may, subject to the provisions of the BVI Business Companies Act, be amended only pursuant to a resolution passed at a meeting by a majority of the votes cast by those entitled to vote at a meeting of the holders of the shares of that class.

Changes in the number of shares we are authorized to issue and those in issue

We may from time to time by resolution of our board of directors:

●	amend our memorandum of association to increase or decrease the maximum number of shares we are authorized to issue;

●	subject to our memorandum, divide our authorized and issued shares into a larger number of shares; and

●	subject to our memorandum, combine our authorized and issued shares into a smaller number of shares.

Untraceable shareholders

We are entitled to sell any shares of a shareholder who is untraceable, provided that:

●	all checks or warrants in respect of dividends of these shares, not being less than three in number, for any sums payable in cash to the holder of such shares have remained uncashed for a period of twelve years prior to the publication of the notice and during the three months referred to in the third bullet point below;

●	we have not during that time received any indication of the whereabouts or existence of the shareholder or person entitled to these shares by death, bankruptcy or operation of law; and

●	we have caused a notice to be published in newspapers in the manner stipulated by our memorandum and articles of association, giving notice of our intention to sell these shares, and a period of three months has elapsed since such notice.

●	The net proceeds of any such sale shall belong to us, and when we receive these net proceeds we shall become indebted to the former shareholder for an amount equal to the net proceeds.

Inspection of books and records

Under British Virgin Islands Law, holders of our Common Shares are entitled, upon giving written notice to us, to inspect (i) our memorandum and articles of association, (ii) the register of members, (iii) the register of directors and (iv) minutes of meetings and resolutions of members, and to make copies and take extracts from the documents and records. However, our directors can refuse access if they are satisfied that to allow such access would be contrary to our interests. See “Where You Can Find Additional Information.”

Rights of non-resident or foreign shareholders

There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.

Issuance of additional Common Shares

Our memorandum and articles of association authorizes our board of directors to issue additional Common Shares from authorized but unissued shares, to the extent available, from time to time as our board of directors shall determine.

Differences in Corporate Law

The BVI Business Companies Act and the laws of the British Virgin Islands affecting British Virgin Islands companies like us and our shareholders differ from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the laws of the British Virgin Islands applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

Mergers and similar arrangements

Under the laws of the British Virgin Islands, two or more companies may merge or consolidate in accordance with Section 170 of the BVI Business Companies Act. A merger means the merging of two or more constituent companies into one of the constituent companies and a consolidation means the uniting of two or more constituent companies into a new company. In order to merge or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation, which must be authorized by a resolution of shareholders.

While a director may vote on the plan of merger or consolidation even if he has a financial interest in the plan, the interested director must disclose the interest to all other directors of the company promptly upon becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the company.

A transaction entered into by our company in respect of which a director is interested (including a merger or consolidation) is voidable by us unless the director’s interest was (a) disclosed to the board prior to the transaction or (b) the transaction is (i) between the director and the company and (ii) the transaction is in the ordinary course of the company’s business and on usual terms and conditions.

Notwithstanding the above, a transaction entered into by the company is not voidable if the material facts of the interest are known to the shareholders and they approve or ratify it or the company received fair value for the transaction.

Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation contains any provision which, if proposed as an amendment to the memorandum or articles of association, would entitle them to vote as a class or series on the proposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote at the meeting to approve the plan of merger or consolidation.

The shareholders of the constituent companies are not required to receive shares of the surviving or consolidated company but may receive debt obligations or other securities of the surviving or consolidated company, other assets, or a combination thereof. Further, some or all of the shares of a class or series may be converted into a kind of asset while the other shares of the same class or series may receive a different kind of asset. As such, not all the shares of a class or series must receive the same kind of consideration.

After the plan of merger or consolidation has been approved by the directors and authorized by a resolution of the shareholders, articles of merger or consolidation are executed by each company and filed with the Registrar of Corporate Affairs in the British Virgin Islands.

A shareholder may dissent from a mandatory redemption of his shares, an arrangement (if permitted by the court), a merger (unless the shareholder was a shareholder of the surviving company prior to the merger and continues to hold the same or similar shares after the merger) or a consolidation. A shareholder properly exercising his dissent rights is entitled to a cash payment equal to the fair value of his shares.

A shareholder dissenting from a merger or consolidation must object in writing to the merger or consolidation before the vote by the shareholders on the merger or consolidation, unless notice of the meeting was not given to the shareholder. If the merger or consolidation is approved by the shareholders, the company must give notice of this fact to each shareholder within 20 days who gave written objection. These shareholders then have 20 days to give to the company their written election in the form specified by the BVI Business Companies Act to dissent from the merger or consolidation, provided that in the case of a merger, the 20 days starts when the plan of merger is delivered to the shareholder.

Upon giving notice of his election to dissent, a shareholder ceases to have any shareholder rights except the right to be paid the fair value of his shares. As such, the merger or consolidation may proceed in the ordinary course notwithstanding his dissent.

Within seven days of the later of the delivery of the notice of election to dissent and the effective date of the merger or consolidation, the company must make a written offer to each dissenting shareholder to purchase his shares at a specified price per share that the company determines to be the fair value of the shares. The company and the shareholder then have 30 days to agree upon the price. If the company and a shareholder fail to agree on the price within the 30 days, then the company and the shareholder shall, within 20 days immediately following the expiration of the 30-day period, each designate an appraiser and these two appraisers shall designate a third appraiser. These three appraisers shall fix the fair value of the shares as of the close of business on the day prior to the shareholders’ approval of the transaction without taking into account any change in value as a result of the transaction.

Shareholders’ suits

There are both statutory and common law remedies available to our shareholders as a matter of British Virgin Islands law. These are summarized below:

Prejudiced members

A shareholder who considers that the affairs of the company have been, are being, or are likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, likely to be oppressive, unfairly discriminatory or unfairly prejudicial to him in that capacity, can apply to the court under Section 184I of the BVI Business Companies Act, inter alia, for an order that his shares be acquired, that he be provided compensation, that the Court regulate the future conduct of the company, or that any decision of the company which contravenes the BVI Business Companies Act or our memorandum and articles of association be set aside.

Derivative actions

Section 184C of the BVI Business Companies Act provides that a shareholder of a company may, with the leave of the Court, bring an action in the name of the company to redress any wrong done to it.

Just and equitable winding up

In addition to the statutory remedies outlined above, shareholders can also petition for the winding up of a company on the grounds that it is just and equitable for the court to so order. Save in exceptional circumstances, this remedy is only available where the company has been operated as a quasi partnership and trust and confidence between the partners has broken down.

Indemnification of directors and executive officers and limitation of liability

British Virgin Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any provision providing indemnification may be held by the British Virgin Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime.

Under our memorandum and articles of association, we indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings for any person who:

·	is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was our director; or

·	is or was, at our request, serving as a director or officer of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise.

These indemnities only apply if the person acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Anti-takeover provisions in our memorandum and articles of association

Some provisions of our memorandum and articles of association may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that provide for a staggered board of directors and prevent shareholders from taking an action by written consent in lieu of a meeting. However, under British Virgin Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association, as amended and restated from time to time, as they believe in good faith to be in the best interests of our company.

Directors’ fiduciary duties

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a transaction that is material to the company. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation.

Under British Virgin Islands law, our directors owe the company certain statutory and fiduciary duties including, among others, a duty to act honestly, in good faith, for a proper purpose and with a view to what the directors believe to be in the best interests of the company. Our directors are also required, when exercising powers or performing duties as a director, to exercise the care, diligence and skill that a reasonable director would exercise in comparable circumstances, taking into account without limitation, the nature of the company, the nature of the decision and the position of the director and the nature of the responsibilities undertaken. In the exercise of their powers, our directors must ensure neither they nor the company acts in a manner which contravenes the BVI Business Companies Act or our memorandum and articles of association, as amended and re-stated from time to time. A shareholder has the right to seek damages for breaches of duties owed to us by our directors.

Shareholder action by written consent

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. British Virgin Islands law provides that shareholders may approve corporate matters by way of a written resolution without a meeting signed by or on behalf of shareholders sufficient to constitute the requisite majority of shareholders who would have been entitled to vote on such matter at a general meeting; provided that if the consent is less than unanimous, notice must be given to all non-consenting shareholders. Our memorandum and articles of association permit shareholders to act by written consent.

Shareholder proposals

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum and articles of association allow our shareholders holding not less than 30% of the votes of the outstanding voting shares to requisition a shareholders’ meeting. We are not obliged by law to call shareholders’ annual general meetings, but our memorandum and articles of association do permit the directors to call such a meeting. The location of any shareholders’ meeting can be determined by the board of directors and can be held anywhere in the world.

Cumulative voting

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. As permitted under British Virgin Islands law, our memorandum and articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

Removal of directors

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our memorandum and articles of association, directors can be removed from office, with cause, by a resolution of shareholders or by a resolution of directors passed at a meeting of directors called for the purpose of removing the director or for purposes including the removal of the director.

Transactions with interested shareholders

The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15% or more of the target’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors. British Virgin Islands law has no comparable statute.

Dissolution; Winding Up

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under the BVI Business Companies Act and our memorandum and articles of association, we may appoint a voluntary liquidator by a resolution of the shareholders or by resolution of directors.

Variation of rights of shares

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our memorandum and articles of association, if at any time our shares are divided into different classes of shares, the rights attached to any class may only be varied, whether or not our company is in liquidation, with the consent in writing of or by a resolution passed at a meeting by the holders of not less than 50 percent of the issued shares in that class.

Amendment of governing documents

Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, our memorandum and articles of association may be amended by a resolution of shareholders and, subject to certain exceptions, by a resolution of directors. Any amendment is effective from the date it is registered at the Registry of Corporate Affairs in the British Virgin Islands.

EX-4.2 3 tanh_ex42.htm TRANSLATION OF EMPLOYMENT AGREEMENT tanh_ex42.htm

EXHIBIT 4.2

Employment Agreement

Party A: Tantech Holdings Ltd.

Party B: Weilin Zhang, ID NO. : [ ]

According to the relevant provisions of the “Contract Law of the People’s Republic of China”, both parties A and B reached an agreement on the employment of Party B as follows.

1. Employment

Party A hires Party B as the company’s CFO.

2. Responsibilities of Party B:

(1) Assist the CEO of the company to formulate the company’s development strategy, and provide forward-looking warnings and measures from the directions of finance, capital, risk control, and policy;

(2) provide comprehensive financial management from product cost analysis and management, financial control, tax planning, management reports, business analysis and development planning, corporate financing and deployment, and improve the efficiency of capital;

(3) Establish and improve financial systems and standards, establish a scientific and systematic financial accounting system and financial monitoring system, and conduct effective internal financial control and enterprise evaluation;

(4) Formulate effective financing strategies and plans, including financing schemes, equity strategies, and use various financial tools and financing tools to ensure the company’s optimal capital structure;

(5) As a senior management of the company, participate in capital operations such as company acquisitions, mergers, and asset restructuring;

(6) Familiar with capital market , good relationship with investors and funds, provide financial advice and decision support for the company’s major investment, financing, mergers and acquisitions, and participate in risk assessment, guidance, tracking and control;

(7) Responsible for providing detailed and clear financial performance and relevant corporate financial and operational status reports to the CEO, board of directors, and investors to provide strategic basis for making business decisions;

(8) Supervise fund management reports and final accounts; preside over the preparation and review of various standardized financial statements to provide timely and effective financial analysis models for the company;

(9) Review financial statements and submit financial management reports; participate in the review of company legal documents, coordination of legal affairs, compliance and operation.

3. Term

The appointment period is from July 1, 2025 to June 30, 2028. If the two parties have not proposed to renew the contract before the expiration of the agreement, the agreement shall be deemed to be automatically terminated on the expiration date.

4. Working methods

Party B works full-time in Party A, the working hours refer to Party B’s personnel system; the place of work is Lishui; Party B can no longer concurrently serve as CFO of other listed companies outside the Forsen system.

5. Compensation and Payment:

Compensation: RMB 300,000 per year.

The payment method : RMB 25,000 per month

Party B ‘s travel expenses incurred for Party A ‘s work are reported and reimbursed according to the invoice.

6. Confidentiality

In view of the nature of Party B ‘s work, Party B ‘s confidentiality obligations are set out in the Confidentiality Agreement signed by both parties.

7. Settlement of disputes

This agreement becomes effective after the official seal is signed by both parties. Disputes arising from the performance of this agreement will be resolved through consultation between the two parties.

8. This agreement is made in duplicate, with the same legal effect, one for each party.

Party A (Stamp) Tantech Holdings Ltd		Party B (Signature): Weilin Zhang

Date:

EX-4.15 4 tanh_ex415.htm ENGLISH TRANSLATION OF TERMINATION AGREEMENT tanh_ex415.htm

EXHIBIT 4.15

TERMINATION AGREEMENT FOR EQUITY TRANSFER

Party A: AFRICAN FOREST GROUP LIMITED

Party B: EAG INTERNATIONAL VANTAGE CAPITALS LIMITED

Regarding the Termination Agreement for Equity Transfer of XINTONG INTERNATIONAL TRADING LIMITED

Agreement No.: 2025-12-18

Date: December 18, 2025

This Termination Agreement for Equity Transfer (the “Agreement”) is entered into on December 18, 2025 in Lishui, Zhejiang by and among:

Party A: AFRICAN FOREST GROUP LIMITED

Party B: EAG INTERNATIONAL VANTAGE CAPITALS LIMITED

Target Company (Party C): XINTONG INTERNATIONAL TRADING LIMITED

(Each of Party A and Party B is hereinafter referred to as a “Party”, and collectively as the “Parties”.)

WHEREAS:

XINTONG INTERNATIONAL TRADING LIMITED (the “Target Company”) is a company duly incorporated and validly existing under the laws of Hong Kong, with its registered address at 6/F, Manulife Place, 348 Kwun Tong Road, Kowloon, Hong Kong.

Party A originally held 100% equity of the Target Company. On April 18, 2025, Party A transferred 85% equity of the Target Company to Party B pursuant to the Equity Transfer Agreement.

Due to conflicts between Party B’s development plan and that of Shandong Liansen Ecological Development Co., Ltd., Party B expects not to achieve the anticipated returns. After friendly consultation, the Parties agree to terminate the transaction. Party B shall return the equity to Party A, and Party A shall return the consideration paid.

NOW, THEREFORE, the Parties agree as follows:

1. Return of Equity

1.1. Party B agrees to return to Party A, in accordance with the provisions of this Agreement, the 85% equity interest in the Target Company held by Party B, together with all associated shareholder rights and obligations arising therefrom (including all shareholder rights and obligations in respect of the Target Company’s direct and indirect subsidiaries and their assets) (hereinafter referred to as the “Target Equity”). Party A agrees to accept the return of the equity interest in the Target Company in accordance with this Agreement.

1.2. Following the return of the equity in this transaction, the shareholding structure of the Target Company shall be as follows:

2. Refund of Equity Transfer Consideration and Payment Arrangement

The total consideration for the return of the equity transfer is RMB 488,038,338 (in words: Renminbi Four Hundred Eighty-Eight Million Thirty-Eight Thousand Three Hundred Thirty-Eight Yuan Only). The payment shall be made as follows:

2.1 It was agreed in the original agreement that RMB 95,000,000 would be paid by Party B to Party A through issuance of convertible bonds by April 30, 2025. As of December 18, 2025, Party A has received RMB 69,075,985.11 from Party B in USDT equivalent payment. Upon effectiveness of this Agreement, Party A shall refund RMB 69,075,985.11 to Party B, and any unpaid portion shall no longer be required to be paid.

2.2 It was agreed in the original agreement that RMB 335,700,000 would be paid by Party B to Party A by April 25, 2025 through receivables from Party B’s affiliated companies. As of December 18, 2025, Party B has completed payment of RMB 335,700,000 via such receivables, and Party A has completed the collection of all related receivables. Accordingly, upon effectiveness of this Agreement, Party A shall refund RMB 335,700,000 to Party B.

2.3 It was agreed in the original agreement that the remaining balance would be settled in cash in installments by September 30, 2025. As of December 18, 2025, Party B has paid RMB 57,338,338 through receivables, and Party A has recovered RMB 5,000,000 from Anhui Huifeng Yonghui International Trading Co., Ltd. Accordingly, upon effectiveness of this Agreement, Party A agrees to refund the RMB 5,000,000 to Party B, and return the remaining receivables amounting to RMB 52,338,338 to Party B.

2.4 As of December 18, 2025, the total equity transfer consideration received by Party A from Party B amounts to RMB 409,775,985.11. The Parties agree that Party A shall refund such amount to Party B in installments, and Party A shall also pay Party B a one-time capital occupation fee of RMB 20,000,000, as follows:

2.4.1 On or before April 30, 2026, pay a one-time capital occupation fee of RMB 20,000,000;

2.4.2 On or before September 30, 2026, refund principal of RMB 50,000,000;

2.4.3 On or before March 31, 2027, refund principal of RMB 50,000,000;

2.4.4 On or before September 30, 2027, refund principal of RMB 50,000,000;

2.4.5 On or before March 31, 2028, refund the remaining outstanding balance in full.

3. Delivery of Target Equity and Handover of the Target Company

3.1 Handover of the Target Company: The Parties agree that after execution of this Agreement, Party B shall ensure that the management team of the Target Company (including its direct and indirect subsidiaries) shall return to Party A the following documents and items:

A. The official seals of the Target Company (including its direct and indirect subsidiaries), including company seal, financial seal, legal representative seal, and corporate seal;

B. All financial records of the Target Company (including its direct and indirect subsidiaries), including accounting vouchers, accounting books, financial statements, bank account information, and all other financial documents;

C. Business licenses, basic account information, asset ownership certificates, and other similar documents of the Target Company (including its direct and indirect subsidiaries);

D. Any other important contracts, documents, drawings, technical materials, and other items that Party B considers necessary to be transferred.

4. Accounts Receivable and Accounts Payable

4.1 Liabilities and Contingent Liabilities:

With respect to the liabilities and/or contingent liabilities existing in the Target Company and its direct and indirect subsidiaries as of the Closing Date, Party A has fully disclosed such liabilities to Party B and undertakes to disclose any changes thereto (if any) within one (1) business day.

4.2 All liabilities shall be handled by Party A, and Party B and its affiliates shall bear no liability or compensation obligations.

5. Taxes

5.1 All taxes and fees arising from the equity transfer between Party A and Party B under this Agreement shall be borne by the respective Parties in accordance with applicable laws.

6. Notices and Delivery

6.1 The contact addresses and details designated by each Party are set forth in the annex to this Agreement.

6.2 Any notice, request, instruction, or other document relating to this Agreement shall be delivered to the addresses set forth in the annex. If any Party changes its contact details, it shall notify the other Parties at least seven (7) business days in advance. If any Party fails to provide updated contact details, or provides incorrect details, or fails to timely notify changes, the sending Party shall not bear any responsibility for delay or failure of delivery.

7. Representations and Warranties of Party A

Party A undertakes to make payments of the refund amounts within the timelines stipulated in this Agreement.

8. Representations and Warranties of Party B

Party B shall cooperate with Party A to complete the relevant change registration procedures for the equity transfer within the timeframe stipulated in this Agreement.

9. Confidentiality

9.1 Party A and Party B shall keep strictly confidential the terms of this Agreement and any matters related hereto. Without prior written consent of the other Parties, no Party shall disclose any information relating to this Agreement to any third party other than those involved in this Agreement.

10. Effectiveness, Amendment and Supplement

10.1 This Agreement shall become effective upon execution by the Parties (signature and/or seal).

10.2 Any amendment to this Agreement shall be made in writing and agreed upon by all Parties.

10.3 Any matters not covered herein may be set out in a supplementary agreement executed in writing.

11. Termination of Agreement

11.1 In the event that circumstances arise which make it impossible to achieve the purpose of this Agreement, any Party may unilaterally terminate this Agreement by giving written notice to the other Party within one (1) business day of its decision.

12. Liability for Breach

12.1 In the event of any breach of this Agreement, the breaching Party shall promptly take remedial measures and shall indemnify the non-breaching Party for any losses incurred as a result.

13. Dispute Resolution and Severability

13.1 Any disputes arising from the validity, performance, breach, or termination of this Agreement shall be resolved through friendly negotiation. If negotiation fails, any Party may submit the dispute to the courts or arbitration institutions in Hong Kong.

13.2 If any provision of this Agreement is invalid or unenforceable, such invalidity or unenforceability shall not affect the validity of the remaining provisions, unless such invalid provision materially affects the fundamental intent of this Agreement.

14. Force Majeure

14.1 Force majeure refers to events such as war, riots, strikes, epidemics (including COVID-19), fire, flood, earthquake, storm, tidal wave, or other natural disasters, as well as any other unforeseeable, unavoidable, or insurmountable events beyond the control of both Parties.

14.2 Neither Party shall be liable for any failure or delay in performance due to force majeure. If force majeure continues for more than forty (40) days and prevents the achievement of the purpose of this Agreement, either Party may terminate this Agreement, and losses shall be borne by each Party respectively.

15. Miscellaneous

15.1 Headings in this Agreement are for convenience only and shall not affect interpretation.

15.2 The annexes to this Agreement form an integral part of this Agreement and shall have the same legal effect.

15.3 This Agreement is executed in six (6) originals, with Party A, Party B, and the Target Company holding two (2) copies each.

(No further text below this page. Execution page follows.)

(This page is the execution page of the Equity Transfer Agreement)

This Agreement is executed by the following Parties on the date set forth on the first page of this Agreement:

Party A (Seal): AFRICAN FOREST GROUP LIMITED

Authorized Representative of Party A (Signature/Seal):

Party B (Seal): EAG INTERNATIONAL VANTAGE CAPITALS LIMITED

Authorized Representative of Party B (Signature/Seal):

Party C (Seal): XINTONG INTERNATIONAL TRADING LIMITED

EX-8.1 5 tanh_ex81.htm LIST OF SUBSIDIARIES tanh_ex81.htm

EXHIBIT 8.1

SUBSIDIARIES

List of Subsidiaries

Company Name (English)	Company Name (Chinese)	Country of Incorporation/Formation	Ownership
EPakia Inc.	N/A	Delaware, U.S.	Wholly owned subsidiary of Tantech Holdings Ltd

USCNHK Group Limited	N/A	Hong Kong	Wholly owned subsidiary of Tantech Holdings Ltd

EAG International Vantage Capitals Limited	欧亚通国际资本有限公司	Hong Kong	Wholly owned subsidiary of Tantech Holdings Ltd

TANHOME INC	N/A	California, U.S.	Wholly owned subsidiary of Tantech Holdings Ltd

TAHHOME GROUP INC	N/A	California, U.S.	Wholly owned subsidiary of TANHOME INC

China East Trade Co., Limited	中国上东贸易有限公司	Hong Kong	Wholly owned subsidiary of EAG International Vantage Capitals Limited

Eurasia New Energy Automotive (Jiangsu) Co., Ltd.	欧亚通新能源（江苏）汽车有限公司	People’s Republic of China	Wholly owned subsidiary of EAG International Vantage Capitals Limited

Eurasia Holdings (Zhejiang) Co., Ltd.	欧亚通控股（浙江）有限公司	People’s Republic of China	Wholly owned subsidiary of EAG International Vantage Capitals Limited

Shangchi (Zhejiang) Intelligent Equipment Co., Ltd.	上弛(浙江)智能设备有限公司	People’s Republic of China	Wholly owned subsidiary of EAG International Vantage Capitals Limited

Shanghai Jiamu Investment Management Co., Ltd.	上海佳木投资管理有限公司	People’s Republic of China	Wholly owned subsidiary of EAG International Vantage Capitals Limited

Zhejiang Shangchi New Energy Automobile Co., Ltd.	浙江尚尼莱科技有限公司	People’s Republic of China	Wholly owned subsidiary of Shanghai Wangju Industrial Group Co., Ltd.

Lishui Smart New Energy Automobile Co., Ltd.	丽水智动新能源车辆有限公司	People’s Republic of China	Wholly owned subsidiary of Shanghai Wangju Industrial Group Co., Ltd.

Zhejiang Zhuguxingqi Technology Co., Ltd.	浙江竹谷兴企科技有限公司	People’s Republic of China	Wholly owned subsidiary of Shanghai Wangju Industrial Group Co., Ltd.

Hangzhou Eurasia Supply Chain Co., Ltd.	杭州欧亚供应链有限公司	People’s Republic of China	Wholly owned subsidiary of Eurasia Holdings (Zhejiang) Co., Ltd.

Gangyu Trading (Jiangsu) Co., Ltd.	港誉贸易（江苏）有限公司	People’s Republic of China	Wholly owned subsidiary of Euroasia New Energy Automotive (Jiangsu) Co., Ltd.

Shanghai Wangju Industrial Group Co., Ltd.	上海旺桔实业集团有限公司	People’s Republic of China	Wholly owned subsidiary of Shanghai Jiamu Investment Management Co., Ltd.

Shenzhen Shangdong Trading Co., Ltd.	深圳市上东贸易有限公司	People’s Republic of China	Wholly owned by Shanghai Wangju Industrial Group Co., Ltd.

First International Commercial Factoring (Shenzhen) Co., Ltd.	首保国际商业保理（深圳）有限公司	People’s Republic of China	75% owned by Shenzhen Shangdong Trading Co., Ltd., 25% owned by China East Trade Co., Limited.

EX-12.1 6 tanh_ex121.htm CERTIFICATION tanh_ex121.htm

EXHIBIT 12.1

CERTIFICATION

I, Zheyuan Liu, certify that:

1.	I have reviewed this annual report on Form 20-F of Tantech Holdings Ltd;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.	The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

	Date: May 14, 2026

	By:	/s/ Zheyuan Liu
	Name:	Zheyuan Liu
	Title:	Chief Executive Officer

EX-12.2 7 tanh_ex122.htm CERTIFICATION tanh_ex122.htm

EXHIBIT 12.2

CERTIFICATION

I, Weilin Zhang, certify that:

1.	I have reviewed this annual report on Form 20-F of Tantech Holdings Ltd;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.	The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

	Date: May 14, 2026

	By:	/s/ Weilin Zhang
	Name:	Weilin Zhang
	Title:	Chief Financial Officer

EX-13.1 8 tanh_ex131.htm CERTIFICATION tanh_ex131.htm

EXHIBIT 13.1

CERTIFICATION

In connection with the Annual Report of Tantech Holdings Ltd (the “Company”) on Form 20-F for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Zheyuan Liu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Date: May 14, 2026

	By:	/s/ Zheyuan Liu
	Name:	Zheyuan Liu
	Title:	Chief Executive Officer

EX-13.2 9 tanh_ex132.htm CERTIFICATION tanh_ex132.htm

EXHIBIT 13.2

CERTIFICATION

In connection with the Annual Report of Tantech Holdings Ltd (the “Company”) on Form 20-F for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Weilin Zhang, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Date: May 14, 2026

	By:	/s/ Weilin Zhang
	Name:	Weilin Zhang
	Title:	Chief Financial Officer

EX-23.1 10 tanh_ex231.htm CONSENT LETTER tanh_ex231.htm

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements on Form F-3 (File No. 333-274274 and 333-251509) and on Form S-8 (File No. 333-205821) of our report dated May 14, 2026, with respect to our audits of the consolidated financial statements of Tantech Holdings Ltd and its subsidiaries, which appears in this Annual Report on Form 20-F for the years ended December 31, 2025 and 2024.

/s/ YCM CPA INC.

PCAOB ID 6781

Irvine, California

May 14, 2026