United States securities and exchange commission logo
September 12, 2022
Weilin Zhang
Chief Financial Officer
Tantech Holdings Ltd
c/o Tantech Holdings (Lishui) Co., Ltd.
No. 10 Cen Shan Road, Shuige Industrial Zone , Lishui City
Zhejiang Province 323000
People s Republic of China
Re: Tantech Holdings
Ltd
Form 20-F for the
Fiscal Year Ended December 31, 2021
Filed July 18, 2022
File No. 001-36885
Dear Mr. Zhang:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for the Fiscal Year Ended December 31, 2021
Item 3. Key Information
Our Corporate Structure and the Operations of our PRC Subsidiaries, page
3
1. We note that you are
not a Chinese operating Company but rather a British Virgin Islands
holding Company with
operations conducted by your subsidiaries. Please provide, early in
the Key Information
section, a diagram of the Company's corporate structure.
Permissions Required from the PRC Authorities for Our Operations, page 4
2. You state that given
uncertainties of interpretation and implementation of relevant laws
and regulations and the
enforcement practice by government authorities you cannot assure
that you have obtained
all the permits or licenses required for conducting your business in
Weilin Zhang
FirstName LastNameWeilin Zhang
Tantech Holdings Ltd
Comapany 12,
September NameTantech
2022 Holdings Ltd
September
Page 2 12, 2022 Page 2
FirstName LastName
China. State affirmatively whether you have received all requisite
permits and
licenses and whether any permissions have been denied.
3. You state that you and your PRC subsidiaries are not required to go
through cybersecurity
review by the Cyberspace Administration of China ("CAC"). Please
explain the basis for
your belief that you are not subject to the review or required to
obtain prior approval of
the CAC. Further, in light of recent events indicating greater
oversight by the CAC over
data security, particularly for companies seeking to list on a foreign
exchange, please
revise your disclosure to explain how this oversight impacts your
business and your
securities and to what extent you believe that you are compliant with
the regulations or
policies that have been issued by the CAC to date.
Part I
Cash Flows through our Organization, page 5
4. Please update your disclosure in this section to quantify any
dividends or distributions that
a subsidiary has made to the holding company and which entity made
such transfer, and
their tax consequences. If no distributions have been made to the
holding company, please
explicitly state so. In addition, to the extent you have cash
management policies that
dictate how funds are transferred throughout your organization please
summarize the
policies here and disclose the source of such policies (e.g., whether
they are contractual in
nature, pursuant to regulations, etc.); alternatively, affirmatively
state that you have no
such cash management policies in place. We also note that you have
provided your
subsidiaries with loans in 2019, 2020, and 2021 with principal amount
of $nil, $8.3
million and $19.0 million, respectively. Please clarify which
subsidiaries received such
loans. Lastly, describe any restrictions and limitations on your
ability to distribute
earnings from the company, including subsidiaries, to the parent
company and U.S.
investors.
A. Selected financial data, page 6
5. We note you have presented consolidating schedules showing Tantech
Holding and your
PRC/Hong Kong subsidiaries separately. However, the PRC/Hong Kong
subsidiaries
columns includes both wholly owned entities and the VIEs. In the
amended filing and for
periods where the VIE existed, the schedule should disaggregate the
parent company, the
VIEs and its consolidated subsidiaries, the WFOEs that are the primary
beneficiary of the
VIEs, and an aggregation of other entities that are consolidated. The
objective of this
disclosure is to allow an investor to evaluate the nature of assets
held by, and the
operations of, entities apart from the VIE, as well as the nature and
amounts associated
with intercompany transactions. Any intercompany amounts should be
presented on a
gross basis and when necessary, additional disclosure about such
amounts should be
included in order to make the information presented not misleading.
Weilin Zhang
Tantech Holdings Ltd
September 12, 2022
Page 3
Item 15. Controls and Procedures
(d) Changes in internal control over financial reporting, page 119
6. We note that you have had material weaknesses in your internal control
over financial
reporting since 2016 that have not been remediated. In your amended
filing, please revise
to clarify what specific steps remain to be completed in your
remediation plan. Also,
revise to disclose how long you estimate it will take to complete your
remediation plan
and disclose any associated material costs that you have incurred or
expect to incur.
Report of Independent Registered Public Accounting Firm, page F-2
7. The third paragraph of YCM CPA, Inc.'s report indicates that the
company s 2019
consolidated financial statements were audited by another auditor.
However, the other
auditors' report is not included in the filing. Please amend to
include a report from
your other auditor that opines on the financial statements for the
fiscal year ended
December 31, 2019 in accordance with Item 8.A.3 of Form 20-F.
Note 3 Variable Interest Entity Statements, page F-17
8. We note your disclosures that "[a]fter the VIE was dismantled, the
Company indirectly
owns 100 % of Wangbo. Wangbo and Jiyi keep owning 51% and 19% of
Shangchi
Automobile respectively. A third party keeps owning 30% of Shangchi
Automobile."
Describe to us in appropriate detail the transaction whereby you
dismantled your VIE
structure along with how you accounted for it within your financial
statements. Tell
us how Wangbo is no longer a VIE under ASC 810 considering that you
"indirectly" own
100% of Wangbo. Additionally, reconcile this statement with the
organization chart on
page 70 which shows Shanghai Jiamu Investment Management Co. Ltd.
owning 100% of
Wangbo.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Lynn Dicker at (202) 551-3616 or Kevin Kuhar, Branch
Chief, at (202)
551-3662 if you have questions regarding comments on the financial statements
and related
matters. Please contact Doris Stacey Gama at (202) 551-3188 or Jason Drory at
(202) 551-
8342 with any other questions.
FirstName LastNameWeilin Zhang Sincerely,
Comapany NameTantech Holdings Ltd
Division of
Corporation Finance
September 12, 2022 Page 3 Office of Life
Sciences
FirstName LastName