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PR Newswire

TD Holdings, Inc. Reports First Quarter 2022 Financial Results Showing Progress of Company Turnaround

Revenue up 63% year-over-year

SHENZHEN, China, May 13, 2022 /PRNewswire/ — TD Holdings, Inc. (Nasdaq: GLG) (the “Company”), a commodities trading service provider in China, today announced its unaudited financial results for the first quarter ended March 31, 2022, supporting the turnaround efforts made by the Company.

Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, “Despite facing a challenging macroeconomic situation, we delivered strong financial results in the first quarter, reflecting the sustainable profitability of our business model. In the first quarter of 2022, our revenue was up 63% to $48.16 million from $29.58 million in the same period of last year, demonstrating the continued execution and progress on our strategic development. Our net income was $1.59 million in the first quarter of 2022, compared with the net loss of $1.54 million for the same period of last year, indicating that we have realized the goal of reaching break-even or even profitable. The significant increase in our financial results marks an excellent start to the year and supports our growth objectives. Looking ahead to the remainder of the year and beyond, we will continue our efforts to serve our customers, explore opportunities in the market of global gold spot trading, digital cloud warehouse as well as lightweight new materials, and drive growth in our business by leveraging our market leadership and investing to capitalize on robust demand dynamics. We believe that we remain well-positioned as the industry leader while maintaining our competitive advantages to deliver long-term growth and generate long-term shareholder value.”

First Quarter 2022 Financial Highlights

Revenue from commodities trading business was $48.16 million, consisting of $47.58 million from sales of commodities products, and $0.58 million from supply chain management services for the quarter ended March 31, 2022, compared with $29.58 million for the same quarter ended March 31, 2021, representing an increase of $18.58 million or 63%.

Net income was $1.59 million, compared with the net loss of $1.54 million for the same quarter ended March 31, 2021.

Basic and diluted earnings per share was $0.01, compared with basic and diluted loss per share of $0.02 for the same quarter ended March 31, 2021.

First Quarter 2022 Financial Results

Revenues

For the three months ended March 31, 2022, the Company sold non-ferrous metals to thirteen third party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $47.58 million from sales of commodity products for the three months ended March 31, 2022, compared with $29.44 million from sales of commodity products for the three months ended March 31, 2021.

For the three months ended March 31, 2022, the Company provided $0.58 million revenue from supply chain management services to third party customers, compared with $0.15 million to third party customers for the three months ended March 31, 2021.

Cost of revenue

Our cost of revenue primarily includes the cost of revenue associated with commodity product sales and the cost of revenue associated with management services of supply chain. Total cost of revenue increased by $18.18 million, or 62% to $47.60 million for the three months ended March 31, 2022, from $29.42 million for the three months ended March 31, 2021, primarily due to the increase in the cost of revenue associated with commodity product sales in line with our business growth and expansion.

Selling, general, and administrative expenses 

Selling, general and administrative expenses increased by $0.68 million or 43%, to $2.25 million for the three months ended March 31, 2022, from $1.57 million for the three months ended March 31, 2021. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, amortizations of intangible assets and convertible notes, professional service fees and finance offering related fees. The increase was mainly attributable to (i) amortization of intangible assets of $1.03 million, and (ii) amortization of convertible notes of $0.11 million for the three months ended March 31, 2022 while there was no such issuance for the three months ended March 31, 2021.

Share-based payment for service

For the three months ended March 31, 2021, the share-based payment for service was $1.70 million. On March 4, 2021, the Company issued 750,000 fully-vested warrants with an exercise price of $0.01, with a five-year life, to engaged agent to complete the warrant waiver and exercise agreements. The Company applied Black-Scholes model and determined the fair value of the warrants to be $1.70 million. Significant estimates and assumptions used included stock price on March 4, 2021 of $2.27 per share, risk-free interest rate of one year of 0.08%, life of 5 years, and volatility of 71.57%.

For the three months ended March 31, 2022, no such expenses incurred.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $2.29 million, or 109%, to $4.39 million for the three months ended March 31, 2022, from $2.10 million for the three months ended March 31, 2021. The increase was primarily due to loans made to third party vendors for the three months ended March 31, 2022. The increase of interest income is in accordance with the increase in sales of commodity products. For the three months ended March 31, 2022, $0.72 million was attributed to related party and $3.67 million was generated from third party vendors.

Amortization of beneficial conversion feature and relative fair value of warrants relating to convertible promissory notes

For the three months ended March 31, 2022, the item represented the amortization of the beneficial conversion feature of $0.21 million of the three convertible promissory notes issued on January 6, 2021, March 4, 2021 and October 4, 2021.

Net Income(loss)

Net income was $1.59 million for the three months ended March 31, 2022, compared with the net loss of $1.54 million for the three months ended March 31, 2021.

First Quarter 2022 Cash Flows

As of March 31, 2022, the Company had cash and cash equivalents of $3.57 million, as compared with $5.64 million as of the same period of 2021.

Net cash provided by operating activities was $3.75 million for the three months ended March 31, 2022, as compared with net cash used in operating activities of $4.22 million for the same period of 2021.

Net cash used in investing activities was $50.00 million for the three months ended March 31, 2022, compared with $25.06 million for the same period of 2021.

Net cash provided by financing activities was $45.50 million for the three months ended March 31, 2022, compared with $32.15 million for the same period of 2021.

About TD Holdings, Inc.

TD Holdings, Inc. is a service provider currently engaging in commodities trading business and supply chain service business in China. Its commodities trading business primarily involves purchasing non-ferrous metal product from upstream metal and mineral suppliers and then selling to downstream customers. Its supply chain service business primarily has served as a one-stop commodity supply chain service and digital intelligence supply chain platform integrating upstream and downstream enterprises, warehouses, logistics, information, and futures trading. For more information, please visit http://ir.tdglg.com.

Safe Harbor Statement

This press release may contain certain “forward-looking statements” relating to the business of TD Holdings, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: there is uncertainty about the spread of the COVID-19 virus and the impact it will have on the Company’s operations, the demand for the Company’s products and services, global supply chains and economic activity in general. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For more information, please contact:

Ascent Investor Relations LLC
Ms. Tina Xiao
Email:tina.xiao@ascent-ir.com 
Tel: +1 917 609 0333

 

 

 

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2022 and December 31, 2021

(Expressed in U.S. dollars, except for the number of shares)

March 31,

December 31,

2022

2021

ASSETS

Current Assets

Cash and cash equivalents

$

3,574,342

$

4,311,068

Loans receivable from third parties

175,999,505

115,301,319

Accounts receivable

55,004

Prepayments

1,892,498

Due from related parties

11,358,373

Other current assets

4,950,447

3,288,003

Inventories

133,857

Total current assets

186,605,653

134,258,763

Non-Current Assets

Plant and equipment, net

4,704

2,872

Goodwill

71,335,973

71,028,283

Intangible assets, net

20,319,879

21,257,337

Right-of-use assets, net

864,671

888,978

Total non-current assets

92,525,227

93,177,470

Total Assets

$

279,130,880

$

227,436,233

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable

$

3,236,098

$

3,337,758

Bank borrowings

1,134,180

1,129,288

Third party loans payable

485,370

476,779

Contract liabilities

7,145,609

5,221,874

Due to related parties

21,174

Income tax payable

9,564,169

8,441,531

Lease liabilities

337,372

310,665

Other current liabilities

4,809,745

4,297,793

Convertible promissory notes

2,244,675

3,562,158

Total current liabilities

28,957,218

26,799,020

Non-Current Liabilities

Deferred tax liabilities

3,986,521

4,178,238

Lease liabilities

534,913

586,620

Total non-current liabilities

4,521,434

4,764,858

Total liabilities

33,478,652

31,563,878

Commitments and Contingencies (Note 16)

Equity

Common stock (par value $0.001 per share,
  600,000,000 shares authorized; 213,001,894 and
  138,174,150 shares issued and outstanding at March
  31, 2022 and December 31, 2021, respectively)

213,002

138,174

Additional paid-in capital

272,020,401

224,790,409

Statutory surplus reserve

1,477,768

1,477,768

Accumulated deficit

(40,606,746)

(42,200,603)

Accumulated other comprehensive income

12,547,803

11,666,607

Total Equity

245,652,228

195,872,355

Total Liabilities and Equity

$

279,130,880

$

227,436,233

 

 

 

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended March 31, 2022 and 2021

(Expressed in U.S. dollars, except for the number of shares)

For the Three Months
Ended
March 31,

2022

2021

Revenues

- Sales of commodity products – third parties

$

47,583,965

$

9,033,467

- Sales of commodity products – related parties

20,403,015

- Supply chain management services – third parties

575,151

145,775

Total revenue

48,159,116

29,582,257

Cost of revenues

- Commodity product sales-third parties

(47,590,576)

(9,032,412)

- Commodity product sales-related parties

(20,386,181)

- Supply chain management services-third parties

(11,602)

(1,050)

Total operating costs

(47,602,178)

(29,419,643)

Gross profit

556,938

162,614

Operating expenses

Selling, general, and administrative expenses

(2,247,707)

(1,570,379)

Share-based payment for service

(1,695,042)

Total operating expenses

(2,247,707)

(3,265,421)

Net Operating Loss

(1,690,769)

(3,102,807)

Other income(expenses), net

Interest income

4,390,341

2,098,857

Interest expenses

(110,326)

(127,423)

Amortization of beneficial conversion feature relating to
  issuance of convertible promissory notes

(213,367)

Other income (expenses), net

95,709

(6,434)

Total other income, net

4,162,357

1,965,000

Net income (loss) before income taxes

2,471,588

(1,137,807)

Income tax expenses

(877,731)

(400,469)

Net income (loss)

1,593,857

(1,538,276)

Comprehensive Income (loss)

Net income (loss)

1,593,857

(1,538,276)

Foreign currency translation adjustments

881,196

(643,578)

Comprehensive Income (loss)

$

2,475,053

$

(2,181,854)

Earnings (loss) per share – basic and diluted

Continuing Operation- Earnings (loss) per share – basic

$

0.01

$

(0.02)

Continuing Operation- Earnings (loss) per share –diluted

$

0.01

$

(0.02)

Weighted Average Shares Outstanding-Basic

198,441,160

93,209,034

Weighted Average Shares Outstanding- Diluted

213,552,950

95,764,295

 

 

 

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2022 and 2021

(Expressed in U.S. dollar)

For the Three Months
Ended
March 31,

2022

2021

Cash Flows from Operating Activities:

Net income (loss)

$

1,593,857

(1,538,276)

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

Depreciation of plant and equipment

3,217

Amortization of intangible assets

1,029,186

883,938

Amortization of right of use assets

76,983

Amortization of discount on convertible promissory notes

111,000

40,833

Interest expense for convertible promissory notes

93,285

69,417

Amortization of beneficial conversion feature of convertible promissory
  notes

213,367

Monitoring fee relating to convertible promissory notes

69,685

Deferred tax liabilities

(209,744)

(205,458)

Share-based payment for service

1,695,042

Changes in operating assets and liabilities:

Escrow account receivable

(54,985)

Inventories

(133,810)

Other current assets

(29,775)

(696,357)

Prepayments

(1,891,842)

(8,170,226)

Contract liabilities

1,900,456

5,501,254

Due to related parties

(21,259)

641,386

Due from third parties

(481,816)

Due from related parties

28,897

(2,943,162)

Accounts payable

(116,078)

Income tax payable

1,085,694

530,511

Other current liabilities

499,661

(24,417)

Lease liabilities

(19,734)

Due to third party loans payable

6,523

Net cash provided by (used in) operating activities

3,752,768

(4,215,515)

Cash Flows from Investing Activities:

Purchases of plant and equipment

(5,039)

Purchases of operating lease assets

(58,617)

Purchases of intangible assets

(5,090,323)

Loans made to related parties

(18,662,034)

Loans made to third parties

(60,177,853)

(1,307,835)

Collection of loans from related parties

11,066,822

Investments in other investing activities

(828,601)

Net cash used in investing activities

(50,003,288)

(25,060,192)

Cash Flows from Financing Activities:

Proceeds from issuance of common stock under ATM transaction

2,192,988

Proceeds from issuance of common stock under private placement
  transactions

45,500,000

24,450,000

Proceeds from convertible promissory notes

4,500,000

Proceeds from borrowings from related parties

1,196,697

Repayment made on loans from third parties

(185,103)

Net cash provided by financing activities

45,500,000

32,154,582

Effect of exchange rate changes on cash and cash equivalents

13,794

57,113

Net (decrease)/increase in cash and cash equivalents

(736,726)

2,935,988

Cash and cash equivalents at beginning of period

4,311,068

2,700,013

Cash and cash equivalents at end of period

$

3,574,342

$

5,636,001

Supplemental Cash Flow Information

Cash paid for interest expenses

$

22,109

$

Cash paid for income taxes

$

1,781

$

75,416

Supplemental disclosure of Non-cash investing and financing activities

Right-of-use assets obtained in exchange for operating lease obligations

$

58,617

$

Issuance of common stocks in connection with conversion of convertible
  promissory notes

$

1,804,820

$

Issuance of common stocks in connection with warrant cashless exercise in
  March 2021

$

$

1,439,826

 

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