SHENZHEN, China, March 11, 2023 /PRNewswire/ — TD Holdings, Inc. (Nasdaq: GLG) (the “Company”), a commodities trading service provider in China, today announced its financial results for the year ended December 31, 2022.

Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, “The challenging market environment and uncertain macro-economic conditions have significant impact on our business. We continue to deliver high quality services to our customers and our efforts have been greatly recognized by our customers and industry. Our online to offline e-commerce commodities trading platform, tongdow.com, was awarded Top 100 China Industrial Internet Enterprise of 2022. Our subsidiary Shenzhen Qianhai Baiyu Supply Chain Co., Ltd. was awarded the 2022 China (Industry) Leading Enterprise. These awards once again demonstrate the competitiveness of the Company in the industry. Looking ahead to 2023, we expect to take multiple necessary initiatives to strengthen our business resilience and enhance our market position. Leveraging our experience and expertise, we remain focused on improving our services, enhancing our brand awareness and executing the strategic plan to capture the opportunities ahead of us as the market recovers.”

Fiscal Year 2022 Financial Highlights

  • Total revenue was $156.84 million, consisting of $155.44 million from sales of commodity products, and $1.39 million from supply chain management services for the year ended December 31, 2022, a decrease of 22% from $201.13 million for the year ended December 31, 2021.
  • Net income was $4.25 million for the year ended December 31, 2022, compared with net loss of $0.94 million for the year ended December 31, 2021.
  • Basic and diluted earnings per share were $0.08 and $0.07 respectively, for the year ended December 31, 2022, compared with basic and diluted loss per share of $0.04 for the year ended December 31, 2021.

Fiscal Year 2022 Financial Results

Revenues

For the year ended December 31, 2022, the Company sold non-ferrous metals to 29 third-party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $155.44 million from sales of commodity products for the year ended December 31, 2022, compared with $197.95 million for the year ended December 31, 2021.

For the year ended December 31, 2022, the Company earned commodity distribution commission fees of $1.39 million from third-party vendors, compared with $3.18 million from third-party vendors for the year ended December 31, 2021.

Cost of revenue

Cost of revenue primarily includes cost of revenue associated with commodity product sales and cost of revenue associated with management services of supply chain. Total cost of revenue decreased by $42.33 million, or 21% to $155.80 million for the year ended December 31, 2022, from $198.13 million for the year ended December 31, 2021, primarily due to a decrease of $42.25 million in cost of revenue associated with commodity product sales. The decreased cost of revenue is in line with the decrease in sales.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $0.71 million or 9%, to $8.84 million for the year ended December 31, 2022, from $8.14 million for the year ended December 31, 2021. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expenses, amortizations of intangible assets and convertible promissory notes, professional service fees and finance offering related fees. The increase was mainly attributable to (1) amortization of intangible assets of $4.63 million, and (2) amortization of convertible promissory notes of $1.21 million.

Share-based payment for service

On December 16, 2022, the Company issued 300,000 shares of the Company’s common stock as compensation to a settlement and mutual release agreement with White Lion Capital, LLC, a Nevada limited liability company, and recognized $324,000 share-based payment for service to profit and charged back $280,000 share-based payment for service to profit to a PR service provider.

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 an agent who was engaged to complete the warrant waiver and exercise agreements. The Company applied the Black-Scholes model and determined the fair value of the warrants to be $1,695,042. 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 five years, and volatility of 71.57% for the year ended December 31, 2021.

On July 16, 2021, the Company issued 140,000 shares of the Company’s common stock as compensation to a PR service provider for increasing the Company’s visibility in the financial news community, and recognized 141,400 share-based payment for service to profit.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $6.96 million or 69%, to $17.04 million for the year ended December 31, 2022, from $10.08 million for the year ended December 31, 2021. The increase was primarily due to the growth of loans made to third-party vendors for the year ended December 31, 2022.

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

For the year ended December 31, 2022, the item represented the amortization of beneficial conversion feature of $1.21 million of three convertible promissory notes issued on March 4, 2021, October 4, 2021 and May 6, 2022.

For the year ended December 31, 2021, the item represented the amortization of beneficial conversion feature of $1.46 million of three convertible promissory notes issued on January 6, 2021, March 4, 2021 and October 4, 2021.

Net income (loss)

Net income was $4.25 million for the year ended December 31, 2022, compared with net loss of $0.94 million for the year ended December 31, 2021.

Twelve Months Ended December 31, 2022 Cash Flows

As of December 31, 2022, the Company had cash and cash equivalents of $0.89 million, as compared with $4.31 million as of December 31, 2021.

Net cash provided by operating activities was $4.34 million for the year ended December 31, 2022, compared with $8.03 million for the year ended December 31, 2021.

Net cash used in investing activities was $125.54 million for the year ended December 31, 2022, compared with $71.52 million for the year ended December 31, 2021.

Net cash provided by financing activities was $117.39 million for the year ended December 31, 2022, compared with $64.12 million for the year ended December 31, 2021.

About TD Holdings, Inc.

TD Holdings, Inc. is a service provider currently engaging in the commodities trading business and supply chain service business in China. Its commodities trading business primarily involves purchasing non-ferrous metal products 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. 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.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2022 and 2021

December 31,

December 31,

2022

2021

ASSETS

Current Assets

Cash and cash equivalents

$

893,057

$

4,311,068

Loans receivable from third parties

143,174,634

115,301,319

Due from related parties

–

11,358,373

Inventories, net

458,157

–

Other current assets

4,040,477

3,288,003

Total current assets

148,566,325

134,258,763

Non-Current Assets

Plant and equipment, net

6,370

2,872

Goodwill

160,213,550

71,028,283

Intangible assets, net

54,114,727

21,257,337

Right-of-use assets, net

196,826

888,978

Total non-current assets

214,531,473

93,177,470

Total Assets

$

363,097,798

$

227,436,233

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable

$

1,269

$

3,337,758

Bank borrowings

1,005,083

1,129,288

Third party loans payable

460,587

476,779

Advances from customers

437,148

5,221,874

Due to related parties

38,767,481

21,174

Income tax payable

11,634,987

8,441,531

Lease liabilities

116,170

310,665

Other current liabilities

5,348,646

4,297,793

Convertible promissory notes

4,208,141

3,562,158

Total current liabilities

61,979,512

26,799,020

Non-Current Liabilities

Deferred tax liabilities

3,059,953

4,178,238

Lease liabilities

84,164

586,620

Total non-current liabilities

3,144,117

4,764,858

Total liabilities

65,123,629

31,563,878

Commitments and Contingencies (Note 16)

Shareholders’ Equity

Common stock (par value $0.001 per share, 600,000,000 shares authorized;
106,742,117 and 27,634,830 shares issued and outstanding as of December 31,
2022 and 2021, respectively) *

106,742

27,635

Additional paid-in capital

344,295,992

224,900,948

Statutory surplus reserve

2,602,667

1,477,768

Accumulated deficit

(38,800,375)

(42,200,603)

Accumulated other comprehensive (loss) income

(8,984,925)

11,666,607

Total TD Shareholders’ Equity

299,220,101

195,872,355

Non-controlling interest

(1,245,932)

–

Total Shareholders’ Equity

297,974,169

195,872,355

Total Liabilities and Shareholders’ Equity

$

363,097,798

$

227,436,233

 

*

Retrospectively restated due to five for one reverse stock split, see Note 13 – Reverse stock split of common stock.

 

 

TD HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2022 and 2021

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

 

For the Years Ended

December 31,

2022

2021

Revenues

     Sales of commodity products – third parties

$

155,443,398

$

173,904,016

     Sales of commodity products – related parties

–

24,049,999

     Supply chain management services – third parties

1,391,903

3,180,227

Total Revenues

156,835,301

201,134,242

Cost of revenues

     Commodity product sales – third parties

(155,789,519)

(173,996,000)

     Commodity product sales – related parties

–

(24,045,511)

     Supply chain management services – third parties

(7,525)

(84,118)

Total operating costs

(155,797,044)

(198,125,629)

Gross profit

1,038,257

3,008,613

Operating expenses

Selling, general, and administrative expenses

(8,844,739)

(8,137,481)

     Share-based payment for service

(44,000)

(1,836,442)

Total operating expenses

(8,888,739)

(9,973,923)

Other income (expenses), net

     Interest income

17,035,200

10,079,776

     Interest expenses

(523,980)

(313,965)

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

(1,212,617)

(1,463,883)

     Other income (expense), net

59,088

(285,774)

Total other income, net

15,357,691

8,016,154

Net income from continuing operations before income taxes

7,507,209

1,050,844

Income tax expenses

(3,253,672)

(1,991,201)

Net income (loss)

4,253,537

(940,357)

Less: Net loss attributable to non-controlling interests

(271,590)

–

Net income(loss) attributable to TD Holdings, Inc.’s Stockholders

$

4,525,127

$

(940,357)

Other comprehensive income (loss)

Net income (loss)

$

4,253,537

$

(940,357)

Foreign currency translation adjustment

(20,651,532)

4,781,112

Comprehensive (loss) income

(16,397,995)

3,840,755

Less: Total comprehensive loss attributable to non-controlling interests

(271,590)

–

Comprehensive (loss) income attributable to TD Holdings, Inc.

(16,126,405)

3,840,755

Weighted Average Shares Outstanding-Basic

52,972,727

21,483,527

Weighted Average Shares Outstanding- Diluted

58,590,270

24,219,866

income (loss) per share- basic

$

0.08

$

(0.04)

income (loss) per share- diluted

$

0.07

$

(0.04)

 

 

TD HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2022 and 2021

(Expressed in U.S. dollar)

 

For the Years Ended

December 31,

2022

2021

Cash Flows from Operating Activities:

Net income (loss)

$

4,253,537

$

(940,357)

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

     Depreciation of plant and equipment

2,885

622

      Amortization of right-of-use lease assets

306,546

45,309

     (Gain) loss on disposal of right-of-use lease assets

(20,092)

–

     Amortization of intangible assets

4,630,169

3,927,961

     Amortization of beneficial conversion feature of convertible promissory notes

1,212,617

489,000

     Interest expense for convertible promissory notes

465,201

417,784

     Amortization of discount on convertible promissory notes

434,333

–

     Share-based payment for service

44,000

1,836,442

     Standstill fee relating to convertible promissory notes

–

356,934

     Monitoring fee relating to convertible promissory notes

263,982

–

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

–

1,463,883

     Inventories impairment

17,540

–

     Deferred tax liabilities

(792,114)

(825,945)

Changes in operating assets and liabilities, (net of assets and liabilities acquired and
   disposed):

     Other current assets

1,830,247

5,558,942

     Inventories

(491,943)

–

     Prepayments

(456,052)

–

     Due from related parties

(15,986)

(496,242)

     Advances from customers

(4,497,189)

(4,170,261)

     Due from third parties

(192,670)

(2,619,091)

     Income tax payable

4,046,672

2,808,268

     Due to related parties

(20,071)

(5,516,085)

     Accounts payable

(3,162,561)

3,299,002

     Other current liabilities

(3,507,517)

1,039,735

     Lease liabilities

(41,152)

886,866

     Due to third party loans payable

24,977

471,243

Net cash provided by operating activities

4,335,359

8,034,010

Cash Flows from Investing Activities:

Purchases of intangible assets

–

(5,115,803)

Purchases of plant and equipment

(6,700)

(3,469)

Purchases of operating lease assets

(250,171)

(923,964)

Investment in subsidiary, net of cash acquired

(96,638,468)

(15,579,946)

Payment made on loans to third parties

(109,106,926)

(108,800,053)

Collection of loans from third parties

70,150,111

13,504,542

Collection of loans from related parties

10,448,662

45,397,738

Investments in other investing activities

(134,254)

–

Net cash used in investing activities

(125,537,746)

(71,520,955)

Cash Flows from Financing Activities:

Repayments made on loans to third parties

(29,735)

(558,088)

Repayment made on loans to related parties

–

(1,901,724)

Proceeds from issuance of common stock under ATM transaction

–

2,192,989

Proceeds from issuance of common stock under private placement transactions

114,420,000

57,877,941

Proceeds from issuance of convertible promissory notes

3,000,000

6,500,000

Proceeds from exercise of warrants

–

7,500

Net cash provided by financing activities

117,390,265

64,118,618

Effect of Exchange Rate Changes on Cash

394,111

979,382

Net (Decrease)/Increase in Cash

(3,418,011)

1,611,055

Cash, Beginning of Year

4,311,068

2,700,013

Cash from continuing operations

$

893,057

$

4,311,068

Cash paid for interest expense

$

83,496

$

92,062

Cash paid for income taxes

$

1,681

$

75,416

Supplemental disclosure of non-cash investing and financing activities

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

$

250,171

$

–

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

$

4,730,150

$

–

Issuance of common stocks in exchange of investments in one equity investee

$

–

$

1,439,826