13.05.2022, 19:00

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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Source: TD Holdings, Inc. Related Stocks: NASDAQ:GLG