TD Holdings, Inc. Reports Fiscal Year 2022 Financial Results


    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


     

     

     

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