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:[email protected]
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, | 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 | ||||||||
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 | (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 | ||||||||
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 | ||||||||
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 | 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 | 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 | $ | 1,804,820 | $ | - | ||||
Issuance of common stocks in connection with warrant cashless exercise in | $ | - | $ | 1,439,826 | ||||
SOURCE TD Holdings, Inc.
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