BEIJING, May 30, 2020 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company") (Formerly known as Bat Group, Inc.), a used luxurious car rental and commodities trading service provider in China today announced its financial results for the fiscal year ended December 31, 2019.
The Company began to operate its current used luxurious car leasing business in China, after it disposed its direct loans, loan guarantees and financial leasing services in July 2018, and began to operate commodities trading business in China in November 2019. In January 2020, we changed the Company's name to TD Holdings, Inc., which better represents our current focus on the new commodities trading business. The letter "T" in the name representing Chinese character for "Bronze," indicating the Company's focus on the commodities trading business, and particularly on the trading of nonferrous metals such as bronze as the main direction of the Company's business in the future.
Mrs. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "We are pleased to report our financial results for fiscal year 2019. We started our commodity trading business in late 2019. The turnover of China's commodity market has shown a rapid upward trend, and I believe that entering into the commodity trading business will bolster the Company's income and increase shareholder value. We will focus on non-ferrous metal commodities such as aluminum, copper, silver, and gold. We strive to become an emerging platform in the non-ferrous metal e-commerce industry by offering all participants in the non-ferrous metal e-commerce industry a seamless, one-stop transaction experience."
Fiscal Year 2019 Financial Highlights
Fiscal Year 2019 Financial Results
Revenues
We generate revenue from commodities trading business and used car leasing business.
Income from commodities trading business
In December 2019, we commenced our commodities trading business and we generated revenues from sales of commodity products and revenue from supply chain management consulting services.
In December 2019, we sold 55 tons of aluminum ingots to one customer and earned revenues of $100,427 from the sales of commodity products. There was no such revenue in fiscal year 2018.
We also launched supply chain management services to refer loans and distribute commodity products for our customers. In December 2019, we earned loan recommendation service fees of $323,623 for facilitation of loan volume of approximately 13.72 million (RMB 94.8 million) with two customers, and distribution service fees of $238,963 for facilitation sales for two customers. There was no such revenue in fiscal year 2018.
Income from used car leasing business
Income from used car leasing business was $1.83 million for the fiscal year ended December 31, 2019, as compared with $0.49 for the fiscal year 2018. The increase was mainly driven by the increase in the number of our self-owned used luxurious cars from 6 as of December 31, 2018 to 11 as of December 31, 2019 and expansion of our car leasing business to more extended geographic areas such as Shanghai and Chengdu in 2019 which attracted increased number of contracts from 185 for the fiscal year 2018 to 1,067 for the fiscal year 2019.
Operating costs
Cost associated with commodities trading business
The cost associated with commodities trading business was $0.59 million for the fiscal year 2019, comprised of purchase costs of aluminum ingots of $0.10 million from one related party, and cost of supply chain fees of $0.49 million which was primarily charged by a related party who assisted us with loan recommendation services. We did not incur such costs for the fiscal year 2018.
Cost associated with used car leasing business
The cost associated with used car leasing business mainly consisted of depreciation expenses on operating lease assets and car related expenses arising from lease of cars. The cost associated with used car leasing business was $1.54 million, as compared with $0.07 million for the fiscal year 2018, representing an increase of $1.47 million.
Our depreciation expenses increased from $0.07 million for the fiscal year 2018 to $0.30 million for the fiscal year 2019, representing an increase of $0.23 million, or 315%. The increase was a result of our continuous investment in used luxurious cars from 6 cars as of December 31, 2018 to 11 cars as of December 31, 2019.
We incurred car-related expenses of $1.07 million for the fiscal year 2019 as we launched sub-lease of luxurious car business through leasing cars from both third parties and one related party, over which we owned 40% equity interest. We had no car related expenses for the fiscal year 2018.
Selling, general, and administrative expenses
Selling, general and administrative expenses was $3.83 million for the fiscal year 2019, as compared with $2.47 million for the fiscal year 2018, representing an increase of $1.36 million, or 55%. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, business tax and surcharge, professional service fees, office supplies. The increase was mainly attributable to combined effects of an increase of salary and welfare expenses of $0.41 million as a result of increase of sales commissions to salespersons when we extended our car lease business to Shanghai and Chengdu market and when we started the commodity trading business in 2019, an increase of legal and consulting expenses of $0.76 million as a result of 1) issuance of 502,391 restricted shares as compensation to service providers, and 2) an increase in expenses incurred for the registered direct offerings in April and May 2019, including an increase of audit related fees of $0.16 million, an increase of commission of $0.1 million to a third party vendor for referral of underwriters.
Other expenses, net
Other expenses, net primarily consisted of impairment of investment securities of $200,000, impairment on investment in financial products of $1,000,000, and impairment on investment in two equity investees of $2,098,737 for the year ended December 31, 2019, as compared with interest expenses of $20,157 for the year ended December 31, 2018.
Net loss from continuing operations
Our net loss from continuing for the year ended December 31, 2019 was $6.94 million, representing an increase of $4.62 million, or 199% from net loss from continuing operations of $2.32 million for the year ended December 31, 2018.
Fiscal Year 2019 Cash Flows
As of December 31, 2019, the Company had cash and cash equivalents of $2.45 million, compared with $1.48 million as of December 31, 2018.
Net cash used in operating activities was $2.17 million for the fiscal year ended December 31, 2019, as compared with $0.09 million as of December 31, 2018.
Net cash used in investing activities was $8.87 million for the fiscal year ended December 31, 2019, compared to $3.27 million as of December 31, 2018.
Net cash provided by financing activities was $11.83 million for the fiscal year ended December 31, 2019, compared to $3.81 million as of December 31, 2018.
About TD Holdings, Inc.
TD Holdings, Inc. (Nasdaq: TD) (Formerly known as Bat Group, Inc.) is a used luxurious car rental and commodities trading service provider in China. The used luxurious car business is conducted under the brand name "BatCar" by the Company's VIE entity, Tianxing Kunlun Technology Co. Ltd, from its headquarters in Beijing. The commodities trading business is conducted under the brand name "Huamucheng" by the Company's VIE entity, Shenzhen Huamucheng Trading Co., Ltd. For more information please visit https://www.imbatcar.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. 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.
TD HOLDINGS, INC. (Formerly Bat Group, Inc.) CONSOLIDATED BALANCE SHEETS |
|||||
December 31, |
December 31, |
||||
2019 |
2018 |
||||
ASSETS |
|||||
Cash |
$ |
2,446,683 |
$ |
1,484,116 |
|
Loans receivable from third parties |
1,955,697 |
- |
|||
Due from related parties |
3,310,883 |
- |
|||
Other current assets |
166,617 |
87,922 |
|||
Total current assets |
7,879,880 |
1,572,038 |
|||
Investments in equity investees |
972,807 |
- |
|||
Deposit in investment in equity investee |
14,351 |
- |
|||
Loan receivable from a third party, noncurrent |
50,230 |
- |
|||
Property and equipment, net |
3,835 |
5,524 |
|||
Right-of-use lease assets, net |
41,188 |
- |
|||
Operating lease assets, net |
2,426,109 |
1,634,018 |
|||
Total noncurrent assets |
3,508,520 |
1,639,542 |
|||
Total Assets |
$ |
11,388,400 |
$ |
3,211,580 |
|
LIABILITIES AND EQUITY |
|||||
Liabilities |
|||||
Advances from customers |
$ |
15,249 |
$ |
6,208 |
|
Third party loans payable |
2,367,967 |
218,100 |
|||
Due to related parties |
1,017,362 |
- |
|||
Stock subscription advance |
1,600,000 |
- |
|||
Income tax payable |
14,735 |
- |
|||
Other current liabilities |
420,101 |
185,049 |
|||
Total current liabilities |
5,435,414 |
409,357 |
|||
Related party loan, noncurrent |
152,124 |
- |
|||
Total noncurrent liabilities |
152,124 |
- |
|||
Total Liabilities |
5,587,538 |
409,357 |
|||
Commitments and Contingencies |
|||||
Stockholders' Equity |
|||||
Series A Preferred Stock (par value $0.001 per share, 1,000,000 shares authorized at December 31, 2019 and 2018, respectively; nil shares issued and outstanding at December 31, 2019 and 2018, respectively) |
- |
- |
|||
Series B Preferred Stock (par value $0.001 per share, 5,000,000 shares authorized at December 31, 2019 and 2018, respectively; nil shares issued and outstanding at December 31, 2019 and 2018, respectively) |
- |
- |
|||
Common stock (par value $0.001 per share, 100,000,000 shares authorized; 11,585,111 and 5,023,906 shares issued and outstanding at December 31, 2019 and 2018, respectively)* |
11,585 |
5,024 |
|||
Additional paid-in capital |
38,523,170 |
28,765,346 |
|||
Accumulated deficit |
(32,391,040) |
(25,457,090) |
|||
Accumulated other comprehensive loss |
(334,281) |
(511,057) |
|||
Total TD Holdings, Inc.'s Stockholders' Equity |
5,809,434 |
2,802,223 |
|||
Non-controlling interest |
(8,572) |
- |
|||
Total Equity |
5,800,862 |
2,802,223 |
|||
Total Liabilities and Equity |
$ |
11,388,400 |
$ |
3,211,580 |
|
TD HOLDINGS, INC. (Formerly Bat Group, Inc.) CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME |
||||||
For the Years Ended |
||||||
2019 |
2018 |
|||||
Revenues |
||||||
Revenue from sales of commodity products |
$ |
100,427 |
$ |
- |
||
Revenue from supply chain management services (including loan recommendation service fee of $323,623 and distribution service fee of $238,963) |
562,586 |
- |
||||
Income from operating leases |
1,830,148 |
488,062 |
||||
Total Revenues |
2,493,161 |
488,062 |
||||
Operating costs |
||||||
Cost of revenue - commodity product sales - related party |
(100,180) |
- |
||||
Cost of revenue - supply chain management services - related party |
(489,231) |
- |
||||
Cost of operating lease |
(1,544,120) |
(71,252) |
||||
Total operating costs |
(2,133,531) |
(71,252) |
||||
Gross profit |
359,630 |
416,810 |
||||
Operating expenses |
||||||
Selling, general, and administrative expenses |
(3,828,412) |
(2,469,964) |
||||
Changes in fair value of noncurrent liabilities |
- |
(166,540) |
||||
Impairment of operating lease assets |
(148,143) |
(184,645) |
||||
Total operating expenses |
(3,976,555) |
(2,821,149) |
||||
Other expenses, net |
||||||
Interest expenses, net |
(657) |
(20,157) |
||||
Impairment of investment securities |
(200,000) |
- |
||||
Equity investment loss |
(11,342) |
- |
||||
Impairment of investment in financial products |
(1,000,000) |
- |
||||
Impairment of investment in equity investees |
(2,098,737) |
- |
||||
Total other expenses, net |
(3,310,736) |
(20,157) |
||||
Net loss from continuing operations before income taxes |
(6,927,661) |
(2,424,496) |
||||
Income tax (expenses) benefits |
(14,861) |
104,024 |
||||
Net loss from continuing operations |
(6,942,522) |
(2,320,472) |
||||
Net income from discontinued operations |
- |
9,967,629 |
||||
Net income (loss) |
(6,942,522) |
7,647,157 |
||||
Less: Net income (loss) attributable to non-controlling interests |
(8,572) |
- |
||||
Net income (loss) attributable to TD Holdings, Inc.'s Stockholders |
$ |
(6,933,950) |
$ |
7,647,157 |
||
Comprehensive income (loss) |
||||||
Net income (loss) |
$ |
(6,942,522) |
$ |
7,647,157 |
||
Foreign currency translation adjustment |
176,776 |
(5,329,710) |
||||
Reclassified to net income from discontinued operations |
- |
4,912,715 |
||||
Total comprehensive income (loss) |
(6,765,746) |
7,230,162 |
||||
Less: Total comprehensive loss attributable to non-controlling interests |
(8,572) |
- |
||||
Comprehensive income (loss) attributable to TD Holdings, Inc. |
$ |
(6,757,174) |
$ |
7,230,162 |
||
Income (loss)per share - basic and diluted |
$ |
(0.89) |
$ |
1.67 |
||
Net loss per share from continuing operations – basic and diluted |
$ |
(0.89) |
$ |
(0.50) |
||
Net income per share from discontinued operations – basic and diluted |
$ |
- |
$ |
2.17 |
||
Weighted Average Shares Outstanding-Basic and Diluted |
7,776,306 |
4,596,116 |
||||
TD HOLDINGS, INC. (Formerly Bat Group, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||
For the Years |
||||||
2019 |
2018 |
|||||
Cash Flows from Operating Activities: |
||||||
Net (loss) income |
$ |
(6,942,522) |
$ |
7,647,157 |
||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||
Depreciation of operating lease assets |
296,933 |
101,654 |
||||
Depreciation of property and equipment |
2,326 |
1,001 |
||||
Amortization of right of use assets |
60,128 |
- |
||||
Impairment on operating lease assets |
148,143 |
184,645 |
||||
(Gain) loss on disposal of operating lease asset |
(6,165) |
10,875 |
||||
Impairment on investment securities |
200,000 |
- |
||||
Equity investment loss |
11,342 |
- |
||||
Impairment on investment in financial products |
1,000,000 |
|||||
Impairment on investment in equity investees |
2,098,737 |
- |
||||
Stock-based compensation to service providers |
884,208 |
- |
||||
Gain on disposal of discontinued operations |
- |
(9,967,629) |
||||
Income tax benefits from intra-period tax allocation |
- |
(105,000) |
||||
Changes in fair value of noncurrent liabilities |
- |
166,540 |
||||
Changes in operating assets and liabilities: |
||||||
Other current assets |
(80,202) |
(91,395) |
||||
Advances from customers |
9,198 |
6,454 |
||||
Income tax payable |
14,861 |
- |
||||
Other current liabilities |
239,050 |
189,100 |
||||
Lease liabilities |
(101,669) |
- |
||||
Net cash provided by operating activities from discontinued operations |
- |
1,769,566 |
||||
Net Cash Used in Operating Activities |
(2,165,632) |
(87,032) |
||||
Cash Flows from Investing Activities: |
||||||
Purchases of property and equipment |
(695) |
(6,743) |
||||
Purchases of operating lease assets |
(2,065,453) |
(2,117,477) |
||||
Proceeds from disposal of operating lease assets |
332,909 |
121,752 |
||||
Investment in one investment security |
(200,000) |
- |
||||
Investments in equity investees |
(868,458) |
- |
||||
Deposit for investment in an equity investee |
(14,474) |
- |
||||
Investments in financial products |
(1,000,000) |
- |
||||
Payment made on loan to related parties |
(2,865,879) |
- |
||||
Payment made on loans to third parties |
(2,191,866) |
- |
||||
Proceeds from disposal of discontinued operations |
- |
500,000 |
||||
Cash paid in connection with discontinued operations |
- |
(499,496) |
||||
Net cash used in investing activities from discontinued operations |
- |
(1,270,070) |
||||
Net Cash Used in by Investing Activities |
(8,873,916) |
(3,272,034) |
||||
Cash Flows from Financing Activities: |
||||||
Proceeds from third party borrowings |
2,695,545 |
226,713 |
||||
Repayments of borrowings to third parties |
(289,486) |
- |
||||
Proceeds from borrowings from related parties |
1,162,719 |
- |
||||
Stock subscription advance received from shareholders |
1,600,000 |
|||||
Proceeds from registered direct offering, net of transaction costs |
4,653,440 |
- |
||||
Proceeds from issuance of common stock under private placement transactions |
589,750 |
3,265,370 |
||||
Capital contribution from shareholders of a variable interest entity |
1,417,736 |
- |
||||
Proceeds from convertible promissory notes |
- |
314,352 |
||||
Net Cash Provided by Financing Activities |
11,829,704 |
3,806,435 |
||||
Effect of Exchange Rate Changes on Cash |
172,411 |
(322,883) |
||||
Net Increase in Cash |
962,567 |
124,486 |
||||
Cash, Beginning of Year |
1,484,116 |
1,359,630 |
||||
Cash, End of Year |
$ |
2,446,683 |
$ |
1,484,116 |
||
Supplemental disclosure of cash flow information |
||||||
Cash paid for interest expenses |
$ |
41,053 |
$ |
- |
||
Cash paid for income tax expenses |
$ |
- |
$ |
- |
||
Supplemental disclosure of Non-cash investing and financing activities |
||||||
Issuance of common stocks in exchange of investments in one equity investee |
$ |
410,000 |
$ |
- |
||
Right-of-use assets obtained in exchange for operating lease obligations |
$ |
61,648 |
$ |
- |
||
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