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
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 |
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 |
(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 |
- |
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 |
||||||||
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 |
$ |
4,730,150 |
$ |
- |
||||
Issuance of common stocks in exchange of investments in one equity investee |
$ |
- |
$ |
1,439,826 |
||||