TD Holdings, Inc. Reports Third Quarter 2021 Financial Results

Revenue up 697% Year-over-year

SHENZHEN, China, Nov. 15, 2021 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company"), a commodities trading service provider in China, today announced its financial results for the third quarter ended September 30, 2021.

Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "We are pleased to report our financial results for the third quarter of fiscal year 2021. Our revenue increased by 697% to $54.77 million for the third quarter of fiscal year 2021 as compared to the same quarter of last year. During the third quarter, we have entered into a new strategic alliance with Jinyibao International Technology Company Limited to step into the global gold spot trading market, which is expected to enrich our commodity trading platforms, expand the scale of the platforms, and open up a new profit growth point. We have also established a partnership with Guangzhou Wensheng Blockchain Technology Co., Ltd. to target the tremendous market potential of blockchain in the supply chain financing and digital cloud warehouse business. In addition, we have entered into strategic cooperation with Guangdong Enterprise Investment Promotion Association to develop our lightweight new materials business. Looking forward, we believe these moves will allow us to execute our lead strategy and effectively drive long-term growth."

Financial Highlights

In the quarter ended September 30, 2021

• Revenue from commodities trading business was $54.77 million, consisting of $52.73 million from sales of commodities products, and $2.04 million from supply chain management services for the quarter ended September 30, 2021, an increase of 697% from $6.87 million for the same quarter ended September 30, 2020.
  
  
• Net income from continuing operation was $0.46 million, as compared with $3.54 million for the same quarter ended September 30, 2020. Net income was $0.46 million, as compared with $0.55 million for the same quarter ended September 30, 2020.
  
  
• Basic and diluted earnings per share from continuing operations was $nil, compared with $0.06 for the same quarter ended September 30, 2020. Basic and diluted earnings per share was $nil, compared with $0.01 for the same period ended September 30, 2020.

In the nine months ended September 30, 2021

• Revenue from commodities trading business was $144.20 million, consisting of $141.68 million from sales of commodities products, and $2.52 million from supply chain management services for the nine months ended September 30, 2021, an increase of 1339% from $10.02 million for the same period ended September 30, 2020.
  
  
• Net loss from continuing operation was $0.72 million, as compared with $1.73 million for the same period ended September 30, 2020. Net loss was $0.72 million, as compared with $5.27 million for the same period ended September 30, 2020.
  
  
• Basic and diluted loss per share from continuing operations was $0.01, compared with $0.03 for the same period ended September 30, 2020. Basic and diluted loss per share was $0.01, compared with $0.12 for the same period ended September 30, 2020.

Financial Results

In the three months ended September 30, 2021

Revenues

For the three months ended September 30, 2021, the Company sold non-ferrous metals to twelve customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $52.73 million from sales of commodity products for the three months ended September 30, 2021, among which, $1.37 million generated from the related party, compared with $0.96 million from sales of commodity products for the three months ended September 30, 2020.

For the three months ended September 30, 2021, the Company earned commodity distribution commission fees of $2.04 million from twenty-two third-party customers and the Company earned commodity distribution commission fees of $1.15 million and $2.04 million from facilitating such sales transactions with three third party customers and three related party customers for the three months ended September 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the three months ended September 30, 2021, the Company purchased non-ferrous metal products of $51.36 million from eleven third party vendors and $1.43 million from one related party vendors, compared with $3.61 million from two related party vendors for the three months ended September 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $1.93 million or 622%, to $2.23 million for the three months ended September 30, 2021, from $0.29 million for the three months ended September 30, 2020. 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 amortization of intangible assets of $1.01 million and amortization of convertible notes of $0.19 million for the three months ended September 30,2021 while no such issuance for the three months ended September 30, 2020. 

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income decreased by $0.03 million or 1%, to $1.81 million for the three months ended September 30, 2021, from $1.84 million for the three months ended September 30, 2020.

Net income from continuing operations

Net income from continuing operations was $0.46 million for the three months ended September 30, 2021, compared with $3.54 million for the three months ended September 30, 2020.

Net income

Net income was $0.46 million for the three months ended September 30, 2021, compared with $0.55 million for the three months ended September 30, 2020.

In the nine months ended September 30, 2021

Revenues

For the nine months ended September 30, 2021, the Company sold non-ferrous metals to three related party customers and twenty-one third party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $141.68 million from sales of commodity products for the nine months ended September 30, 2021, compared with $6.30 million for the nine months ended September 30, 2020.

For the nine months ended September 30, 2021, the Company earned commodity distribution commission fees of $2.52 million from third party vendors, compared with commission fees of $2.11 million from six third party customers and distribution service fees of $1.61 million from three related party customer for the nine months ended September 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the nine months ended September 30, 2021, the Company purchased non-ferrous metal products of $118.32 million from twenty-one third party vendors and $23.35 million from eight related party vendors, compared with $1.46 million from one third party vendor and $4.87 million from three related party vendors for the nine months ended September 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $4.82 million or 467%, to $5.85 million for the nine months ended September 30, 2021, from $1.03 million for the nine months ended September 30, 2020. 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 amortization of intangible assets of $2.91 million and amortization of convertible notes of $0.35 million for the nine months ended September 30, 2021 while no such issuance for the three months ended September 30, 2020. 

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $3.12 million or 83%, to $6.85 million for the nine months ended September 30, 2021, from $3.74 million for the nine months ended September 30, 2020. The increase was primarily due to loans made to Yunfeihu for the three months ended September 30, 2021, for the nine months ended September 30, 2021, $3.80 million was attributed to related party and $3.06 million was generated from third party vendors.

Share-based payment for service

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 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 5 years, and volatility of 71.57% for the nine months ended September 30, 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.

For the nine months ended September 30, 2020, no such expenses incurred.

Amortization of beneficial conversion feature and relative fair value of warrants relating to issuance of convertible notes  

For the nine months ended September 30, 2021, the item represented the amortization of beneficial conversion feature of $619,025 of the two convertible notes issued on January 6, 2021 and on March 4, 2021.

For the nine months ended September 30, 2020, the item represented the full amortization of beneficial conversion feature of $3.4 million and amortization of relative fair value of warrants of $3.06 million relating to the convertible notes which was exercised in May 2020.

Net loss from continuing operations

Net loss from continuing operations was $0.72 million for the nine months ended September 30, 2021, compared with $1.73 million for the nine months ended September 30, 2020.

Net loss

Net loss from was $0.72 million for the nine months ended September 30, 2021, compared with $5.27 million for the nine months ended September 30, 2020.

Nine months Ended September 30, 2021 Cash Flows

As of September 30, 2021, the Company had cash and cash equivalents of $4.29 million, as compared with $2.70 million as of December 31, 2020.

Net cash provided by operating activities from continuing operations was $0.94 million for the nine months ended September 30, 2021, compared with $3.07 million for the nine months ended September 30, 2020. Net cash provided by operating activities was $0.94 million for the nine months ended September 30, 2021, compared with $2.37 million for the nine months ended September 30, 2020.

Net cash used in investing activities was $62.21 million for the nine months ended September 30, 2021, compared with $83.14 million for the nine months ended September 30, 2020.

Net cash provided by financing activities was $62.13 million for the nine months ended September 30, 2021, compared with $81.05 million the nine months ended September 30, 2020.

About TD Holdings, Inc.

TD Holdings, Inc. is a service provider currently engaging in commodity 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

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