TD Holdings, Inc. Reports Fiscal Year 2021 Financial Results

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    SHENZHEN, China, March 17, 2022 /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, 2021.

    Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, “We delivered exceptional business results for the year ended December 31, 2021, driven by continued execution of our strategy and our demonstrated ability to manage challenges brought by COVID-19 epidemic. For the year ended December 31, 2021, our revenue increased by 612% to $201.13 million and net loss narrowed down by 84% to $0.94 million, compared with $28.27 million and $5.95 million for the year ended December 31, 2020. The results give us the confidence to reach operating break-even or even profitable soon and we are delighted to see that we are moving in that direction.”

    Ms. Renmei Ouyang continued, “For the year ended December 31, 2021, we accomplished several key milestones across the entire organization, building a stronger foundation for ongoing success. Looking forward, we intend to continue driving growth in our business by leveraging our market leadership and investing to capitalize on robust demand dynamics. We will keep exploring our business opportunities in the markets of global gold spot trading, digital cloud warehouse as well as lightweight new materials. We believe that our unique market position and visionary growth strategy allow us to increase return of capital to our shareholders.”

    Fiscal Year 2021 Financial Highlights

    • Revenue from commodities trading business was $201.13 million, consisting of $197.95 million from sales of commodities products, and $3.18 million from supply chain management services, compared with $28.27 million for the year ended December 31, 2020, representing an increase of $172.87 million or 612%.
    • Net loss from continuing operations was $0.94 million, compared with net loss from continuing operations of $2.40 million for the year ended December 31, 2020.
    • Basic and diluted loss per share from continuing operations was $0.01, compared with basic and diluted loss per share from continuing operations of $0.05 for the year ended December 31, 2020.

    Fiscal Year 2021 Financial Results

    Revenues

    For the year ended December 31, 2021, the Company sold non-ferrous metals to twenty-four third party customers and three related party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $173.90 million and $24.05 million, respectively, from sales of commodity products to twenty-four third party customers and three related party customers, compared with $8.25 million and $16.24 million, respectively, for the year ended December 31, 2020.

    For the year ended December 31, 2021, the Company earned commodity distribution commission fees of $3.18 million from third party vendors compared with commission fees of $1.63 million from seven third party customers and distribution service fees of $2.14 million from three related party customers for the year ended December 31, 2020.

    Cost of revenue

    Our 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 increased by $173.49 million, or 704% to $198.13 million for the year ended December 31, 2021, from $24.64 million for the year ended December 31, 2020, primarily due to an increase of $173.44 million in cost of revenue associated with commodity product sales. The cost of revenue increased in line with the increased sales.

    Selling, general, and administrative expenses 

    Selling, general and administrative expenses increased by $5.10 million, or 168%, to $8.14 million for the year ended December 31, 2021, from $3.04 million for the year ended December 31, 2020. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, 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 $3.93 million, and (2) amortization of convertible promissory notes of $0.49 million for the year ended December 31, 2021 while no such issuance for the year ended December 31, 2020.

    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 $1.70 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 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.

    For the year ended December 31, 2020, no such expenses incurred.

    Interest income

    Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $3.84 million, or 62%, to $10.08 million for the year ended December 31, 2021, from $6.24 million for the year ended December 31, 2020. The increase was primarily due to loans made to Yunfeihu for the year ended December 31, 2021. For the year ended December 31, 2021, $4.12 million was attributed to related party and $5.94 million was generated from third party vendors.

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

    For the year ended December 31, 2021, there was amortization of beneficial conversion feature of $1.46 million of the three convertible promissory notes issued on January 6, 2021, on March 4, 2021 and on October 4, 2021.

    For the year ended December 31, 2020, there was full amortization of beneficial conversion feature of $3.40 million and amortization of relative fair value of warrants of $3.06 million relating to the convertible promissory notes which was exercised in May 2020.

    Net loss from continuing operations

    Net loss from continuing for the year ended December 31, 2021 was $0.94 million, compared with net loss from continuing operations of $2.40 million for the year ended December 31, 2020.

    Net loss

    Net loss for the year ended December 31, 2021 was $0.94 million, compared with net loss of $5.95 million for the year ended December 31, 2020.

    For the Year Ended December 31, 2021 Cash Flows

    As of December 31, 2021, the Company had cash and cash equivalents of $4.31 million, compared with $2.70 million as of December 31, 2020.

    Net cash provided by operating activities was $8.03 million for the year ended December 31, 2021, compared with $29.86 million as of December 31, 2020.

    Net cash used in investing activities was $71.52 million for the year ended December 31, 2021, compared with $132.58 million as of December 31, 2020.

    Net cash provided by financing activities was $64.12 million for the year ended December 31, 2021, compared with $106.15 million as of December 31, 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 epidemic 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, 2021 and 2020

    December 31,

    December 31,

    2021

    2020

    ASSETS

    Current Assets

    Cash and cash equivalents

    $

    4,311,068

    $

    2,700,013

    Loans receivable from third parties

    115,301,319

    18,432,691

    Due from related parties

    11,358,373

    55,839,045

    Other current assets

    3,288,003

    1,310,562

    Total current assets

    134,258,763

    78,282,311

    Non-Current Assets

    Plant and equipment, net

    2,872

    –

    Goodwill

    71,028,283

    69,322,325

    Intangible assets, net

    21,257,337

    19,573,846

    Right-of-use assets, net

    888,978

    –

    Total non-current assets

    93,177,470

    88,896,171

    Total Assets

    $

    227,436,233

    $

    167,178,482

    LIABILITIES AND EQUITY

    Current Liabilities

    Accounts payable

    $

    3,337,758

    $

    –

    Bank borrowings

    1,129,288

    1,653,247

    Third party loans payable

    476,779

    –

    Advances from customers

    5,221,874

    9,214,369

    Due to related parties

    21,174

    7,346,021

    Income tax payable

    8,441,531

    5,460,631

    Lease liabilities

    310,665

    –

    Other current liabilities

    4,297,793

    3,197,147

    Acquisition payable

    –

    15,384,380

    Convertible promissory notes

    3,562,158

    –

    Total current liabilities

    26,799,020

    42,255,795

    Non-Current Liabilities

    Deferred tax liabilities

    4,178,238

    4,893,461

    Lease liabilities

    586,620

    –

    Total non-current liabilities

    4,764,858

    4,893,461

    Total liabilities

    31,563,878

    47,149,256

    Commitments and Contingencies (Note 16)

    Equity

    Common stock (par value $0.001 per share, 600,000,000 shares
    authorized; 138,174,150 and 79,131,207 shares issued and outstanding
    at December 31, 2021 and 2020, respectively)

    138,174

    79,131

    Additional paid-in capital

    224,790,409

    151,407,253

    Statutory surplus reserve

    1,477,768

    913,292

    Accumulated deficit

    (42,200,603)

    (39,255,945)

    Accumulated other comprehensive income

    11,666,607

    6,885,495

    Total TD Shareholders’ Equity

    195,872,355

    120,029,226

    Total Equity

    195,872,355

    120,029,226

    Total Liabilities and Equity

    $

    227,436,233

    $

    167,178,482

    TD HOLDINGS, INC.

    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
    For the Years Ended December 31, 2021 and 2020
    (Expressed in U.S. dollars, except for the number of shares)

    For the Years Ended

    December 31,

    2021

    2020

    Revenues

    Sales of commodity products – third parties

    $

    173,904,016

    $

    8,252,866

    Sales of commodity products – related parties

    24,049,999

    16,243,777

    Supply chain management services – third parties

    3,180,227

    1,631,318

    Supply chain management services – related parties

    –

    2,140,840

    Total Revenues

    201,134,242

    28,268,801

    Cost of revenues

    Commodity product sales – third parties

    (173,996,000)

    (7,853,215)

    Commodity product sales – related parties

    (24,045,511)

    (16,744,094)

    Supply chain management services – third parties

    (84,118)

    (43,162)

    Total operating costs

    (198,125,629)

    (24,640,471)

    Gross profit

    3,008,613

    3,628,330

    Operating expenses

    Selling, general, and administrative expenses

    (8,137,481)

    (3,035,598)

    Share-based payment for service

    (1,836,442)

    –

    Total operating expenses

    (9,973,923)

    (3,035,598)

    Other income (expenses), net

    Interest income

    10,079,776

    6,239,943

    Interest expenses

    (313,965)

    (185,106)

    Amortization of beneficial conversion feature relating to issuance
    of convertible promissory notes

    (1,463,883)

    (3,400,000)

    Amortization of relative fair value of warrants relating to issuance
    of convertible promissory notes

    –

    (3,060,000)

    Impairment of investment in an equity investee

    –

    (410,000)

    Other income (expense), net

    (285,774)

    –

    Total other income (expenses), net

    8,016,154

    (815,163)

    Net income(loss) from continuing operations before income taxes

    1,050,844

    (222,431)

    Income tax expenses

    (1,991,201)

    (2,177,924)

    Net loss from continuing operations

    (940,357)

    (2,400,355)

    Net loss from discontinued operations, net of tax

    –

    (3,551,258)

    Net loss

    (940,357)

    (5,951,613)

    Net loss attributable to TD Holdings, Inc.’s Stockholders

    $

    (940,357)

    $

    (5,951,613)

    Other comprehensive income

    Net loss

    $

    (940,357)

    $

    (5,951,613)

    Foreign currency translation adjustment

    4,781,112

    7,219,776

    Comprehensive income

    3,840,755

    1,268,163

    Weighted Average Shares Outstanding-Basic

    107,417,633

    51,273,048

    Weighted Average Shares Outstanding- Diluted

    121,099,328

    51,273,048

    (loss) per share- basic

    $

    (0.01)

    $

    (0.12)

    (loss) per share- diluted

    $

    (0.01)

    $

    (0.12)

    (loss) per share continuing – basic and diluted

    $

    (0.01)

    $

    (0.05)

    Income (loss) per share discontinued – basic and diluted

    $

    –

    $

    (0.07)

    TD HOLDINGS, INC.

    CONSOLIDATED STATEMENTS OF CASH FLOWS
    For the Years Ended December 31, 2021 and 2020
    (Expressed in U.S. dollar)

    For the Years Ended

    December 31,

    2021

    2020

    Cash Flows from Operating Activities:

    Net loss

    $

    (940,357)

    $

    (5,951,613)

    Less: Net loss from discontinued operations

    –

    3,551,258

    Net loss from continuing operations

    (940,357)

    (2,400,355)

    Adjustments to reconcile net loss to net cash provided by (used in)
    operating activities:

    Depreciation of plant and equipment

    622

    –

    Impairment of right of use assets

    –

    176,225

    Amortization of right-of-use lease assets

    45,309

    –

    Amortization of intangible assets

    3,927,961

    514,618

    Amortization of beneficial conversion feature of convertible
    promissory notes

    489,000

    –

    Interest expense for convertible promissory notes

    417,784

    –

    Stock-based compensation to senior management

    –

    37,899

    Share-based payment for service

    1,836,442

    –

    Standstill fee relating to convertible promissory notes

    356,934

    –

    Amortization of beneficial conversion feature relating to issuance
    of convertible promissory notes

    1,463,883

    3,400,000

    Amortization of relative fair value of warrants relating to issuance
    of convertible promissory notes

    –

    3,060,000

    Impairment on investment securities

    –

    –

    Impairment of equity investments

    –

    410,000

    Deferred tax liabilities

    (825,945)

    (135,930)

    Changes in operating assets and liabilities, (net of assets and
    liabilities acquired and disposed):

    Other current assets

    5,558,942

    (776,626)

    Inventories

    –

    403,471

    Prepayments

    –

    13,317,930

    Due from related parties

    (496,242)

    (4,327,269)

    Advances from customers

    (4,170,261)

    6,692,708

    Due from third parties

    (2,619,091)

    5,321,874

    Income tax payable

    2,808,268

    2,313,853

    Due to related parties

    (5,516,085)

    –

    Accounts payable

    3,299,002

    –

    Other current liabilities

    1,039,735

    2,148,993

    Lease liabilities

    886,866

    (176,225)

    Due to third party loans payable

    471,243

    –

    Net cash provided by operating activities from continuing operations

    8,034,010

    29,981,166

    Net cash used in operating activities from discontinued operations

    –

    (125,133)

    Net cash provided by operating activities

    8,034,010

    29,856,033

    Cash Flows from Investing Activities:

    Purchases of intangible assets

    (5,115,803)

    –

    Purchases of plant and equipment

    (3,469)

    –

    Purchases of operating lease assets

    (923,964)

    –

    Investment in subsidiary, net of cash acquired

    (15,579,946)

    (82,227,328)

    Payment made on loan to related parties

    –

    (47,114,208)

    Payment made on loans to third parties

    (108,800,053)

    (173,673,614)

    Collection of loans from third parties

    13,504,542

    170,432,603

    Collection of loans from related parties

    45,397,738

    –

    Net cash used in investing activities from continuing operations

    (71,520,955)

    (132,582,547)

    Net cash used in investing activities from discontinued operations

    –

    –

    Net cash used in investing activities

    (71,520,955)

    (132,582,547)

    Cash Flows from Financing Activities:

    Repayments made on loans to third parties

    (558,088)

    (318,748)

    Repayment made on loans to related parties

    (1,901,724)

    –

    Proceeds from borrowings from related parties

    –

    1,613,696

    Proceeds from issuance of common stock under ATM transaction

    2,192,989

    –

    Proceeds from registered direct offering, net of transaction costs

    –

    20,000,000

    Proceeds from issuance of common stock under private placement transactions

    57,877,941

    18,500,000

    Proceeds from issuance of convertible promissory notes

    6,500,000

    30,000,000

    Proceeds from exercise of warrants

    7,500

    36,353,731

    Net cash provided by financing activities from continuing operations

    64,118,618

    106,148,679

    Net cash provided by financing activities from discontinued operations

    –

    –

    Net cash provided by financing activities

    64,118,618

    106,148,679

    Effect of Exchange Rate Changes on Cash

    979,382

    (2,499,428)

    Net Increase in Cash

    1,611,055

    922,737

    Cash, Beginning of Year

    2,700,013

    1,777,276

    Cash, End of Year

    $

    4,311,068

    $

    2,700,013

    Less: Cash from discontinued operations

    –

    –

    Cash from continuing operations

    $

    4,311,068

    $

    2,700,013

    Cash paid for interest expense

    $

    92,062

    $

    18,073

    Cash paid for income taxes

    $

    75,416

    $

    –

    Supplemental disclosure of non-cash investing and financing activities

    Right-of-use assets obtained in exchange for operating lease obligations

    $

    –

    $

    186,191

    Issuance of common stocks in connection with private placements, net of issuance costs with proceeds collected in advance in November 2019

    $

    –

    $

    1,600,000

    Issuance of common stocks in connection with conversion of convertible promissory notes

    $

    –

    $

    30,000,000

    Issuance of common stocks in connection with cashless exercise of 962,022 warrants

    $

    –

    $

    1,269,869

    Fair value of HC High Summit assets disposed

    $

    –

    $

    5,320,768

    HC High Summit liabilities derecognized

    $

    –

    $

    (2,606,257)

    Issuance of common stocks in exchange of investments in one equity investee

    $

    1,439,826

    $

    –

    Cision View original content:https://www.prnewswire.com/news-releases/td-holdings-inc-reports-fiscal-year-2021-financial-results-301504403.html

    Source: TD Holdings, Inc.

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