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Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

TD Holdings, Inc. Reports Second Quarter 2022 Financial Results


SHENZHEN, China, Aug. 9, 2022 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company"), a commodities trading service provider in China, today announced its financial results for the second quarter ended June 30, 2022.

Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "We made tremendous progress in growing and enhancing our business during the second quarter of fiscal year 2022, despite the many challenges presented by the resurgence of the COVID-19 pandemic. We continued to see increased demand for our services, highlighting the breadth and resilience of our business model against a challenging macro environment. To achieve the growth potential of our business, we will continue to expand our business by executing strategic initiatives, exploring growth opportunities, and providing high-quality products and services to our customers. We remain focused on providing invaluable services and support to best serve the demand of our customers. Specifically, we will continue to make progress and work toward on our strategic expansion, including expanding sales channels, growing our customer base, and keeping explore growth opportunities in the global gold spot trading market, digital cloud warehouse market and lightweight new materials market. In addition to our strategic expansion, we aim to manage expenses prudently and improve operating efficiency. We believe these initiatives will support us to generate new business growth and build momentum toward our growth objectives. As we look ahead to the fiscal year 2022 and beyond, we will strive to expand our capabilities to serve our customers, grow our business, and provide higher returns to our shareholders."

Financial Highlights

In the quarter ended June 30, 2022

In the six months ended June 30, 2022

Financial Results

In the three months ended June 30, 2022

Revenues

For the three months ended June 30, 2022, the Company sold non-ferrous metals to 22 customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $53.11 million from sales of commodity products for the three months ended June 30, 2022, compared with $59.51 million from sales of commodity products for the three months ended June 30, 2021, among which, $1.52 million was generated from the related party.

For the three months ended June 30, 2022, the Company earned revenue of $0.57 million from supply chain management services to third-party customers, compared with $0.33 million to third-party customers for the three months ended June 30, 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 $6.22 million, or 10% to $53.24 million for the three months ended June 30, 2022, from $59.47 million for the three months ended June 30, 2021, primarily due to a decrease of $4.68 million in cost of revenue associated with commodity product sales from the third party. The decreased cost of revenue is in line with the decrease in revenue.

Selling, general, and administrative expenses

Selling, general and administrative expenses decreased by $0.18 million or 9%, to $1.88 million for the three months ended June 30, 2022, from $2.05 million for the three months ended June 30, 2021. 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. There is no big decrease for the three months ended June 30, 2022 compared with the three months ended June 30, 2021. 

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $1.42 million or 48%, to $4.37 million for the three months ended June 30, 2022, from $2.95 million for the three months ended June 30, 2021. The increase was full due to loans made to third-party vendors for the three months ended June 30, 2022.

Amortization of relative fair value of warrants relating to service provider  

For the three months ended June 30, 2022, the item represented the amortization of beneficial conversion feature of $0.32 million and relating to the convertible promissory notes.

For the three months ended June 30, 2021, no such expenses incurred.

Net income

Net income was $1.43 million for the three months ended June 30, 2022, compared with $0.36 million for the three months ended June 30, 2021.

In the six months ended June 30, 2022

Revenues

For the six months ended June 30, 2022, the Company sold non-ferrous metals to 22 third-party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $100.69 million from sales of commodity products for the six months ended June 30, 2022, compared with $88.95 million for the six months ended June 30, 2021.

For the six months ended June 30, 2022, the Company earned commodity distribution commission fees of $1.15 million from 16 third-party vendors, compared with commission fees of $0.47 million from third-party vendors for the six months ended June 30, 2021.

Cost of revenue

Cost of revenue primarily includes cost of revenue associated with commodity product sales, cost of revenue associated with management services of supply chain. Total cost of revenue increased by $11.96 million, or 13% to $100.85 million for the six months ended June 30, 2022, from $88.89 million for the six months ended June 30, 2021, primarily due to an increase of $11.96 million in cost of revenue associated with commodity product sales. The increased cost of revenue is in line with the increase in sales volume.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $0.50 million or 14%, to $4.12 million for the six months ended June 30, 2022, from $3.62 million for the six months ended June 30, 2021. 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) salary and employee benefits increased by $0.62 million and, 2) amortization of convertible promissory notes increased by $0.22 million

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $3.71 million or 74%, to $8.76 million for the six months ended June 30, 2022, from $5.05 million for the six months ended June 30, 2021. The increase was primarily due to loans made to third-party vendor customers, among which, $0.70 million was attributed to related parties and $8.05 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 six months ended June 30, 2021.

For the six months ended June 30, 2022, no such expenses incurred.

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

For the six months ended June 30, 2022, the item represented the amortization of beneficial conversion feature of $0.53 million relating to the convertible promissory notes.

For the six months ended June 30, 2021, no such expenses incurred.

Net income (loss)

Net income was $3.02 million for the six months ended June 30, 2022, compared with net loss of $1.18 million for the six months ended June 30, 2021.

Six Months Ended June 30, 2022 Cash Flows

As of June 30, 2022, the Company had cash and cash equivalents of $3.93 million, as compared with $4.31 million as of December 31, 2021.

Net cash provided by operating activities was $0.47 million for the six months ended June 30, 2022, compared with net cash used in operating activities of $3.79 million for the six months ended June 30, 2021.

Net cash used in investing activities was $60.10 million for the six months ended June 30, 2022, compared with $15.81 million for the six months ended June 30, 2021.

Net cash provided by financing activities was $59.92 million for the six months ended June 30, 2022, compared with $23.10 million for the six months ended June 30, 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. 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.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2022 and December 31, 2021

(Expressed in U.S. dollars, except for the number of shares)






June 30,



December 31,




2022



2021


ASSETS







Current Assets







Cash and cash equivalents


$

3,925,416



$

4,311,068


Loans receivable from third parties



177,575,850




115,301,319


Accounts receivable



2,997




-


Prepayments



218




-


Due from related parties



-




11,358,373


Other current assets



5,148,250




3,288,003


Inventories



1,505,869




-


Total current assets



188,158,600




134,258,763











Non-Current Assets









Plant and equipment, net



3,809




2,872


Goodwill



67,475,493




71,028,283


Intangible assets, net



18,246,404




21,257,337


Right-of-use assets, net



737,385




888,978


Total non-current assets



86,463,091




93,177,470











Total Assets


$

274,621,691



$

227,436,233











LIABILITIES AND EQUITY









Current Liabilities









Accounts payable


$

3,058,260



$

3,337,758


Bank borrowings



1,072,802




1,129,288


Third party loans payable



465,344




476,779


Contract liabilities



5,184




5,221,874


Due to related parties



-




21,174


Income tax payable



10,068,891




8,441,531


Lease liabilities



316,978




310,665


Other current liabilities



4,864,492




4,297,793


Convertible promissory notes



4,397,325




3,562,158


Total current liabilities



24,249,276




26,799,020











Non-Current Liabilities









Deferred tax liabilities



3,572,320




4,178,238


Lease liabilities



435,842




586,620


Total non-current liabilities



4,008,162




4,764,858











Total liabilities



28,257,438




31,563,878











Commitments and Contingencies (Note 16)


















Equity









Common stock (par value $0.001 per share, 600,000,000 shares authorized;
   273,680,088 and 138,174,150 shares issued and outstanding as of June 30, 2022
   and December 31, 2021, respectively)



273,680




138,174


Additional paid-in capital



284,805,054




224,790,409


Statutory surplus reserve



1,477,768




1,477,768


Accumulated deficit



(39,181,475)




(42,200,603)


Accumulated other comprehensive (loss)/income



(1,010,774)




11,666,607


Total Equity



246,364,253




195,872,355











Total Liabilities and Equity


$

274,621,691



$

227,436,233


 

 

 

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)

(Expressed in U.S. dollars, except for the number of shares)






For the Three Months
Ended
June 30,



For the Six Months Ended
June 30,




2022



2021



2022



2021















   Revenues













      - Sales of commodity products ? third parties


$

53,108,294



$

57,989,381



$

100,692,259



$

67,022,848


      - Sales of commodity products ? related parties



-




1,523,616




-




21,926,631


      - Supply chain management services ? third            
      parties



575,101




326,650




1,150,252




472,425


   Total Revenue



53,683,395




59,839,647




101,842,511




89,421,904



















Cost of revenue

















      - Commodity product sales-third parties



(53,250,178)




(57,932,603)




(100,840,754)




(66,965,015)


      - Commodity product sales-related parties



-




(1,531,336)




-




(21,917,517)


      - Supply chain management services ? third            
     parties



5,912




(2,592)




(5,690)




(3,642)


     Total cost of revenue



(53,244,266)




(59,466,531)




(100,846,444)




(88,886,174)



















Gross profit



439,129




373,116




996,067




535,730



















Operating expenses

















      Selling, general, and administrative expenses



(1,875,779)




(2,054,354)




(4,123,486)




(3,624,733)


      Share-based payment for service



-




-




-




(1,695,042)


      Total operating expenses



(1,875,779)




(2,054,354)




(4,123,486)




(5,319,775)



















Other income (expenses), net

















      Interest income



4,366,318




2,946,236




8,756,659




5,045,093


      Interest expenses



(129,116)




(155,825)




(239,442)




(283,248)


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



(320,291)




-




(533,658)




-


      Other income (expenses), net



(221,953)




(379,924)




(126,244)




(386,358)


      Total other income, net



3,694,958




2,410,487




7,857,315




4,375,487



















Net income (loss) before income taxes



2,258,308




729,249




4,729,896




(408,558)



















      Income tax expenses



(833,037)




(371,393)




(1,710,768)




(771,862)



















Net income (loss)


$

1,425,271



$

357,856



$

3,019,128



$

(1,180,420)



















Comprehensive Income (Loss)

















      Net income (loss)


$

1,425,271



$

357,856



$

3,019,128



$

(1,180,420)


      Foreign currency translation adjustments



(13,558,577)




2,706,148




(12,677,381)




2,062,570


Comprehensive income (loss)


$

(12,133,306)



$

3,064,004



$

(9,658,253)



$

882,150



















Income (Loss) per share - basic and diluted

















      Income (loss) per share ? Basic


$

0.01



$

0.00



$

0.01



$

(0.01)


      Income (loss) per share ? Diluted


$

0.01



$

0.00



$

0.01



$

(0.01)



















Weighted Average Shares Outstanding-Basic



213,595,841




96,821,039




206,060,364




95,025,014



















Weighted Average Shares Outstanding-Diluted



242,849,487




102,312,155




235,314,010




100,516,130


 

 

 

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollar)






For the Six Months Ended
June 30,




2022



2021


Cash Flows from Operating Activities:







Net income(loss)


$

3,019,128



$

(1,180,420)


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









Amortization of intangible assets



2,016,116




1,895,871


Depreciation of plant and equipment



3,851




130


Amortization of discount on convertible promissory notes



219,333




163,333


Amortization of right of use assets



170,084




-


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



533,658




-


Monitoring fee relating to convertible promissory notes



105,760




-


Share-based payment for service



-




1,695,042


Standstill fee relating to convertible promissory notes



-




356,934


Interest expense for convertible promissory notes



206,567




199,093


Deferred tax liabilities



(410,877)




(411,736)


Changes in operating assets and liabilities:









Other current assets



37,371




601,683


Escrow account receivable



(3,103)




(2,520)


Inventories



(1,558,802)




(882,764)


Prepayments



(226)




(5,108,162)


Contract liabilities



(5,129,684)




1,677,349


Accounts payable



(116,501)




2,297,940


Due to related parties



(20,822)




(5,518,273)


Due from third parties



(1,022,489)




-


Due from related parties



(331,761)




(457,032)


Income tax payable



2,121,985




1,175,327


Other current liabilities



721,712




(291,177)


Lease liabilities



(104,310)




-


Due to third party loans payable



12,849




-


Net cash provided by (used in) operating activities



469,839




(3,789,382)


Cash Flows from Investing Activities:









Purchases of intangible assets



-




(5,100,490)


Purchases of plant and equipment



(4,936)




(2,332)


Purchases of operating lease assets



(58,617)




-


Final payment of acquisition of a subsidiary



-




(15,533,312)


Payment made on loan to related parties



-




(7,174,955)


Payment made on loans to third parties



(80,502,961)




(45,057,871)


Collection of loans from related parties



10,839,631




43,687,593


Collection of loans from third parties



10,069,408




13,370,395


Investments in other investing activities



(444,871)




-


Net cash used in investing activities



(60,102,346)




(15,810,972)


Cash Flows from Financing Activities:









Proceeds from issuance of common stock under ATM transaction



-




2,192,989


Proceeds from issuance of common stock under private placement transactions



56,920,000




24,450,000


Proceeds from exercise of warrants



-




7,500


Proceeds from issuance of convertible promissory notes



3,000,000




4,500,000


Proceeds from borrowings from third parties



-




1,993,828


Repayments made on loans to related parties



-




(550,930)


Payments made on loans to third parties



-




(9,496,586)


Net cash provided by financing activities



59,920,000




23,096,801


Effect of exchange rate changes on cash and cash equivalents



(673,145)




700,055


Net increase/(decrease) in cash and cash equivalents



(385,652)




4,196,502


Cash at beginning of period



4,311,068




2,700,013


Cash at end of period


$

3,925,416



$

6,896,515


Supplemental Cash Flow Information









Cash paid for interest expense


$

43,310



$

-


Cash paid for income tax


$

1,744



$

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 promissory
notes


$

3,230,150



$

-


Issuance of common stocks in connection with warrant cashless exercise in March
2021


$

-



$

1,439,826


 

SOURCE TD Holdings, Inc.


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