TD Holdings, Inc. Reports Fiscal Year 2019 Financial Results

BEIJING,May 30,2020 -- 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

Income from commodities trading business was $0.66 million,consisting of $0.10 million from sales of commodities products,and $0.56 million from supply chain management services; Income from operating lease reached $1.83 million,compared with $0.49 million for the fiscal year 2018,representing an increase of $1.34 million or 275%.

Net loss from continuing operations was $6.94 million,compared with net loss from continuing operations of $2.32 million for the fiscal year 2018.

Basic and diluted loss per share from continuing operations was $0.89,compared with basic and diluted loss per share of $0.50 for the fiscal year 2018.

Shareholders' equity was $5.80 million as of December 31,2019,compared with shareholders' equity of $2.80 million as of December 31,2018.

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,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,and impairment on investment in two equity investees of $2,098,737 for the year ended December 31,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,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,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,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,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 shares authorized at December 31,2019 and 2018,respectively; nil shares issued and outstanding at December 31,respectively)

-

-

Series B Preferred Stock (par value $0.001 per share,5,respectively)

-

-

Common stock (par value $0.001 per share,100,000 shares authorized; 11,585,111 and 5,023,906 shares issued and outstanding at December 31,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

2,223

Total Liabilities and Equity

$

11,580

TD HOLDINGS,Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

For the Years Ended

December 31,

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,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)

-

Impairment of investment in equity investees

(2,737)

-

Total other expenses,net

(3,736)

(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)

(6,522)

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)

$

7,157

Comprehensive income (loss)

Net income (loss)

$

(6,522)

$

7,157

Foreign currency translation adjustment

176,776

(5,329,710)

Reclassified to net income from discontinued operations

-

4,912,715

Total comprehensive income (loss)

(6,746)

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)

$

7,162

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.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years

Ended December 31,

2019

2018

Cash Flows from Operating Activities:

Net (loss) income

$

(6,522)

$

7,157

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

Impairment on investment in equity investees

2,737

-

Stock-based compensation to service providers

884,208

-

Gain on disposal of discontinued operations

-

(9,629)

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)

-

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

1,000

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

1,116

1,359,630

Cash,End of Year

$

2,683

$

1,116

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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