TD Holdings, Inc. Reports Third Quarter 2020 Financial Results

SHENZHEN,China,Nov. 13,2020 -- TD Holdings,Inc.(Nasdaq: GLG) (the "Company"),a commodities trading and supply chain management service provider inChinatoday announced its financial results for the nine months endedSeptember 30,2020.

Affected by the ongoing outbreak of the COVID-19,the Company expected its used luxurious car leasing business to be subject to continuous losses due to the closure of stores. As a result,the Company sold the used luxurious car leasing business in August 2020 andfocus on the commodities trading and its complementary business.

Mrs. Renmei Ouyang,the Chief Executive Officer of the Company,stated,"We are pleased to report our financial results for the nine months ended September 30,2020. We started our commodities trading business in late 2019. We have successfully achieved net income from our continuing operations in the third quarter of 2020. We plan oncontinuing to develop our commodities trading business in terms of volume,revenues and net profit,and increase its value to our stockholders. In addition,our recent acquisition of Shenzhen Qianhai Baiyu Supply Chain Co.,Ltd. has laid a solid foundation for us to further expand our supply chain business in areas including warehousing,logistics,processing,and providing supply chain financing to downstream clients. We expect Qianhai Baiyu to synergize well with Huamucheng's existing operations as the two businesses will be able to share customer resources and sales channels,increasing our cost efficiency."

Financial Highlights

In the quarter ended September 30,2020

Revenues from commodities trading business was $7.21 million,consisting of $3.68 million from sales of commodities products,and $3.53 million from supply chain management services for the quarter ended September 30,2020;

Net income from continuing operations was $4.17 million,as compared with net loss from continuing operations of $0.26 million for the same period ended September 30,2019. Net income was $1.18 million,as compared with net loss of $0.39 million for the same period ended September 30,2019;

Basic and diluted earnings per share from continuing operations was $0.07,compared with basic and diluted loss per share from continuing operations of $0.03 for the same period ended September 30,2019. Basic and diluted earnings per share was $0.02,compared with basic and diluted loss per share of $0.05 for the same period ended September 30,2019; and

Shareholders' equity as of September 30,2020 was $93.9 million,an increase of 1,518.97% compared with $5.8 million as of December 31,2019.

In the nine months ended September 30,2020

Revenues from commodities trading business was $12.39 million,consisting of $6.30 million from sales of commodities products,and $6.09 million from supply chain management services for the quarter ended September 30,2020;

We raised funds aggregating $30 million from issuance of convertible notes,accompanied by warrants to purchase 20,000,000 shares of Common Stock issuable upon exercise of the warrants at an exercise price of $1.80,and raised $36 million from the holders of convertible notes upon their conversion of the convertible notes and exercise of the warrants. We therefore incurred noncash amortization of beneficial conversion feature of $3.4 million and amortization of relative fair value of warrants of $3.06 million;

Net income from continuing operations was $0.22 million,as compared with net loss from continuing operations of $2.12 million for the same period ended September 30,2019. Net loss was $3.32 million,as compared with $3.26 million for the same period ended September 30,2019; and

Basic and diluted earnings per share from continuing operations was $0.01,compared with basic and diluted loss per share from continuing operations of $0.30 for the same period ended September 30,2019. Basic and diluted loss per share was $0.08,compared with basic and diluted loss per share of $0.46 for the same period ended September 30,2019.

Financial Results

In the three months ended September 30,2020

Revenues

For the three months ended September 30,2020,the Company sold non-ferrous metals to six customers at fixed prices,and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $3,680,944 from sales of commodity products. There was no such revenue for the three months ended September 30,2019.

For the three months ended September 30,the Company earned distribution commission fees of $3,531,885 from facilitating metal product sales between the suppliers and the customers,and did not earn revenues from loan recommendation services.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products and business taxes and surcharges. For the three months ended September 30,the Company purchased non-ferrous metal products of $3,617,068 from two third party suppliers,and sold non-ferrous metal products to four customers. The Company recorded cost of revenue of $3,697,490. There was no such cost for the three months ended September 30,2019 because this was a new business launched in December 2019.

Selling,general,and administrative expenses

Selling,general and administrative expenses increased from $259,945 for the three months ended September 30,2019 to $292,080for the three months ended September 30,representing an increase of $32,135,or 12%. 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 an increase of $79,098 in rental expenses with our launch ofour commodities trading business,against a decrease of salary and payroll expenses of $27,012 because our new senior management charged less salary expenses.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. For the three months ended September 30,interest income was $2,356,as compared with $nil for the same period ended September 30,2019. The increase was primarily due to net loans of $83.3 million made to a customer,from which the Company earned interest income of $2.4 million.

Net loss from discontinued operations

During the three months ended September 30,the net loss from discontinued operations was comprised of a net loss of $nil from discontinued operations of the used luxurious car leasing business and a loss of $2,989,116from disposal of the discontinued operations of used luxurious car leasing business.

During the three months ended September 30,2019,the net loss from discontinued operations was comprised of a net loss of $132,898 from discontinued operations of the used luxurious car leasing business.

Net loss

Net income from continuing operations for the three months ended September 30,2020 was $4,170,658,representing a change of $4,430,603 from net loss from continuing operations of $259,2019.

Net income for the three months ended September 30,2020 was $1,181,542,representing a change of $1,574,385 from net loss of $392,843 for the three months ended September 30,2020

Revenues

For the nine months ended September 30,and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $6,298,245 from sales of commodity products. There was no such revenue for the nine months ended September 30,2019.

For the nine months ended September 30,the Company earned $2,332,735 from loan recommendation services from the facilitation of a loan volume of approximately $93.3 million (RMB 652.8 million) with five customers,and earned distribution commission fees of $3,760,338 from facilitating the metal product sales between the suppliers and the customers.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products and business taxes and surcharges. For the nine months ended September 30,the Company purchased non-ferrous metal products of $6,233,590 from three third party suppliers,and sold non-ferrous metal products to six customers. The Company recorded cost of revenue of $6,322,765.There was no such cost for the nine months ended September 30,general and administrative expenses decreased from $2,123,191 for the nine months ended September 30,2019 to $1,032,660 for the nine months ended September 30,representing a decrease of $1,090,or 51%.Selling,office supplies. The decrease was mainly attributable to a decrease of stock-based compensation expenses of $884,208,because we issued 502,391 restricted shares as compensation of $884,208 to certain service providers for the nine months ended September 30,while no such issuance was made for the nine months ended September 30,and a decrease of $112,061 in salary and payroll expenses because the new senior management of the Company charged less payroll expenses.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. For the nine months ended September 30,interest income was $3,965,283,representing an increase of $3,964,647 from $636 for the nine months ended September 30,2019. The increase was primarily due to net loans of $83.3 millionmade to a customer. The Company earned interest income of $3.82 million from this customer.

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

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

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

Net loss from discontinued operations

During the nine months ended September 30,the net loss from discontinued operations was comprised of net loss of $552,691 from discontinued operations of used luxurious car leasing business and a loss of $3,541,807 from disposal of the discontinued operations of the used luxurious car leasing business.

During the nine months ended September 30,the net loss from discontinued operations was comprised of net loss of $1,140,439 from discontinued operations of the used luxurious car leasing business.

Net loss

Net income from continuing operations for the nine months ended September 30,2020 was $222,119,representing a change of $2,344,674 from net loss from continuing operations of $2,122,555 for the nine months ended September 30,2019.

Net loss for the nine months ended September 30,2020 was $3,319,688,representing an increase of $56,694 from net loss of $3,262,994 for the nine months ended September 30,2019.

Nine Months Ended September 30,2020 Cash Flows

As of September 30,the Company had cash and cash equivalents of $2.97 million,as compared with $1.78 million as of December31,2019.

Net cash provided by operating activities from continuing operations was $1.64 million for the nine months ended September 30,as compared with cash used in operating activities from continuing operations of $1.20 million for the same period of 2019. Net cash provided by operating activities was $0.94 million for the nine months ended September 30,as compared with cash used in operating activities from continuing operations of $2.02 million for the same period of 2019.

Net cash used in investing activities was $81.71 million for the nine months ended September 30,compared to $5.46 million for the same period of 2019.

Net cash provided by financing activities was $81.05 million for the nine months ended September 30,compared to $7.40 million for the same period of 2019.

About TD Holdings,Inc.

TD Holdings,Inc. (Nasdaq: GLG) isa commodities trading and supply chain management service provider in China. Our commodities trading and supply chain management businesses are conducted under the brand names "Huamucheng" by Shenzhen Huamucheng Trading Co.,Ltd. and "Qianhai Baiyu" by Shenzhen Qianhai Baiyu Supply Chain Co.,Ltd.,the Company's wholly owned subsidiaries in Shenzhen. 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. 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 athttp://www.sec.gov. All forward-looking statements attributable to the Company or persons actingon 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.

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