TD Holdings, Inc. Reports Second Quarter 2022 Financial Results

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

Total revenue was$53.68 million,consisting of$53.11 millionfrom sales of commodity products,and$0.57 millionfrom supply chain management services for the quarter ended June 30,2022,a decrease of 10% from $59.84 million for the same quarter ended June 30,2021.

Net income was $1.43 million,compared with $0.36 million for the same quarter ended June 30,2021.

Basic and diluted earnings per share was $0.01,compared with $nilfor the same quarter ended June 30,2021.

In the six months ended June 30,2022

Total revenue was$101.84 million,consisting of$100.69 millionfrom sales of commodity products,and$1.15 millionfrom supply chain management services for the six months ended June 30,an increase of 14% from $89.42 million for the same period ended June 30,2021.

Net income was $3.02 million,as compared with net loss of $1.18 million for the same period ended June 30,2021.

Basic and diluted earnings per share was$0.01,compared with basic and diluted loss per share of$0.01for the same period ended June 30,2021.

Financial Results

In the three months ended June 30,2022

Revenues

For the three months ended June 30,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,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,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,from $59.47 million for the three months ended June 30,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,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,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,the item represented the amortization of beneficial conversion feature of $0.32 million and relating to the convertible promissory notes.

For the three months endedJune 30,no such expenses incurred.

Net income

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

Revenues

For the six months ended June 30,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,compared with $88.95 million for the six months ended June 30,2021.

For the six months ended June 30,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,from $88.89 million for the six months ended June 30,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 increased by $0.50 million or 14%,to $4.12 million for the six months ended June 30,from $3.62 million for the six months ended June 30,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,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,$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,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,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,the item represented the amortization of beneficial conversion feature of $0.53 million relating to the convertible promissory notes.

For the six months endedJune 30,no such expenses incurred.

Net income (loss)

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

Six Months Ended June 30,2022Cash Flows

As ofJune 30,the Company had cash and cash equivalents of$3.93 million,as compared with$4.31 millionas of December31,2021.

Net cash provided by operating activities was$0.47 millionfor the six months endedJune 30,compared withnet cash used in operating activities of $3.79 millionfor the six months endedJune 30,2021.

Net cash used in investing activities was$60.10 millionfor the six months endedJune 30,compared with$15.81 millionfor the six months endedJune 30,2021.

Net cash provided by financing activities was$59.92 millionfor the six months endedJune 30,compared with$23.10 millionfor the six months endedJune 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 visithttp://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 athttp://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,

December31,

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

28,438

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,respectively)

273,680

138,174

Additional paid-in capital

284,805,054

224,790,409

Statutory surplus reserve

1,477,768

1,768

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

$

274,233

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,and administrative expenses

(1,875,779)

(2,054,354)

(4,123,486)

(3,624,733)

Share-based payment for service

-

-

-

(1,042)

Total operating expenses

(1,779)

(2,354)

(4,486)

(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

2,308

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)

$

1,271

$

357,856

$

3,128

$

(1,420)

Foreign currency translation adjustments

(13,558,577)

2,706,148

(12,677,381)

2,062,570

Comprehensiveincome (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

June30,

2022

2021

Cash Flows from Operating Activities:

Net income(loss)

$

3,420)

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

-

1,042

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

(1,802)

(882,764)

Prepayments

(226)

(5,162)

Contract liabilities

(5,684)

1,349

Accounts payable

(116,501)

2,940

Due to related parties

(20,822)

(5,518,273)

Due from third parties

(1,489)

-

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

-

(7,955)

Payment made on loans to third parties

(80,502,961)

(45,057,871)

Collection of loans from related parties

10,631

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

4,500,000

Proceeds from borrowings from third parties

-

1,993,828

Repaymentsmade on loans to related parties

-

(550,930)

Payments made on loans to third parties

-

(9,496,586)

Net cash provided by financing activities

59,000

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

4,068

2,700,013

Cash at end of period

$

3,416

$

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

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