TD Holdings, Inc. Reports Third Quarter 2022 Financial Results

SHENZHEN,China,Nov. 11,2022 -- TD Holdings,Inc. (Nasdaq:GLG) (the "Company"),a commodities trading service provider inChina,today announced its financial results for the third quarter endedSeptember 30,2022.

Ms.Renmei Ouyang,the Chief Executive Officer of the Company,stated,"The third quarter of fiscal year 2022 was challenging,we faced dynamic macro environment and uncertainty related to the resurgence of COVID-19 in China. However,we believe that we are on track to achieving our expansion targets by executing our strategies and keeping explore growth opportunities. We expect to implement several initiatives to increase our brand awareness and extend our market presence in the commodities trading market. We will continue providing valuable services to our customers,managing expenses prudently,improving our operating efficiency,and expanding our customer acquisition channels. In the remaining of 2022,we will strive to expand our capabilities to serve our customers,grow our business,deliver long-term growth and generate long-term shareholder value."

Financial Highlights

In the quarter ended September 30,2022

Total revenue was$37.89 million,consisting of$37.85 millionfrom sales of commodity products,and$0.04 millionfrom supply chain management services for the quarter ended September 30,2022,a decrease of 31% from $54.77 million for the same quarter ended September 30,2021.

Net income was $1.30 million,compared with $0.46 million for the same quarter ended September 30,2021.

Basic and diluted earnings per share were $0.02,compared with $0.02for the same quarter ended September 30,2021.

In the nine months ended September 30,2022

Total revenue was$139.73 million,consisting of$138.54 millionfrom sales of commodity products,and$1.19 millionfrom supply chain management services for the nine months ended September 30,a decrease of 3% from $144.20 million for the same period ended September 30,2021.

Net income was $4.32 million,as compared with net loss of $0.72 million for the same period ended September 30,2021.

Basic and diluted earnings per share were$0.09 and $0.08,respectively,compared with $0.04 and $0.03,respectivelyfor the same period ended September 30,2021.

Financial Results

In the three months ended September 30,2022

Revenues

For the three months ended September 30,the Company sold non-ferrous metals to 25 customers at fixed prices,and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $37.85 million from sales of commodity products for the three months ended September 30,compared with $52.73 million from sales of commodity products for the three months ended September 30,2021,among which,$1.37 million was generated from the related parties.

For the three months ended September 30,the Company earned revenue of $0.04 million from supply chain management services to third-party customers,compared with $2.04 million to third-party customers for the three months ended September 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 $14.79 million,or 28% to $38.01 million for the three months ended September 30,from $52.80 million for the three months ended September 30,primarily due to a decrease of $13.35 million in cost of revenue associated with commodity product sales from the third parties. 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 $0.27 million or 12%,to $1.95 million for the three months ended September 30,from $2.23 million for the three months ended September 30,2021. Selling,general and administrative expenses primarily consisted of salary and employee benefits,office rental expenses,amortizations of intangible assets and convertible promissory notes,professional service fees and finance offering related fees. Selling,general and administrative expenses for the three months ended September 30,2022 mainly included: (1) amortization of intangible assets of $0.95 million,(2) amortization of discount of convertible promissory notes of $0.14 million,and (3) salary of $0.51 million.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $2.85 million or 158%,to $4.66 million for the three months ended September 30,from $1.81 million for the three months ended September 30,2021. The increase was due to loans made to third-party vendors for the three months ended September 30,2022.

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

For the three months ended September 30,the item represented the amortization of beneficial conversion feature of $0.37 million and relating to the convertible promissory notes,and $0.62 million for the three months ended September 30,2021.

Net income

Net income was $1.30 million for the three months ended September 30,compared with $0.46 million for the three months ended September 30,2022

Revenues

For the nine months ended September 30,the Company sold non-ferrous metals to 25 third-party customers at fixed prices,and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $138.54 million from sales of commodity products for the nine months ended September 30,compared with $141.68 million for the nine months ended September 30,2021.

For the nine months ended September 30,the Company earned commodity distribution commission fees of $1.19 million from third-party vendors,compared with $2.52 million from third-party vendors for the nine months ended September 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 $2.83 million,or 2% to $138.85 million for the nine months ended September 30,from $141.69 million for the nine months ended September 30,primarily due to a decrease of $2.82 million in cost of revenue associated with commodity product sales. The decreased cost of revenue is in line with the decrease in sales volume.

Selling,general and administrative expenses increased by $0.23 million or 4%,to $6.08 million for the nine months ended September 30,from $5.85 million for the nine months ended September 30,general and administrative expenses mainly consisted of: (1) amortization of intangible assets of $2.97 million,(2) amortization of discount on convertible promissory notes of $0.35 million,and (3) salary of $1.35 million.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $6.56 million or 96%,to $13.42 million for the nine months ended September 30,from $6.85 million for the nine months ended September 30,2021. The increase was primarily due to a lot of growth of loans made to third-party vendors for the nine months ended September 30,2022.

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 five years,and volatility of 71.57% for the nine months ended September 30,2021.

On July 16,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 nine months ended September 30,no such expenses were incurred.

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

For the nine months ended September 30,the item represented the amortization of beneficial conversion feature of $0.90 million of three convertible promissory notes issued on March 4,October 4,2021 and May 6,2022.

For the nine months ended September 30,the item represented the amortization of beneficial conversion feature of $0.62 million of two convertible promissory notes issued on January 6,2021 and March 4,2021.

Net income (loss)

Net income was $4.32 million for the nine months ended September 30,compared with net loss of $0.72 million for the nine months ended September 30,2021.

Nine Months Ended September 30,2022Cash Flows

As ofSeptember 30,the Company had cash and cash equivalents of$2.68 million,as compared with$4.31 millionas of December31,2021.

Net cash provided by operating activities was$3.60 millionfor the nine months endedSeptember 30,compared with $0.94 millionfor the nine months endedSeptember 30,2021.

Net cash used in investing activities was$63.25 millionfor the nine months endedSeptember 30,compared with$62.21 millionfor the nine months endedSeptember 30,2021.

Net cash provided by financing activities was$59.89 millionfor the nine months endedSeptember 30,compared with$62.13 millionfor the nine months endedSeptember 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 September 30,2022 and December 31,2021

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

September30,

2022

December31,

2021

ASSETS

Current Assets

Cash and cash equivalents

$

2,684,644

$

4,311,068

Loans receivable from third parties

171,909,479

115,301,319

Prepayments

5,294

-

Due from related parties

301,624

11,358,373

Other current assets

4,873,054

3,288,003

Inventories

469,486

-

Total current assets

180,243,581

134,258,763

Non-Current Assets

Plant and equipment,net

3,524

2,872

Goodwill

63,784,194

71,028,283

Intangible assets,net

16,327,667

21,257,337

Right-of-use assets,net

622,930

888,978

Total non-current assets

80,738,315

93,177,470

Total Assets

$

260,981,896

$

227,436,233

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable

$

1,073,122

$

3,337,758

Bank borrowings

985,943

1,129,288

Third party loans payable

445,852

476,779

Contract liabilities

-

5,221,874

Due to related parties

-

21,174

Income tax payable

10,549,449

8,441,531

Lease liabilities

295,402

310,665

Other current liabilities

5,161,205

4,297,793

Convertible promissory notes

4,458,881

3,562,158

Total current liabilities

22,969,854

26,799,020

Non-Current Liabilities

Deferred tax liabilities

3,189,289

4,178,238

Lease liabilities

346,456

586,620

Total non-current liabilities

3,535,745

4,764,858

Total liabilities

26,505,599

31,563,878

Commitments and Contingencies (Note 16)

Equity

Common stock (par value $0.001 per share,600,000,000 shares authorized;

55,403,026 and 27,634,830 shares issued and outstanding as of September 30,

2022 and December 31,respectively)*

55,403

27,635

Additional paid-in capital

285,648,331

224,900,948

Statutory surplus reserve

1,477,768

1,768

Accumulated deficit

(37,877,553)

(42,200,603)

Accumulated other comprehensive (loss) income

(14,827,652)

11,666,607

Total Equity

234,476,297

195,872,355

Total Liabilities and Equity

$

260,233

* Retrospectively restated due to five for one reverse stock split,see Note 12 - Reverse stock split of common stock.

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

September 30,

For the Nine Months Ended

September 30,

2022

2021

2022

2021

Revenues

- Sales of commodity products – third parties

$

37,847,831

$

51,364,489

$

138,540,090

$

118,387,337

- Sales of commodity products – related parties

-

1,365,823

-

23,292,454

- Supply chain management services - third parties

40,724

2,043,494

1,190,976

2,515,919

Total Revenues

37,888,555

54,773,806

139,731,066

144,195,710

Cost of revenue

- Commodity product sales - third parties

(38,008,016)

(51,653)

(138,848,770)

(118,323,668)

- Commodity product sales - related parties

-

(1,429,486)

-

(23,347,003)

- Supply chain management services - third parties

(321)

(11,913)

(6,011)

(15,555)

Total cost of revenue

(38,337)

(52,800,052)

(138,854,781)

(141,686,226)

Gross profit

(119,782)

1,973,754

876,285

2,509,484

Operating expenses

Selling,and administrative expenses

(1,951,604)

(2,226,398)

(6,075,090)

(5,851,131)

Share-based payment for service

-

(141,400)

-

(1,836,442)

Total operating expenses

(1,604)

(2,367,798)

(6,090)

(7,687,573)

Other income (expenses),net

Interest income

4,659,595

1,809,398

13,416,254

6,491

Interest expenses

(149,308)

100,294

(388,750)

(182,954)

Amortization of beneficial conversion feature

relating to issuance of convertible promissory

notes

(365,125)

(619,025)

(898,783)

(619,025)

Other income (expense),net

104,961

251,014

(21,283)

(135,344)

Total other income,net

4,250,123

1,541,681

12,107,438

5,917,168

Net income before income taxes

2,737

1,147,637

6,908,633

739,079

Income tax expenses

(874,815)

(690,022)

(2,585,583)

(1,461,884)

Netincome (loss)

$

1,303,922

$

457,615

$

4,050

$

(722,805)

Comprehensive Income (Loss)

Net income (loss)

$

1,922

$

457,615

$

4,050

$

(722,805)

Foreign currency translation adjustments

(13,816,878)

(605,379)

(26,494,259)

1,457,191

Comprehensive income (loss)

$

(12,512,956)

$

(147,764)

$

(22,171,209)

$

734,386

Income (Loss) per share - basic and diluted

Income (loss) per share- basic

$

0.02

$

0.02

$

0.09

$

(0.04)

Income (loss) per share- diluted

$

0.02

$

0.02

$

0.08

$

(0.03)

Weighted Average Shares Outstanding-Basic

55,158,053

20,418,262

45,911,817

19,481,266

Weighted Average Shares Outstanding-Diluted

61,207,271

21,724,389

51,961,035

20,787,393

TD HOLDINGS,INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollar)

For the

Nine Months Ended

September 30,

2022

2021

Cash Flows from Operating Activities:

Net income (loss)

$

4,805)

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

Depreciation of property and equipment

4,503

331

Amortization of right of use assets

248,475

-

Amortization of intangible assets

2,967,735

2,905,932

Amortization of discount on convertible promissory notes

354,333

354,000

Monitoring fee relating to convertible promissory notes

157,276

-

Interest expense for convertible promissory notes

341,482

300,108

Standstill fee relating to convertible promissory notes

-

356,934

Deferred tax liabilities

(604,813)

(617,582)

Share-based payment for service

-

1,442

Amortization of beneficial conversion feature relating to issuance of convertible

promissory notes

898,783

619,025

Changes in operating assets and liabilities:

Other current assets

74,164

1,268,574

Inventories

(504,519)

-

Prepayments

(5,689)

-

Due from related parties

(517,471)

(385,132)

Due from third parties

(1,239,339)

(1,589,463)

Accounts payable

(2,067,808)

-

Contract liabilities

(5,039,217)

(1,785)

Due to related parties

(20,433)

(5,497,309)

Income tax payable

3,730

2,070,616

Other current liabilities

1,202,550

607,774

Lease liabilities

(178,203)

-

Due to third party loans payable

19,019

463,271

Net Cash Provided by Operating Activities

3,604,608

941,931

Cash Flows from Investing Activities:

Purchases of intangible assets

-

(5,100,306)

Purchases of plant and equipment

(5,449)

(2,603)

Purchases of operating lease assets

(58,617)

-

Final payment of acquisition of a subsidiary

-

(15,532,750)

Payment made on loans to related parties

(301,624)

-

Payment made on loans to third parties

(77,227,957)

(99,030,244)

Collection of loans from third parties

3,758,759

13,463,633

Collection of loans from related parties

10,637,336

44,399,732

Investments in other investing activities

(51,192)

(410,536)

Net Cash Used in by Investing Activities

(63,248,744)

(62,213,074)

Cash Flows from Financing Activities:

Repayments of borrowings to related parties

-

(1,896,122)

Payments of borrowings to the third parties

(30,272)

(556,397)

Proceeds from issuance of common stock under ATM

-

2,192,989

Proceeds from issuance of common stock under private placement transactions

56,920,000

57,941

Proceeds from convertible promissory notes

3,000

4,500,000

Proceeds from exercise of warrants

-

7,500

Net Cash Provided by Financing Activities

59,889,728

62,125,911

Effect of exchange rate changes on cash and cash equivalents

(1,016)

736,609

Net (decrease) increase in cash and cash equivalents

(1,626,424)

1,591,377

Cash at beginning of period

4,068

2,700,013

Cash at end of period

$

2,644

$

4,291,390

Supplemental Cash Flow Information

Cash paid for interest expense

$

63,752

$

-

Cash paid for income tax

$

1,712

$

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

$

3,855,150

$

-

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

2021

$

-

$

1,439,826

View original content:https://www.prnewswire.com/news-releases/td-holdings-inc-reports-third-quarter-2022-financial-results-301674078.html