TD Holdings, Inc. Reports First Quarter 2023 Financial Results
SHENZHEN,China,May 13,2023 --TD Holdings,Inc. (Nasdaq:GLG) (the "Company"),a commodities trading service provider inChina,today announced its unaudited financial results for the first quarter ended March 31,2023.
Ms.Renmei Ouyang,the Chief Executive Officer of the Company,stated,"We continued to provide unparalleled services to our clients and explore new partnerships to address the market opportunities in the first quarter of fiscal year 2023. In the remaining of 2023,we will continue to execute our development plan to expand our business scale and improve our brand awareness. We will remain focus on the optimization of our commodities trading business and supply chain service business to expand our client base. We believe our dedicated and experienced team is our foundation to separate us from other competitors and enhance our competitive market position. With the rapid resumption of business activities,we expect to actively explore new corporations,provide high-quality services to best serve our clients' demand and generate additional revenue sources. In addition to the growth plan,we expect to improve our efficiency by implementing necessary measures. We remain confident about our future prospects with our long-term development strategy on seeking growth opportunities in our business."
First Quarter 2023 Financial Highlights
Total revenue was$34.58 million,consisting of$34.57 millionfrom sales of commodity products,and$0.01 millionfrom supply chain management services for the quarter ended March 31,2023,a decrease of 28% from $48.16 million for the same quarter ended March 31,2022.
Net income was $0.45 million for the quarter ended March 31,compared with $1.59 million for the same quarter ended March 31,2022.
Basic and diluted earnings per share were $0.00 respectively,for the quarter ended March 31,compared with $0.04for the same quarter ended March 31,2022.
First Quarter 2023 Financial Results
Revenues
For the quarter ended March 31,the Company sold non-ferrous metals to 14 third-party customers at fixed prices,and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $34.57 million from sales of commodity products for the quarter ended March 31,compared with $47.58 million for the same quarter ended March 31,2022.
For the quarter ended March 31,the Company recorded revenue of $0.01 million from supply chain management services to third-party customers,compared with $0.58 million to third-party vendors for the same quarter ended March 31,2022.
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 $12.95 million,or 27% to $34.65 million for the quarter ended March 31,from $47.60 million for the same quarter ended March 31,2022,primarily due to the decrease in the cost of revenue associated with commodity product sales.
Selling,General,and Administrative Expenses
Selling,general and administrative expenses increased by $0.50 million or 22%,to $2.74 million for the quarter ended March 31,from $2.25 million for the same quarter ended March 31,2022. 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. The increase was mainly attributable to the amortization of intangible assets of $2.05 million,as the company acquired a software copyright of the original amount of RMB300 million in connection with the contractual arrangement with Shenzhen Tongdow Internet Technology Co.,Ltd. on October 25,which contributed $1.10 million to selling,general,and administrative expenses for the three months ended March 31,2022.
Interest Income
Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $0.06 million or 1%,to $4.45 million for the quarter ended March 31,from $4.39 million for the same quarter ended March 31,2022.
Amortization of Beneficial Conversion Feature and Relative Fair Value of Warrants Relating to the Issuance of Convertible Promissory Notes
For the quarter ended March 31,the item represented the amortization of beneficial conversion feature of $0.22 million of two convertible promissory notes issued on May 6,2022 and March 13,2023.
For the same quarter ended March 31,the item represented the amortization of beneficial conversion feature of $0.21 million of three convertible promissory notes issued on January 6,2021,March 4,2021 and October 4,2021.
Net Income
Net income was $0.45 million for the quarter ended March 31,2022.
Three Months Ended March 31,2023Cash Flows
As ofMarch 31,the Company had cash and cash equivalents of$1.98 million,as compared with$0.89 millionas of December31,2022.
Net cash provided by operating activities was$2.77 millionfor the quarter ended March 31,compared with $3.75 millionfor the same quarter ended March 31,2022.
Net cash used in investing activities was$46.69 millionfor the quarter ended March 31,compared with$50.00 millionfor the same quarter ended March 31,2022.
Net cash provided by financing activities was$45.91 millionfor the quarter ended March 31,compared with$45.50 millionfor the same quarter ended March 31,2022.
About TD Holdings,Inc.
TD Holdings,Inc. is a service provider currently engaging in the commodities trading business and supply chain service business in China. Its commodities trading business primarily involves purchasing non-ferrous metal products 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 March 31,2023 and December 31,2022
(Expressed in U.S. dollars,except for the number of shares)
March 31,
December31,
2023
2022
ASSETS
Current Assets
Cash and cash equivalents
$
1,981,012
$
893,057
Loans receivable from third parties
191,630,240
143,174,634
Other current assets
4,991,860
4,040,477
Inventories,net
415,718
458,157
Total current assets
199,018,830
148,566,325
Non-Current Assets
Plant and equipment,net
5,239
6,370
Goodwill
162,379,512
160,213,550
Intangible assets,net
52,803,772
54,114,727
Right-of-use assets,net
168,458
196,826
Total non-current assets
215,356,981
214,531,473
Total Assets
$
414,375,811
$
363,097,798
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable
$
-
$
1,269
Bank borrowings
1,671
1,005,083
Third party loans payable
472,842
460,587
Contract liabilities
18,395
437,148
Income tax payable
12,835,992
11,634,987
Lease liabilities
109,977
116,170
Other current liabilities
5,654,669
5,348,646
Convertible promissory notes
4,635,456
4,208,141
Total current liabilities
24,746,002
23,212,031
Non-Current Liabilities
Due to related party
39,291,587
38,767,481
Deferred tax liabilities
2,907,489
3,059,953
Lease liabilities
62,396
84,164
Total non-current liabilities
42,261,472
41,911,598
Total liabilities
67,007,474
65,123,629
Commitments and Contingencies (Note 16)
Equity
Common stock (par value $0.001 per share,600,000,000 shares authorized;
144,841,328 and 106,742,117 shares issued and outstanding as of March 31,2023
and December31,respectively)*
144,841
106,742
Additional paid-in capital
390,154,966
344,295,992
Statutory surplus reserve
2,602,667
2,667
Accumulated deficit
(37,950,132)
(38,800,375)
Accumulated other comprehensive income
(5,939,107)
(8,984,925)
Total TD Shareholders' Equity
349,013,235
299,220,101
Non-controlling interest
(1,644,898)
(1,245,932)
TotalEquity
347,368,337
297,974,169
Total Liabilities and Equity
$
414,798
* Retrospectively restated due to five for one Reverse Stock Split,see Note 12 - Reverse stock split of commonstock.
TD HOLDINGS,INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended March 31,2023 and 2022
(Expressed in U.S. dollars,except for the number of shares)
For the Three Months
Ended
March31,
2023
2022
Revenues
- Sales of commodity products – third parties
$
34,571,288
$
47,583,965
- Supply chain management services – third parties
6,350
575,151
Total revenue
34,577,638
48,159,116
Cost of revenues
- Commodity product sales-third parties
(34,653,239)
(47,590,576)
- Supply chain management services-third parties
(40)
(11,602)
Total operating costs
(34,279)
(47,178)
Gross (loss)/profit
(75,641)
556,938
Operating expenses
Selling,and administrative expenses
(2,743,061)
(2,247,707)
Total operatingexpenses
(2,061)
(2,707)
Net Operating Loss
(2,818,702)
(1,690,769)
Other income (expenses),net
Interest income
4,449,000
4,390,341
Interest expenses
(109,987)
(110,326)
Amortization of beneficial conversion feature relating to issuance of convertible
promissory notes
(220,652)
(213,367)
Other income,net
4,523
95,709
Total other income,net
4,122,884
4,162,357
Net incomebefore income taxes
1,304,182
2,471,588
Income tax expenses
(852,905)
(877,731)
Net income
451,277
1,593,857
Less: Net loss attributable to non-controlling interests
(398,966)
-
Net income attributable to TD Holdings,Inc.'sStockholders
850,243
1,857
Comprehensive Income
Net income
451,857
Foreign currency translation adjustments
3,045,818
881,196
ComprehensiveIncome
$
3,497,095
$
2,475,053
Less: Total comprehensive loss attributable to non-controlling interests
(398,966)
-
Comprehensive income attributable to TD Holdings,Inc.'sStockholders
$
3,896,061
$
2,053
Income per share - basic and diluted
Continuing Operation- income per share – basic*
$
0.00
$
0.04
Continuing Operation- income per share –diluted*
$
0.00
$
0.04
Weighted Average Shares Outstanding-Basic*
140,132
39,688,232
Weighted Average Shares Outstanding- Diluted*
148,121,900
42,710,590
* 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 CASH FLOWS
For the Three Months Ended March 31,2023 and 2022
(Expressed in U.S. dollar)
For the Three Months
Ended March31,
2023
2022
Cash Flows from Operating Activities:
Net income
$
451,277
$
1,857
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation of plant and equipment
1,215
3,217
Amortization of intangible assets
2,049,732
1,029,186
Amortization of right of use assets
30,846
76,983
Amortization of discount on convertible promissory notes
93,333
111,000
Interest expense for convertible promissory notes
101,330
93,285
Amortization of beneficial conversion feature of convertible promissory notes
220,652
213,367
Monitoring fee relating to convertible promissory notes
-
69,685
Deferred tax liabilities
(194,515)
(209,744)
Inventories impairment
(17,229)
-
Escrow account receivable
-
(54,985)
Inventories
66,033
(133,810)
Other current assets
(24,222)
(29,775)
Prepayments
447,960
(1,891,842)
Contract liabilities
(426,158)
1,900,456
Due to related parties
-
(21,259)
Due from third parties
(628,474)
(481,816)
Due from related parties
(685,488)
28,897
Accounts payable
(1,291)
(116,078)
Income tax payable
1,047,382
1,085,694
Other current liabilities
259,083
499,661
Lease liabilities
(30,476)
(19,734)
Due to third party loans payable
6,050
6,523
Net cash provided by operating activities
2,040
3,752,768
Cash Flows from Investing Activities:
Purchases of plant and equipment
-
(5,039)
Purchases of operating lease assets
-
(58,617)
Loans made to third parties
(46,678,620)
(60,177,853)
Collection of loans from related parties
-
11,066,822
Investments in other investing activities
(10,707)
(828,601)
Net cash used in investing activities
(46,689,327)
(50,003,288)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock under ATM transaction
559,073
-
Proceeds from issuance of common stock under private placement transactions
42,350,000
45,500,000
Proceeds from convertible promissory notes
3,000
-
Net cash provided by financing activities
45,909,073
45,000
Effect of exchange rate changes on cash and cash equivalents
(898,831)
13,794
Net increase/(decrease) in cash and cash equivalents
1,087,955
(736,726)
Cash and cash equivalents at beginning of period
893,057
4,311,068
Cash and cash equivalents at end of period
$
1,012
$
3,574,342
Supplemental Cash Flow Information
Cash paid for interest expenses
$
19,934
$
22,109
Cash paid for income taxes
$
-
$
1,781
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
$
2,988,000
$
1,804,820
