TD Holdings, Inc. Reports Fiscal Year 2021 Financial Results
SHENZHEN, China, March 16, 2022 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company"), a commodities trading service provider in China, today announced its financial results for the year ended December 31, 2021.
Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "We delivered exceptional business results for the year ended December 31, 2021, driven by continued execution of our strategy and our demonstrated ability to manage challenges brought by COVID-19 epidemic. For the year ended December 31, 2021, our revenue increased by 612% to $201.13 million and net loss narrowed down by 84% to $0.94 million, compared with $28.27 million and $5.95 million for the year ended December 31, 2020. The results give us the confidence to reach operating break-even or even profitable soon and we are delighted to see that we are moving in that direction."
Ms. Renmei Ouyang continued, "For the year ended December 31, 2021, we accomplished several key milestones across the entire organization, building a stronger foundation for ongoing success. Looking forward, we intend to continue driving growth in our business by leveraging our market leadership and investing to capitalize on robust demand dynamics. We will keep exploring our business opportunities in the markets of global gold spot trading, digital cloud warehouse as well as lightweight new materials. We believe that our unique market position and visionary growth strategy allow us to increase return of capital to our shareholders."
Fiscal Year 2021 Financial Highlights
- Revenue from commodities trading business was $201.13 million, consisting of $197.95 million from sales of commodities products, and $3.18 million from supply chain management services, compared with $28.27 million for the year ended December 31, 2020, representing an increase of $172.87 million or 612%.
- Net loss from continuing operations was $0.94 million, compared with net loss from continuing operations of $2.40 million for the year ended December 31, 2020.
- Basic and diluted loss per share from continuing operations was $0.01, compared with basic and diluted loss per share from continuing operations of $0.05 for the year ended December 31, 2020.
Fiscal Year 2021 Financial Results
Revenues
For the year ended December 31, 2021, the Company sold non-ferrous metals to twenty-four third party customers and three related party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $173.90 million and $24.05 million, respectively, from sales of commodity products to twenty-four third party customers and three related party customers, compared with $8.25 million and $16.24 million, respectively, for the year ended December 31, 2020.
For the year ended December 31, 2021, the Company earned commodity distribution commission fees of $3.18 million from third party vendors compared with commission fees of $1.63 million from seven third party customers and distribution service fees of $2.14 million from three related party customers for the year ended December 31, 2020.
Cost of revenue
Our 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 increased by $173.49 million, or 704% to $198.13 million for the year ended December 31, 2021, from $24.64 million for the year ended December 31, 2020, primarily due to an increase of $173.44 million in cost of revenue associated with commodity product sales. The cost of revenue increased in line with the increased sales.
Selling, general, and administrative expenses
Selling, general and administrative expenses increased by $5.10 million, or 168%, to $8.14 million for the year ended December 31, 2021, from $3.04 million for the year ended December 31, 2020. 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. The increase was mainly attributable to (1) amortization of intangible assets of $3.93 million, and (2) amortization of convertible promissory notes of $0.49 million for the year ended December 31, 2021 while no such issuance for the year ended December 31, 2020.
Share-based payment for service
On March 4, 2021, 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 $1.70 million. 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 year ended December 31, 2021.
On July 16, 2021, 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 year ended December 31, 2020, no such expenses incurred.
Interest income
Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $3.84 million, or 62%, to $10.08 million for the year ended December 31, 2021, from $6.24 million for the year ended December 31, 2020. The increase was primarily due to loans made to Yunfeihu for the year ended December 31, 2021. For the year ended December 31, 2021, $4.12 million was attributed to related party and $5.94 million was generated from third party vendors.
Amortization of beneficial conversion feature and relative fair value of warrants relating to issuance of convertible notes
For the year ended December 31, 2021, there was amortization of beneficial conversion feature of $1.46 million of the three convertible promissory notes issued on January 6, 2021, on March 4, 2021 and on October 4, 2021.
For the year ended December 31, 2020, there was full amortization of beneficial conversion feature of $3.40 million and amortization of relative fair value of warrants of $3.06 million relating to the convertible promissory notes which was exercised in May 2020.
Net loss from continuing operations
Net loss from continuing for the year ended December 31, 2021 was $0.94 million, compared with net loss from continuing operations of $2.40 million for the year ended December 31, 2020.
Net loss
Net loss for the year ended December 31, 2021 was $0.94 million, compared with net loss of $5.95 million for the year ended December 31, 2020.
For the Year Ended December 31, 2021 Cash Flows
As of December 31, 2021, the Company had cash and cash equivalents of $4.31 million, compared with $2.70 million as of December 31, 2020.
Net cash provided by operating activities was $8.03 million for the year ended December 31, 2021, compared with $29.86 million as of December 31, 2020.
Net cash used in investing activities was $71.52 million for the year ended December 31, 2021, compared with $132.58 million as of December 31, 2020.
Net cash provided by financing activities was $64.12 million for the year ended December 31, 2021, compared with $106.15 million as of December 31, 2020.
About TD Holdings, Inc.
TD Holdings, Inc. is a service provider currently engaging in commodity 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 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. 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 epidemic 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 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.
For more information, please contact:
Ascent Investor Relations LLC
Ms. Tina Xiao
Email: [email protected]
Tel: +1 917 609 0333
TD HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2021 and 2020
December 31, |
December 31, |
||||||||
2021 |
2020 |
||||||||
ASSETS |
|||||||||
Current Assets |
|||||||||
Cash and cash equivalents |
$ |
4,311,068 |
$ |
2,700,013 |
|||||
Loans receivable from third parties |
115,301,319 |
18,432,691 |
|||||||
Due from related parties |
11,358,373 |
55,839,045 |
|||||||
Other current assets |
3,288,003 |
1,310,562 |
|||||||
Total current assets |
134,258,763 |
78,282,311 |
|||||||
Non-Current Assets |
|||||||||
Plant and equipment, net |
2,872 |
- |
|||||||
Goodwill |
71,028,283 |
69,322,325 |
|||||||
Intangible assets, net |
21,257,337 |
19,573,846 |
|||||||
Right-of-use assets, net |
888,978 |
- |
|||||||
Total non-current assets |
93,177,470 |
88,896,171 |
|||||||
Total Assets |
$ |
227,436,233 |
$ |
167,178,482 |
|||||
LIABILITIES AND EQUITY |
|||||||||
Current Liabilities |
|||||||||
Accounts payable |
$ |
3,337,758 |
$ |
- |
|||||
Bank borrowings |
1,129,288 |
1,653,247 |
|||||||
Third party loans payable |
476,779 |
- |
|||||||
Advances from customers |
5,221,874 |
9,214,369 |
|||||||
Due to related parties |
21,174 |
7,346,021 |
|||||||
Income tax payable |
8,441,531 |
5,460,631 |
|||||||
Lease liabilities |
310,665 |
- |
|||||||
Other current liabilities |
4,297,793 |
3,197,147 |
|||||||
Acquisition payable |
- |
15,384,380 |
|||||||
Convertible promissory notes |
3,562,158 |
- |
|||||||
Total current liabilities |
26,799,020 |
42,255,795 |
|||||||
Non-Current Liabilities |
|||||||||
Deferred tax liabilities |
4,178,238 |
4,893,461 |
|||||||
Lease liabilities |
586,620 |
- |
|||||||
Total non-current liabilities |
4,764,858 |
4,893,461 |
|||||||
Total liabilities |
31,563,878 |
47,149,256 |
|||||||
Commitments and Contingencies (Note 16) |
|||||||||
Equity |
|||||||||
Common stock (par value $0.001 per share, 600,000,000 shares |
138,174 |
79,131 |
|||||||
Additional paid-in capital |
224,790,409 |
151,407,253 |
|||||||
Statutory surplus reserve |
1,477,768 |
913,292 |
|||||||
Accumulated deficit |
(42,200,603) |
(39,255,945) |
|||||||
Accumulated other comprehensive income |
11,666,607 |
6,885,495 |
|||||||
Total TD Shareholders' Equity |
195,872,355 |
120,029,226 |
|||||||
Total Equity |
195,872,355 |
120,029,226 |
|||||||
Total Liabilities and Equity |
$ |
227,436,233 |
$ |
167,178,482 |
|||||
TD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2021 and 2020
(Expressed in U.S. dollars, except for the number of shares)
For the Years Ended |
||||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
Revenues |
||||||||
Sales of commodity products - third parties |
$ |
173,904,016 |
$ |
8,252,866 |
||||
Sales of commodity products - related parties |
24,049,999 |
16,243,777 |
||||||
Supply chain management services - third parties |
3,180,227 |
1,631,318 |
||||||
Supply chain management services - related parties |
- |
2,140,840 |
||||||
Total Revenues |
201,134,242 |
28,268,801 |
||||||
Cost of revenues |
||||||||
Commodity product sales - third parties |
(173,996,000) |
(7,853,215) |
||||||
Commodity product sales - related parties |
(24,045,511) |
(16,744,094) |
||||||
Supply chain management services - third parties |
(84,118) |
(43,162) |
||||||
Total operating costs |
(198,125,629) |
(24,640,471) |
||||||
Gross profit |
3,008,613 |
3,628,330 |
||||||
Operating expenses |
||||||||
Selling, general, and administrative expenses |
(8,137,481) |
(3,035,598) |
||||||
Share-based payment for service |
(1,836,442) |
- |
||||||
Total operating expenses |
(9,973,923) |
(3,035,598) |
||||||
Other income (expenses), net |
||||||||
Interest income |
10,079,776 |
6,239,943 |
||||||
Interest expenses |
(313,965) |
(185,106) |
||||||
Amortization of beneficial conversion feature relating to issuance |
(1,463,883) |
(3,400,000) |
||||||
Amortization of relative fair value of warrants relating to issuance |
- |
(3,060,000) |
||||||
Impairment of investment in an equity investee |
- |
(410,000) |
||||||
Other income (expense), net |
(285,774) |
- |
||||||
Total other income (expenses), net |
8,016,154 |
(815,163) |
||||||
Net income(loss) from continuing operations before income taxes |
1,050,844 |
(222,431) |
||||||
Income tax expenses |
(1,991,201) |
(2,177,924) |
||||||
Net loss from continuing operations |
(940,357) |
(2,400,355) |
||||||
Net loss from discontinued operations, net of tax |
- |
(3,551,258) |
||||||
Net loss |
(940,357) |
(5,951,613) |
||||||
Net loss attributable to TD Holdings, Inc.'s Stockholders |
$ |
(940,357) |
$ |
(5,951,613) |
||||
Other comprehensive income |
||||||||
Net loss |
$ |
(940,357) |
$ |
(5,951,613) |
||||
Foreign currency translation adjustment |
4,781,112 |
7,219,776 |
||||||
Comprehensive income |
3,840,755 |
1,268,163 |
||||||
Weighted Average Shares Outstanding-Basic |
107,417,633 |
51,273,048 |
||||||
Weighted Average Shares Outstanding- Diluted |
121,099,328 |
51,273,048 |
||||||
(loss) per share- basic |
$ |
(0.01) |
$ |
(0.12) |
||||
(loss) per share- diluted |
$ |
(0.01) |
$ |
(0.12) |
||||
(loss) per share continuing - basic and diluted |
$ |
(0.01) |
$ |
(0.05) |
||||
Income (loss) per share discontinued - basic and diluted |
$ |
- |
$ |
(0.07) |
||||
TD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2021 and 2020
(Expressed in U.S. dollar)
For the Years Ended |
||||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net loss |
$ |
(940,357) |
$ |
(5,951,613) |
||||
Less: Net loss from discontinued operations |
- |
3,551,258 |
||||||
Net loss from continuing operations |
(940,357) |
(2,400,355) |
||||||
Adjustments to reconcile net loss to net cash provided by (used in) |
||||||||
Depreciation of plant and equipment |
622 |
- |
||||||
Impairment of right of use assets |
- |
176,225 |
||||||
Amortization of right-of-use lease assets |
45,309 |
- |
||||||
Amortization of intangible assets |
3,927,961 |
514,618 |
||||||
Amortization of beneficial conversion feature of convertible |
489,000 |
- |
||||||
Interest expense for convertible promissory notes |
417,784 |
- |
||||||
Stock-based compensation to senior management |
- |
37,899 |
||||||
Share-based payment for service |
1,836,442 |
- |
||||||
Standstill fee relating to convertible promissory notes |
356,934 |
- |
||||||
Amortization of beneficial conversion feature relating to issuance |
1,463,883 |
3,400,000 |
||||||
Amortization of relative fair value of warrants relating to issuance |
- |
3,060,000 |
||||||
Impairment on investment securities |
- |
- |
||||||
Impairment of equity investments |
- |
410,000 |
||||||
Deferred tax liabilities |
(825,945) |
(135,930) |
||||||
Changes in operating assets and liabilities, (net of assets and |
||||||||
Other current assets |
5,558,942 |
(776,626) |
||||||
Inventories |
- |
403,471 |
||||||
Prepayments |
- |
13,317,930 |
||||||
Due from related parties |
(496,242) |
(4,327,269) |
||||||
Advances from customers |
(4,170,261) |
6,692,708 |
||||||
Due from third parties |
(2,619,091) |
5,321,874 |
||||||
Income tax payable |
2,808,268 |
2,313,853 |
||||||
Due to related parties |
(5,516,085) |
- |
||||||
Accounts payable |
3,299,002 |
- |
||||||
Other current liabilities |
1,039,735 |
2,148,993 |
||||||
Lease liabilities |
886,866 |
(176,225) |
||||||
Due to third party loans payable |
471,243 |
- |
||||||
Net cash provided by operating activities from continuing operations |
8,034,010 |
29,981,166 |
||||||
Net cash used in operating activities from discontinued operations |
- |
(125,133) |
||||||
Net cash provided by operating activities |
8,034,010 |
29,856,033 |
||||||
Cash Flows from Investing Activities: |
||||||||
Purchases of intangible assets |
(5,115,803) |
- |
||||||
Purchases of plant and equipment |
(3,469) |
- |
||||||
Purchases of operating lease assets |
(923,964) |
- |
||||||
Investment in subsidiary, net of cash acquired |
(15,579,946) |
(82,227,328) |
||||||
Payment made on loan to related parties |
- |
(47,114,208) |
||||||
Payment made on loans to third parties |
(108,800,053) |
(173,673,614) |
||||||
Collection of loans from third parties |
13,504,542 |
170,432,603 |
||||||
Collection of loans from related parties |
45,397,738 |
- |
||||||
Net cash used in investing activities from continuing operations |
(71,520,955) |
(132,582,547) |
||||||
Net cash used in investing activities from discontinued operations |
- |
- |
||||||
Net cash used in investing activities |
(71,520,955) |
(132,582,547) |
||||||
Cash Flows from Financing Activities: |
||||||||
Repayments made on loans to third parties |
(558,088) |
(318,748) |
||||||
Repayment made on loans to related parties |
(1,901,724) |
- |
||||||
Proceeds from borrowings from related parties |
- |
1,613,696 |
||||||
Proceeds from issuance of common stock under ATM transaction |
2,192,989 |
- |
||||||
Proceeds from registered direct offering, net of transaction costs |
- |
20,000,000 |
||||||
Proceeds from issuance of common stock under private placement transactions |
57,877,941 |
18,500,000 |
||||||
Proceeds from issuance of convertible promissory notes |
6,500,000 |
30,000,000 |
||||||
Proceeds from exercise of warrants |
7,500 |
36,353,731 |
||||||
Net cash provided by financing activities from continuing operations |
64,118,618 |
106,148,679 |
||||||
Net cash provided by financing activities from discontinued operations |
- |
- |
||||||
Net cash provided by financing activities |
64,118,618 |
106,148,679 |
||||||
Effect of Exchange Rate Changes on Cash |
979,382 |
(2,499,428) |
||||||
Net Increase in Cash |
1,611,055 |
922,737 |
||||||
Cash, Beginning of Year |
2,700,013 |
1,777,276 |
||||||
Cash, End of Year |
$ |
4,311,068 |
$ |
2,700,013 |
||||
Less: Cash from discontinued operations |
- |
- |
||||||
Cash from continuing operations |
$ |
4,311,068 |
$ |
2,700,013 |
||||
Cash paid for interest expense |
$ |
92,062 |
$ |
18,073 |
||||
Cash paid for income taxes |
$ |
75,416 |
$ |
- |
||||
Supplemental disclosure of non-cash investing and financing activities |
||||||||
Right-of-use assets obtained in exchange for operating lease obligations |
$ |
- |
$ |
186,191 |
||||
Issuance of common stocks in connection with private placements, net of issuance costs with proceeds collected in advance in November 2019 |
$ |
- |
$ |
1,600,000 |
||||
Issuance of common stocks in connection with conversion of convertible promissory notes |
$ |
- |
$ |
30,000,000 |
||||
Issuance of common stocks in connection with cashless exercise of 962,022 warrants |
$ |
- |
$ |
1,269,869 |
||||
Fair value of HC High Summit assets disposed |
$ |
- |
$ |
5,320,768 |
||||
HC High Summit liabilities derecognized |
$ |
- |
$ |
(2,606,257) |
||||
Issuance of common stocks in exchange of investments in one equity investee |
$ |
1,439,826 |
$ |
- |
||||
SOURCE TD Holdings, Inc.
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