TD Holdings, Inc. Reports First Quarter 2023 Financial Results

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SHENZHEN, China, May 13, 2023 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company"), a commodities trading service provider in China, 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 million from sales of commodity products, and $0.01 million from 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, 2023, 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, 2023, compared with $0.04 for the same quarter ended March 31, 2022.

First Quarter 2023 Financial Results

Revenues

For the quarter ended March 31, 2023, 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, 2023, compared with $47.58 million for the same quarter ended March 31, 2022.

For the quarter ended March 31, 2023, 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, 2023, 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, 2023, 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, 2022, 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, 2023, 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, 2023, 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, 2022, 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, 2023, compared with $1.59 million for the same quarter ended March 31, 2022.

Three Months Ended March 31, 2023 Cash Flows

As of March 31, 2023, the Company had cash and cash equivalents of $1.98 million, as compared with $0.89 million as of December 31, 2022.

Net cash provided by operating activities was $2.77 million for the quarter ended March 31, 2023, compared with $3.75 million for the same quarter ended March 31, 2022.

Net cash used in investing activities was $46.69 million for the quarter ended March 31, 2023, compared with $50.00 million for the same quarter ended March 31, 2022.

Net cash provided by financing activities was $45.91 million for the quarter ended March 31, 2023, compared with $45.50 million for 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 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 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 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: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,



December 31,




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



1,018,671




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 December 31, 2022, respectively)*



144,841




106,742


Additional paid-in capital



390,154,966




344,295,992


Statutory surplus reserve



2,602,667




2,602,667


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)


Total Equity



347,368,337




297,974,169











Total Liabilities and Equity


$

414,375,811



$

363,097,798




* 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)


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
March 31,




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



(34,653,279)




(47,602,178)











Gross (loss)/profit



(75,641)




556,938











Operating expenses









Selling, general, and administrative expenses



(2,743,061)




(2,247,707)


Total operating expenses



(2,743,061)




(2,247,707)











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 income before 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.'s Stockholders



850,243




1,593,857











Comprehensive Income









Net income



451,277




1,593,857


Foreign currency translation adjustments



3,045,818




881,196


Comprehensive Income


$

3,497,095



$

2,475,053


Less: Total comprehensive loss attributable to non-controlling interests



(398,966)




-


Comprehensive income attributable to TD Holdings, Inc.'s Stockholders


$

3,896,061



$

2,475,053











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*



140,045,132




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 March 31,



2023



2022









Cash Flows from Operating Activities:







Net income


$

451,277



$

1,593,857


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



2,767,040




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



3,000,000




-


Net cash provided by financing activities



45,909,073




45,500,000











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


$

1,981,012



$

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











 


Source: TD Holdings, Inc. Related Stocks: NASDAQ:GLG

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