TD Holdings, Inc. Reports Fiscal Year 2021 Financial Results

Rhea-AI Summary

TD Holdings, Inc. (Nasdaq: GLG) reported 2021 financial results with revenue soaring by 612% to $201.13 million, primarily due to increased sales in its commodities trading segment. The net loss narrowed to $0.94 million, a significant improvement from $5.95 million in 2020. Key milestones were achieved, positioning the company for potential profitability. With over $64 million in financing activities, cash and cash equivalents rose to $4.31 million. The company plans to leverage its market position and explore new growth opportunities.

Positive

• Revenue increased by 612% to $201.13 million.
• Net loss narrowed by 84% to $0.94 million.
• Achieved key milestones and positioned for future profitability.
• Cash and cash equivalents increased to $4.31 million.
• Interest income grew by 62% to $10.08 million.

Negative

• Total cost of revenue increased by 704% to $198.13 million.
• Selling, general, and administrative expenses rose by 168% to $8.14 million.

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: tina.xiao@ascent-ir.com
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 authorized; 138,174,150 and 79,131,207 shares issued and outstanding at December 31, 2021 and 2020, respectively)				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 of convertible promissory notes			(1,463,883)				(3,400,000)
Amortization of relative fair value of warrants relating to issuance of convertible promissory notes			-				(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) operating activities:
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 promissory notes			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 of convertible promissory notes			1,463,883				3,400,000
Amortization of relative fair value of warrants relating to issuance of convertible promissory notes			-				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 liabilities acquired and disposed):
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			$	-

 

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SOURCE TD Holdings, Inc.

FAQ

What were TD Holdings' 2021 revenue and net loss figures?

TD Holdings reported revenue of $201.13 million in 2021, with a net loss of $0.94 million.

How much did TD Holdings' revenue increase in 2021?

In 2021, TD Holdings' revenue increased by 612% compared to the previous year.

What factors contributed to TD Holdings' growth in 2021?

Growth was driven by increased sales in commodities trading and improved operational efficiency.

What is TD Holdings' plan for future growth?

TD Holdings plans to leverage market leadership and invest in new opportunities in global gold trading and lightweight materials.