PR Newswire | Aug 17, 2021 04:31PM EDT

08/17 15:30 CDT

TD Holdings, Inc. Reports Second Quarter 2021 Financial Results SHENZHEN, China, Aug. 17, 2021

SHENZHEN, China, Aug. 17, 2021 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company"), a commodities trading service provider in China, today announced its financial results for the second quarter ended June 30, 2021.

Affected by the ongoing outbreak of the COVID-19, the Company expected its used luxurious car leasing business to be subject to continuous losses due to the closure of stores. As a result, the Company sold the used luxurious car leasing business in August 2020 and focused on the commodities trading and its complementary businesses.

Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "We are pleased to report our financial results for the second quarter of fiscal year 2021. Despite the setbacks caused by the COVID-19 outbreak and having just started our commodities trading business in late 2019, our revenue increased by 2981% to $59.84 million for the second quarter of fiscal year 2021 as compared to the second quarter of fiscal year 2020. The growth figure demonstrates that we are optimally situated to capture the opportunities in the market. We remain focused on driving momentum in our business, and we recently announced that we plan to commence our commodity trading business in Yangpu Economic Development Zone and launch a blockchain payment and settlement platform for online commodity trading in Yangzhou Economic & Technological Development Zone in China. Looking forward, we will strengthen the Company's competitive position over the long-term, including developing our global commodity e-commerce platform, building our own digital cloud warehouse, improving our trading settlement and payment system, creating a supply chain financial ecosystem as well as acquiring large-scale overseas minerals. With the visibility and validation afforded as a Nasdaq listed company, we can now confidently focus on building profitable revenue growth and creating value for our shareholders."

Financial Highlights

In the quarter ended June 30, 2021

* Total revenue was $59.84 million, consisting of $59.51 million from sales of commodities products, and $0.33 million from supply chain management services for the quarter ended June 30, 2021, an increase of 2981% from $1.94 million for the same quarter ended June 30, 2020. * Net income from continuing operation was $0.36 million, as compared with net loss from continuing operations of $5.17 million for the same quarter ended June 30, 2020. Net income was $0.36 million, as compared with net loss of $5.46 million for the same quarter ended June 30, 2020. * Basic and diluted earnings per share from continuing operations was nil, compared with basic and diluted loss per share from continuing operations of $0.11 for the same quarter ended June 30, 2020.

In the six months ended June 30, 2021

* Total revenue was $89.42 million, consisting of $88.95 million from sales of commodities products, and $0.47 million from supply chain management services for the six months ended June 30, 2021, an increase of 2740% from $3.15 million for the same period ended June 30, 2020. * Net loss from continuing operation was $1.18 million, as compared with net loss from continuing operations of $5.26 million for the same period ended June 30, 2020. Net loss was $1.18 million, as compared with net loss of $5.82 million for the same period ended June 30, 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 $0.17 for the same period ended June 30, 2020.

Financial Results

In the three months ended June 30, 2021

Revenues

For the three months ended June 30, 2021, the Company sold non-ferrous metals to two customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $59.51 million from sales of commodity products for the three months ended June 30, 2021, among which, $1.52 million generated from the related party, compared with $1.56 million from sales of commodity products for the three months ended June 30, 2020.

For the three months ended June 30, 2021, the Company earned commodity distribution commission fees of $0.33 million from eight third party customers, compared with $0.35 million from two third party customers and $0.03 million from one related party customer for the three months ended June 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the three months ended June 30, 2021, the Company purchased non-ferrous metal products of $57.93 million from fifteen third party vendors and $1.53 million from five related party vendors, compared with $1.37 million from one third party vendor and $0.20 million from one related party vendor for the three months ended June 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $1.61 million or 368%, to $2.05 million for the three months ended June 30, 2021, from $0.44 million for the three months ended June 30, 2020. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, amortizations of intangible assets and convertible notes, professional service fees and finance offering related fees. The increase was mainly attributable to 1) amortization of intangible assets of $1.01 million and, 2) amortization of convertible notes of $0.12 million for the three months ended June 30, 2021 while no such issuance for the three months ended June 30, 2020.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $1.14 million or 63%, to $2.94 million for the three months ended June 30, 2021, from $1.80 million for the three months ended June 30, 2020. The increase was primarily due to loans made to Shenzhen Xinsuniao for the three months ended June 30, 2020 to $59.50 million made to additional 13 vendor customers, among which, $2.01 million was attributed to relate party and $0.94 million was generated from third party vendors.

Amortization of relative fair value of warrants relating to service provider

For the three months ended June 30, 2020, the item represented the full amortization of beneficial conversion feature of $3.4 million and amortization of relative fair value of warrants of $3.06 million relating to the convertible notes which was exercised in May 2020.

For the three months ended June 30, 2021, no such expenses incurred.

Net income from continuing operations

Net income was $0.36 million for the three months ended June 30, 2021, compared with net loss of $5.17 million for the three months ended June 30, 2020.

Net loss from discontinued operations

During the three months ended June 30, 2020, net loss from discontinued operations was $0.29 million from discontinued operations of used luxurious car leasing business.

In the six months ended June 30, 2021

Revenues

For the six months ended June 30, 2021, the Company sold non-ferrous metals to two related party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $88.95 million from sales of commodity products for the six months ended June 30, 2021, compared with $2.62 million for the six months ended June 30, 2020.

For the six months ended June 30, 2021, the Company earned commodity distribution commission fees of $0.47 million from third party vendors, compared with commission fees of $0.46 million from three third party customers and distribution service fees of $0.07 million from one related party customer for the six months ended June 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the six months ended June 30, 2021, the Company purchased non-ferrous metal products of $67.68 million from fifteen third party vendors and $21.20 million from five related party vendors, compared with $1.36 million from on third party vendor and $1.26 million from one related party vendor for the six months ended June 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $2.88 million or 389%, to $3.62 million for the six months ended June 30, 2021, from $0.74 million for the six months ended June 30, 2020. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, amortizations of intangible assets and convertible notes, professional service fees and finance offering related fees. The increase was mainly attributable to 1) amortization of intangible assets of $1.89 million and, 2) amortization of convertible notes of $0.16 million for the six months ended June 30, 2021 while no such issuance for the three months ended June 30, 2020, 3) professional fee increased from $0.51 million to $0.77 million.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $3.16 million or 168%, to $5.04 million for the six months ended June 30, 2021, from $1.88 million for the six months ended June 30, 2020. The increase was primarily due to loans made to Shenzhen Xinsuniao for the three months ended June 30, 2020 to $59.50 million made to additional 13 vendor customers, among which, $3.62 million was attributed to relate party and $1.42 million was generated from third party vendors.

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 $ $1,695,042. 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 5 years, and volatility of 71.57% for the six months ended June 30, 2021.

For the six months ended June 30, 2020, no such expenses incurred.

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

For the six months ended June 30, 2020, the item represented the full amortization of beneficial conversion feature of $3.4 million and amortization of relative fair value of warrants of $3.06 million relating to the convertible notes which was exercised in May 2020.

For the six months ended June 30, 2021, no such expenses incurred.

Net loss from continuing operations

Net loss was $1.18 million for the six months ended June 30, 2021, compared with net loss of $5.26 million for the six months ended June 30, 2020.

Net loss from discontinued operations

During the six months ended June 30, 2020, net loss from discontinued operations was $0.55 million from discontinued operations of used luxurious car leasing business.

Six Months Ended June 30, 2021 Cash Flows

As of June 30, 2021, the Company had cash and cash equivalents of $6.90 million, as compared with $2.70 million as of December 31, 2020.

Net cash used in operating activities from continuing operations was $3.79 million for the six months ended June 30, 2021, compared with $2.74 million for the six months ended June 30, 2020. Net cash used in operating activities was $3.79 million for the six months ended June 30, 2021, compared with $2.72 million for the six months ended June 30, 2020.

Net cash used in investing activities was $15.81 million for the six months ended June 30, 2021, 2020, compared with $78.86 million for the six months ended June 30, 2020.

Net cash provided by financing activities was $23.10 million for the six months ended June 30, 2021, compared with $80.24 million the six months ended June 30, 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 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. 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 XiaoEmail:tina.xiao@ascent-ir.comTel: +1 917 609 0333

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31, 2021 2020

ASSETS

Current Assets

Cash $ 6,896,515 $ 2,700,013

Accounts receivable, net 2,523 -

Loans receivable from third parties 59,504,874 18,432,691

Prepayments 5,115,092 -

Due from related parties 20,366,043 55,839,045

Inventory 883,961 -

Other current assets 728,738 1,310,562

Total current assets 93,497,746 78,282,311

Property and equipment, net 2,205 -

Goodwill 70,088,377 69,322,325

Intangible assets 22,999,116 19,573,846

Total noncurrent assets 93,089,698 88,896,171

Total Assets $ 186,587,444 $ 167,178,482

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable $ 2,301,057 $ -

Advances from customers 10,995,818 9,214,369

Third party loan payables 1,996,533 -

Due to related parties 1,349,180 7,346,021

Bank borrowings 1,300,068 1,653,247

Income tax payable 6,703,087 5,460,631

Convertible notes 5,219,360 -

Acquisition payable - 15,384,380

Other current liabilities 2,930,193 3,197,147

Total Current Liabilities 32,795,296 42,255,795

Deferred tax liabilities 4,535,242 4,893,461

Total Non-current Liabilities 4,535,242 4,893,461

Total Liabilities 37,330,538 47,149,256

Commitments and Contingencies (Note 12)

Equity

Common stock (par value $0.001 per share, 100,000,000 shares authorized;97,043,566 and 79,131,207 shares issued and outstanding at June 30, 2021 97,044 79,131and December 31, 2020, respectively)

Additional paid-in capital 181,174,696 151,407,253

Statutory reserve 913,292 913,292

Accumulated deficit (41,876,191) (39,255,945)

Accumulated other comprehensive loss 8,948,065 6,885,495

Total Equity 149,256,906 120,029,226

Total Liabilities and Equity $ 186,587,444 $ 167,178,482

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVEINCOME (LOSS)

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

For the Three Months Ended For the Six Months Ended June 30, June 30,

2021 2020 2021 2020

Revenues

- Sales of commodity products - related parties $ 1,523,616 $ 1,563,669 $ 21,926,631 $ 2,617,301

- Sales of commodity products - third parties 57,989,381 - 67,022,848

- Supply chain management services - related parties 26,949 70,596

- Supply chain management services - third parties 326,650 351,793 472,425 460,630

Total Revenue 59,839,647 1,942,411 89,421,904 3,148,527

Cost of revenue

- Commodity product sales-related parties (1,531,336) (1,369,669) (21,917,517) (1,256,218)

- Commodity product sales-third parties (57,932,603) (200,679) (66,965,015) (1,369,669)

- Supply chain management services - related parties - - -

- Supply chain management services - third parties (2,592) (7,633) (3,642) (7,954)

Total cost of revenue (59,466,531) (1,577,981) (88,886,174) (2,633,841)

Gross profit 373,116 364,430 535,730 514,686

Operating expenses

Selling, general, and administrative expenses (2,054,354) (439,128) (3,624,733) (740,825)

Total operating cost and expenses (2,054,354) (439,128) (3,624,733) (740,825)

Other income (expenses), net

Interest income 2,946,236 1,804,743 5,045,093 1,884,923

Interest expenses (155,825) (31,610) (283,248) (54,480)

Share-based payment for service - - (1,695,042) -

Amortization of beneficial conversion feature relating to - (3,400,000) - (3,400,000)issuance of convertible notes

Amortization of relative fair value of warrants relating to - (3,060,000) - (3,060,000)issuance of convertible notes

Other income (expense), net (379,924) - (386,358) -

Total other income (expenses), net 2,410,487 (4,686,867) 2,680,445 (4,629,557)

Net income (loss) from continuing operations before income 729,249 (4,761,565) (408,558) (4,855,696)taxes

Income tax expenses (371,393) (408,829) (771,862) (408,829)

Net income (loss) from continued operations, net of tax 357,856 (5,170,394) (1,180,420) (5,264,525)

Net loss from discontinued operations, net of tax - (292,091) - (552,445)

Net income (loss) 357,856 (5,462,485) (1,180,420) (5,816,970)

Less: Net loss attributable to non-controlling interests - 2,804 - 7,073

Net income (loss) attributable to TD Holdings, Inc.'s $ 357,856 (5,459,681) (1,180,420) (5,809,897)Stockholders

Comprehensive Income (Loss)

Net income (loss) $ 357,856 (5,462,485) (1,180,420) (5,816,970)

Foreign currency translation adjustment 2,706,148 (85,670) 2,062,570 (87,972)

Comprehensive income (loss) 3,064,004 (5,548,155) 882,150 (5,904,942)

Less: Total comprehensive income - attributable to - 2,804 - 7,073non-controlling interests

Comprehensive income (loss) attributable to TD Holdings, $ 3,064,064 (5,545,351) 882,150 (5,897,869)Inc.

Income (Loss) per share - basic and diluted

Continuing Operation- Income (loss) per share - Basic and (0.00) (0.11) (0.01) (0.17)diluted

Continuing Operation- Income (loss) per share - Diluted (0.00) - - -

Discontinuing Operation-Net loss per share -Basic and $ - (0.01) - (0.02)diluted

Weighted Average Shares Outstanding-Basic 96,821,039 47,486,210 95,025,014 30,579,616

Weighted Average Shares Outstanding- Diluted 102,312,155 - - -

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollar)

For the Six Months Ended June 30,

2021 2020

Cash Flows from Operating Activities:

Net loss $ (1,180,420) (5,816,970)

Less: Net income (loss) from discontinued operations - (552,445)

Net income (loss) from continuing operations - (5,264,525)

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

Amortization of intangible assets 1,895,871 -

Depreciation of fixed assets 130 -

Amortization of discount on convertible notes 163,333 -

Amortization of right of use assets - 146,890

Amortization of beneficial conversion feature relating to issuance of - 3,400,000convertible notes

Amortization of relative fair value of warrants relating to issuance of - 3,060,000convertible notes

Share-based payment for service 1,695,042 -

Standstill fee relating to convertible notes 356,934 -

Interest expense for convertible notes 199,093 -

Deferred tax liabilities (411,736) -

Changes in operating assets and liabilities:

Other current assets 601,683 (138,596)

Account receivables (2,520) (1,927,299)

Inventory (882,764) -

Prepayments (5,108,162) (2,843,373)

Advances from customers 1,677,349 63,976

Accounts payable 2,297,940 -

Due to related parties (5,518,273) (300,549)

Due from related parties (457,032) -

Income tax payable 1,175,327 408,829

Other current liabilities (297,177) 820,815

Lease liabilities - (166,242)

Net cash provided by (used in) operating activities from continuing (3,789,382) (2,740,074)operations

Net cash provided by operating activities from discontinued operations - 19,213

Net cash provided by (used in) operating activities (3,789,382) (2,720,861)

Cash Flows from Investing Activities:

Purchases of intangible assets (5,100,490) -

Purchases of fixed assets (2,332) -

Final payment of acquisition of a subsidiary (15,533,312) -

Payment made on loan to related parties (7,174,955) -

Payment made on loans to third parties (45,057,871) (78,559,027)

Collection of loans from related parties 43,687,593 -

Collection of loans from third parties 13,370,395 -

Net cash used in investing activities from continuing operations (15,810,972) (78,559,027)

Net cash used in investing activities from discontinued operations - (300,711)

Net cash used in investing activities (15,810,972) (78,859,738)

Cash Flows from Financing Activities:

Proceeds from issuance of common stock under ATM transaction 2,192,989 -

Proceeds from issuance of common stock under private placement transactions 24,450,000 13,500,000

Proceeds from exercise of warrants 7,500 36,000,000

Proceeds from issuance of convertible promissory notes 4,500,000 30,000,000

Proceeds from borrowings from related parties 1,121,770

Proceeds from borrowings from third parties 1,993,828 -

Repayments made on loans to related parties (550,930) -

Payments made on loans to third parties (9,496,586) -

Net cash provided by financing activities from continuing operations 23,096,801 80,621,770

Net cash used in financing activities from discontinuing operations - (381,554)

Net cash provided by financing activities 23,096,801 80,240,216

Effect of exchange rate changes on cash and cash equivalents 700,055 381,294

Net increase/(decrease)in cash and cash equivalents 4,196,502 (959,089)

Cash at beginning of period 2,700,013 2,446,683

Cash at end of period $ 6,896,515 1,487,594

Less: Cash from discontinued operations - 84

Cash from continuing operations 6,896,515 1,487,510

Supplemental Cash Flow Information

Cash paid for interest expense - -

Cash paid for income tax $ 75,416 $ -

Supplemental disclosure of Non-cash investing and financing activities

Right-of-use assets obtained in exchange for operating lease obligations $ - $ 455,635

Issuance of common stocks in connection with conversion of convertible notes $ - $ 30,000,000

Issuance of common stocks in connection with private placements, net of $ - $ 1,600,000issuance costs with proceeds collected in advance in November 2019

Issuance of common stocks in connection with warrant cashless exercise in $ 1,439,826 $ -March 2021

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SOURCE TD Holdings, Inc.