PR Newswire | Nov 15, 2021 08:01AM EST

11/15 07:00 CST

TD Holdings, Inc. Reports Third Quarter 2021 Financial Results SHENZHEN, China, Nov. 15, 2021

Revenue up 697% Year-over-year

SHENZHEN, China, Nov. 15, 2021 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company"), a commodities trading service provider in China, today announced its financial results for the third quarter ended September 30, 2021.

Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "We are pleased to report our financial results for the third quarter of fiscal year 2021. Our revenue increased by 697% to $54.77 million for the third quarter of fiscal year 2021 as compared to the same quarter of last year. During the third quarter, we have entered into a new strategic alliance with Jinyibao International Technology Company Limited to step into the global gold spot trading market, which is expected to enrich our commodity trading platforms, expand the scale of the platforms, and open up a new profit growth point. We have also established a partnership with Guangzhou Wensheng Blockchain Technology Co., Ltd. to target the tremendous market potential of blockchain in the supply chain financing and digital cloud warehouse business. In addition, we have entered into strategic cooperation with Guangdong Enterprise Investment Promotion Association to develop our lightweight new materials business. Looking forward, we believe these moves will allow us to execute our lead strategy and effectively drive long-term growth."

Financial Highlights

In the quarter ended September 30, 2021

* Revenue from commodities trading business was $54.77 million, consisting of $52.73 million from sales of commodities products, and $2.04 million from supply chain management services for the quarter ended September 30, 2021, an increase of 697% from $6.87 million for the same quarter ended September 30, 2020. * Net income from continuing operation was $0.46 million, as compared with $3.54 million for the same quarter ended September 30, 2020. Net income was $0.46 million, as compared with $0.55 million for the same quarter ended September 30, 2020. * Basic and diluted earnings per share from continuing operations was $nil, compared with $0.06 for the same quarter ended September 30, 2020. Basic and diluted earnings per share was $nil, compared with $0.01 for the same period ended September 30, 2020.

In the nine months ended September 30, 2021

* Revenue from commodities trading business was $144.20 million, consisting of $141.68 million from sales of commodities products, and $2.52 million from supply chain management services for the nine months ended September 30, 2021, an increase of 1339% from $10.02 million for the same period ended September 30, 2020. * Net loss from continuing operation was $0.72 million, as compared with $1.73 million for the same period ended September 30, 2020. Net loss was $0.72 million, as compared with $5.27 million for the same period ended September 30, 2020. * Basic and diluted loss per share from continuing operations was $0.01, compared with $0.03 for the same period ended September 30, 2020. Basic and diluted loss per share was $0.01, compared with $0.12 for the same period ended September 30, 2020.

Financial Results

In the three months ended September 30, 2021

Revenues

For the three months ended September 30, 2021, the Company sold non-ferrous metals to twelve customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $52.73 million from sales of commodity products for the three months ended September 30, 2021, among which, $1.37 million generated from the related party, compared with $0.96 million from sales of commodity products for the three months ended September 30, 2020.

For the three months ended September 30, 2021, the Company earned commodity distribution commission fees of $2.04 million from twenty-two third-party customers and the Company earned commodity distribution commission fees of $1.15 million and $2.04 million from facilitating such sales transactions with three third party customers and three related party customers for the three months ended September 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the three months ended September 30, 2021, the Company purchased non-ferrous metal products of $51.36 million from eleven third party vendors and $1.43 million from one related party vendors, compared with $3.61 million from two related party vendors for the three months ended September 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $1.93 million or 622%, to $2.23 million for the three months ended September 30, 2021, from $0.29 million for the three months ended September 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 amortization of intangible assets of $1.01 million and amortization of convertible notes of $0.19 million for the three months ended September 30,2021 while no such issuance for the three months ended September 30, 2020.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income decreased by $0.03 million or 1%, to $1.81 million for the three months ended September 30, 2021, from $1.84 million for the three months ended September 30, 2020.

Net income from continuing operations

Net income from continuing operations was $0.46 million for the three months ended September 30, 2021, compared with $3.54 million for the three months ended September 30, 2020.

Net income

Net income was $0.46 million for the three months ended September 30, 2021, compared with $0.55 million for the three months ended September 30, 2020.

In the nine months ended September 30, 2021

Revenues

For the nine months ended September 30, 2021, the Company sold non-ferrous metals to three related party customers and twenty-one third party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $141.68 million from sales of commodity products for the nine months ended September 30, 2021, compared with $6.30 million for the nine months ended September 30, 2020.

For the nine months ended September 30, 2021, the Company earned commodity distribution commission fees of $2.52 million from third party vendors, compared with commission fees of $2.11 million from six third party customers and distribution service fees of $1.61 million from three related party customer for the nine months ended September 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the nine months ended September 30, 2021, the Company purchased non-ferrous metal products of $118.32 million from twenty-one third party vendors and $23.35 million from eight related party vendors, compared with $1.46 million from one third party vendor and $4.87 million from three related party vendors for the nine months ended September 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $4.82 million or 467%, to $5.85 million for the nine months ended September 30, 2021, from $1.03 million for the nine months ended September 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 amortization of intangible assets of $2.91 million and amortization of convertible notes of $0.35 million for the nine months ended September 30, 2021 while no such issuance for the three months ended September 30, 2020.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $3.12 million or 83%, to $6.85 million for the nine months ended September 30, 2021, from $3.74 million for the nine months ended September 30, 2020. The increase was primarily due to loans made to Yunfeihu for the three months ended September 30, 2021, for the nine months ended September 30, 2021, $3.80 million was attributed to related party and $3.06 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 nine months ended September 30, 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 nine months ended September 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 nine months ended September 30, 2021, the item represented the amortization of beneficial conversion feature of $619,025 of the two convertible notes issued on January 6, 2021 and on March 4, 2021.

For the nine months ended September 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.

Net loss from continuing operations

Net loss from continuing operations was $0.72 million for the nine months ended September 30, 2021, compared with $1.73 million for the nine months ended September 30, 2020.

Net loss

Net loss from was $0.72 million for the nine months ended September 30, 2021, compared with $5.27 million for the nine months ended September 30, 2020.

Nine months Ended September 30, 2021 Cash Flows

As of September 30, 2021, the Company had cash and cash equivalents of $4.29 million, as compared with $2.70 million as of December 31, 2020.

Net cash provided by operating activities from continuing operations was $0.94 million for the nine months ended September 30, 2021, compared with $3.07 million for the nine months ended September 30, 2020. Net cash provided by operating activities was $0.94 million for the nine months ended September 30, 2021, compared with $2.37 million for the nine months ended September 30, 2020.

Net cash used in investing activities was $62.21 million for the nine months ended September 30, 2021, compared with $83.14 million for the nine months ended September 30, 2020.

Net cash provided by financing activities was $62.13 million for the nine months ended September 30, 2021, compared with $81.05 million the nine months ended September 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

September 30, December 31, 2021 2020

ASSETS

Current Assets

Cash $ 4,291,390 $ 2,700,013

Loans receivable from third parties 103,932,909 18,432,691

Due from related parties 12,083,999 55,839,045

Other current assets 6,742,586 1,310,562

Total current assets 127,050,884 78,282,311

Property and equipment, net 2,266 -

Goodwill 69,826,845 69,322,325

Intangible assets 21,905,533 19,573,846

Total noncurrent assets 91,734,644 88,896,171

Total Assets $ 218,785,528 $ 167,178,482

LIABILITIES AND EQUITY

Current Liabilities

Advances from customers $ 8,255,056 $ 9,214,369

Bank borrowings 1,110,186 1,653,247

Third party loans payable 462,185 -

Due to related parties 22,878 7,346,021

Income tax payable 7,571,307 5,460,631

Other current liabilities 3,820,365 3,197,147

Convertible notes 2,574,624 -

Acquisition payable - 15,384,380

Total current liabilities 23,816,601 42,255,795

Deferred tax liabilities 4,312,941 4,893,461

Total noncurrent liabilities 4,312,941 4,893,461

Total liabilities 28,129,542 47,149,256

Equity (Deficit)

Common stock (par value $0.001 per share, 100,000,000 shares authorized;134,913,029 and 79,131,207 shares issued and outstanding at September 30, 134,913 79,1312021 and December 31, 2020, respectively)

Statutory reserve 913,292 913,292

Additional paid-in capital 222,683,671 151,407,253

Accumulated deficit (41,418,576) (39,255,945)

Accumulated other comprehensive income 8,342,686 6,885,495

Total Equity 190,655,986 120,029,226

Total Liabilities and Equity $ 218,785,528 $ 167,178,482

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

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

For the Three Months Ended For the Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Revenues

Commodity products - related parties $ 1,365,823 $ 958,108 $ 23,292,454 $ 3,575,409

Commodity products - third parties 51,364,489 2,722,836 118,387,337 2,722,836

Supply chain management services - related parties - 2,041,570 - 2,112,166

Supply chain management services - third parties 2,043,494 1,148,839 2,515,919 1,609,469

Total Revenues 54,773,806 6,871,353 144,195,710 10,019,880

Cost of revenue

Commodity product sales - related parties (1,429,486) (3,609,639) (23,347,003) (4,865,857)

Commodity product sales - third parties (51,358,653) (88,543) (118,323,668) (1,458,212)

Supply chain management services - third parties (11,913) (16,463) (15,555) (24,417)

Total Cost of revenue (52,800,052) (3,714,645) (141,686,226) (6,348,486)

Gross profit 1,973,754 3,156,708 2,509,484 3,671,394

Operating expenses

Selling, general, and administrative expenses (2,226,398) (292,080) (5,851,131) (1,032,660)

Share-based payment for service (141,400) - (1,836,442) -

Total operating expenses (2,367,798) (292,080) (7,687,573) (1,032,660)

Other income (expenses), net

Interest income 1,809,398 1,836,016 6,854,491 3,736,079

Interest expenses 100,294 (15,164) (182,954) (69,644)

Amortization of beneficial conversion feature relating (619,025) - (619,025) (3,400,000)to issuance of convertible notes

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

Other income (expense), net 251,014 - (135,344) -

Total other income (expenses), net 1,541,681 1,820,852 5,917,168 (2,793,565)

Net income (loss) from continuing operations before income 1,147,637 4,685,480 739,079 (154,831)taxes

Income tax expenses (690,022) (1,149,563) (1,461,884) (1,573,531)

Net income (loss) from continued operations, net of tax 457,615 3,535,917 (722,805) (1,728,362)

Net loss from discontinued operations, net of tax - (2,989,116) - (3,541,807)

Net income (loss) 457,615 546,801 (722,805) (5,270,169)

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

Net income (loss) attributable to TD Holdings, Inc.'s $ 457,615 $ 546,801 $ (722,805) $ (5,263,096)Stockholders

Comprehensive Income (Loss)

Net income(loss) $ 457,615 $ 546,801 $ (722,805) $ (5,270,169)

Foreign currency translation adjustment (605,379) 3,515,011 1,457,191 3,427,039

Comprehensive income (loss) $ (147,764) $ 4,061,812 $ 734,386 $ (1,843,130)

Less: Total comprehensive loss attributable to - - - 7,073non-controlling interests

Comprehensive income (loss) attributable to TD Holdings, $ (147,764) $ 4,061,812 $ 734,386 $ (1,836,057)Inc.

Earnings (loss) per share- basic 0.00 0.01 (0.01) (0.12)

Earnings (loss) per share- diluted 0.00 0.01 (0.01) (0.12)

Earnings (loss) per share continuing - basic and diluted 0.00 0.06 (0.01) (0.03)

Earnings (loss) per share discontinued - basic and diluted - (0.05) - (0.09)

Weighted Average Shares Outstanding-Basic 102,091,312 58,625,143 97,406,331 43,695,789

Weighted Average Shares Outstanding-Diluted 108,621,947 58,625,143 103,936,966 43,695,789

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollar)

For the Nine Months Ended September 30,

2021 2020

Cash Flows from Operating Activities:

Net (loss) income $ (722,805) $ (5,270,169)

Net loss from discontinued operations - 3,541,807

Net (loss) income from continuing operations (722,805) (1,728,362)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation of property and equipment 331 -

Amortization of right of use assets - 222,840

Amortization of intangible assets 2,905,932 -

Amortization of beneficial conversion feature of convertible notes 354,000 -

Interest expense for convertible notes 300,108 -

Standstill fee relating to convertible notes 356,934 -

Deferred tax liabilities (617,582) -

Share-based payment for service 1,836,442 -

Amortization of beneficial conversion feature relating to issuance of 619,025 3,400,000convertible notes

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

Changes in operating assets and liabilities:

Other current assets 1,268,574 (139,114)

Escrow account receivable - (369,552)

Prepayments - (5,282,703)

Due from related parties (385,132) -

Due from third parties (1,589,463) -

Advances from customers (1,028,785) 1,843,990

Due to related parties (5,497,309) 296,611

Income tax payable 2,070,616 1,573,531

Other current liabilities 607,774 439,422

Lease liabilities - (244,104)

Due to third party loans payable 463,271 -

Net Cash Used in Operating Activities from continuing operations 941,931 3,072,559

Net Cash Used in Operating Activities from discontinued operations - (700,039)

Net Cash Used in Operating Activities 941,931 2,372,520

Cash Flows from Investing Activities:

Purchases of intangible assets (5,100,306) -

Purchases of property and equipment (2,603) -

Final payment of acquisition of a subsidiary (15,532,750) -

Payment made on loans to related parties - (4,826,640)

Payment made on loans to third parties (99,030,244) (157,087,880)

Collection of loans from third parties 13,463,633 74,999,934

Collection of loans from related parties 44,399,732 3,404,953

Investments in other investing activities (410,536) -

Net Cash Used in Investing Activities from continuing operations (62,213,074) (83,509,633)

Net Cash Used in Investing Activities from discontinued operations - 368,612

Net Cash Used in by Investing Activities (62,213,074) (83,141,021)

Cash Flows from Financing Activities:

Proceeds from third party borrowings - 1,558,595

Repayments of borrowings to related parties (1,896,122) -

Payments of borrowings to the third parties (556,397) -

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

Proceeds from issuance of common stock under private placement transactions 57,877,941 13,500,000

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

Proceeds from exercise of warrants 7,500 36,369,552

Net Cash Used in Financing Activities from continuing operations 62,125,911 81,428,147

Net Cash Used in Financing Activities from discontinued operations - (381,554)

Net Cash Used in by Financing Activities 62,125,911 81,046,593

Effect of exchange rate changes on cash and cash equivalents 736,609 912,189

Net increase(decrease) in cash and cash equivalents 1,591,377 1,190,281

Cash at beginning of period 2,700,013 1,777,276

Cash at end of period $ 4,291,390 $ 2,967,557

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 private placements, net ofissuance $ - $ 1,600,000costs with proceeds collected in advance in November 2019

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

Issuance of common stocks in connection with private placements, net ofissuance $ - $ 5,000,000costs with proceeds uncollected

Issuance of common stocks in connection with cashless exercise of 1,502,022 $ - $ 868,530warrants

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

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SOURCE TD Holdings, Inc.