SHENZHEN, China, Nov. 10, 2022 /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, 2022.

Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "The third quarter of fiscal year 2022 was challenging, we faced dynamic macro environment and uncertainty related to the resurgence of COVID-19 in China. However, we believe that we are on track to achieving our expansion targets by executing our strategies and keeping explore growth opportunities. We expect to implement several initiatives to increase our brand awareness and extend our market presence in the commodities trading market. We will continue providing valuable services to our customers, managing expenses prudently, improving our operating efficiency, and expanding our customer acquisition channels. In the remaining of 2022, we will strive to expand our capabilities to serve our customers, grow our business, deliver long-term growth and generate long-term shareholder value."

Financial Highlights

In the quarter ended September 30, 2022

Total revenue was $37.89 million, consisting of $37.85 million from sales of commodity products, and $0.04 million from supply chain management services for the quarter ended September 30, 2022, a decrease of 31% from $54.77 million for the same quarter ended September 30, 2021.
Net income was $1.30 million, compared with $0.46 million for the same quarter ended September 30, 2021.
Basic and diluted earnings per share were $0.02, compared with $0.02 for the same quarter ended September 30, 2021.

In the nine months ended September 30, 2022

Total revenue was $139.73 million, consisting of $138.54 million from sales of commodity products, and $1.19 million from supply chain management services for the nine months ended September 30, 2022, a decrease of 3% from $144.20 million for the same period ended September 30, 2021.
Net income was $4.32 million, as compared with net loss of $0.72 million for the same period ended September 30, 2021.
Basic and diluted earnings per share were $0.09 and $0.08, respectively, compared with $0.04 and $0.03, respectively for the same period ended September 30, 2021.

Financial Results

In the three months ended September 30, 2022

Revenues

For the three months ended September 30, 2022, the Company sold non-ferrous metals to 25 customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $37.85 million from sales of commodity products for the three months ended September 30, 2022, compared with $52.73 million from sales of commodity products for the three months ended September 30, 2021, among which, $1.37 million was generated from the related parties.

For the three months ended September 30, 2022, the Company earned revenue of $0.04 million from supply chain management services to third-party customers, compared with $2.04 million to third-party customers for the three months ended September 30, 2021.

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 $14.79 million, or 28% to $38.01 million for the three months ended September 30, 2022, from $52.80 million for the three months ended September 30, 2021, primarily due to a decrease of $13.35 million in cost of revenue associated with commodity product sales from the third parties. The decreased cost of revenue is in line with the decrease in revenue.

Selling, general, and administrative expenses

Selling, general and administrative expenses decreased by $0.27 million or 12%, to $1.95 million for the three months ended September 30, 2022, from $2.23 million for the three months ended September 30, 2021. 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. Selling, general and administrative expenses for the three months ended September 30, 2022 mainly included: (1) amortization of intangible assets of $0.95 million, (2) amortization of discount of convertible promissory notes of $0.14 million, and (3) salary of $0.51 million.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $2.85 million or 158%, to $4.66 million for the three months ended September 30, 2022, from $1.81 million for the three months ended September 30, 2021. The increase was due to loans made to third-party vendors for the three months ended September 30, 2022.

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

For the three months ended September 30, 2022, the item represented the amortization of beneficial conversion feature of $0.37 million and relating to the convertible promissory notes, and $0.62 million for the three months ended September 30, 2021.

Net income

Net income was $1.30 million for the three months ended September 30, 2022, compared with $0.46 million for the three months ended September 30, 2021.

In the nine months ended September 30, 2022

Revenues

For the nine months ended September 30, 2022, the Company sold non-ferrous metals to 25 third-party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $138.54 million from sales of commodity products for the nine months ended September 30, 2022, compared with $141.68 million for the nine months ended September 30, 2021.

For the nine months ended September 30, 2022, the Company earned commodity distribution commission fees of $1.19 million from third-party vendors, compared with $2.52 million from third-party vendors for the nine months ended September 30, 2021.

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 $2.83 million, or 2% to $138.85 million for the nine months ended September 30, 2022, from $141.69 million for the nine months ended September 30, 2021, primarily due to a decrease of $2.82 million in cost of revenue associated with commodity product sales. The decreased cost of revenue is in line with the decrease in sales volume.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $0.23 million or 4%, to $6.08 million for the nine months ended September 30, 2022, from $5.85 million for the nine months ended September 30, 2021. 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. Selling, general and administrative expenses mainly consisted of: (1) amortization of intangible assets of $2.97 million, (2) amortization of discount on convertible promissory notes of $0.35 million, and (3) salary of $1.35 million.

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $6.56 million or 96%, to $13.42 million for the nine months ended September 30, 2022, from $6.85 million for the nine months ended September 30, 2021. The increase was primarily due to a lot of growth of loans made to third-party vendors for the nine months ended September 30, 2022.

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 five 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, 2022, no such expenses were incurred.

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

For the nine months ended September 30, 2022, the item represented the amortization of beneficial conversion feature of $0.90 million of three convertible promissory notes issued on March 4, 2021, October 4, 2021 and May 6, 2022.

For the nine months ended September 30, 2021, the item represented the amortization of beneficial conversion feature of $0.62 million of two convertible promissory notes issued on January 6, 2021 and March 4, 2021.

Net income (loss)

Net income was $4.32 million for the nine months ended September 30, 2022, compared with net loss of $0.72 million for the nine months ended September 30, 2021.

Nine Months Ended September 30, 2022 Cash Flows

As of September 30, 2022, the Company had cash and cash equivalents of $2.68 million, as compared with $4.31 million as of December 31, 2021.

Net cash provided by operating activities was $3.60 million for the nine months ended September 30, 2022, compared with $0.94 million for the nine months ended September 30, 2021.

Net cash used in investing activities was $63.25 million for the nine months ended September 30, 2022, compared with $62.21 million for the nine months ended September 30, 2021.

Net cash provided by financing activities was $59.89 million for the nine months ended September 30, 2022, compared with $62.13 million for the nine months ended September 30, 2021.

About TD Holdings, Inc.

TD Holdings, Inc. is a service provider currently engaging in commodities 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. 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 September 30, 2022 and December 31, 2021
(Expressed in U.S. dollars, except for the number of shares)

	September 30, 2022		December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	2,684,644	$	4,311,068
Loans receivable from third parties		171,909,479		115,301,319
Prepayments		5,294		-
Due from related parties		301,624		11,358,373
Other current assets		4,873,054		3,288,003
Inventories		469,486		-
Total current assets		180,243,581		134,258,763

Non-Current Assets
Plant and equipment, net		3,524		2,872
Goodwill		63,784,194		71,028,283
Intangible assets, net		16,327,667		21,257,337
Right-of-use assets, net		622,930		888,978
Total non-current assets		80,738,315		93,177,470

Total Assets	$	260,981,896	$	227,436,233

LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	1,073,122	$	3,337,758
Bank borrowings		985,943		1,129,288
Third party loans payable		445,852		476,779
Contract liabilities		-		5,221,874
Due to related parties		-		21,174
Income tax payable		10,549,449		8,441,531
Lease liabilities		295,402		310,665
Other current liabilities		5,161,205		4,297,793
Convertible promissory notes		4,458,881		3,562,158
Total current liabilities		22,969,854		26,799,020

Non-Current Liabilities
Deferred tax liabilities		3,189,289		4,178,238
Lease liabilities		346,456		586,620
Total non-current liabilities		3,535,745		4,764,858

Total liabilities		26,505,599		31,563,878

Commitments and Contingencies (Note 16)

Equity
Common stock (par value $0.001 per share, 600,000,000 shares authorized; 55,403,026 and 27,634,830 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)*		55,403		27,635
Additional paid-in capital		285,648,331		224,900,948
Statutory surplus reserve		1,477,768		1,477,768
Accumulated deficit		(37,877,553)		(42,200,603)
Accumulated other comprehensive (loss) income		(14,827,652)		11,666,607
Total Equity		234,476,297		195,872,355

Total Liabilities and Equity	$	260,981,896	$	227,436,233

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

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues
- Sales of commodity products – third parties	$	37,847,831	$	51,364,489	$	138,540,090	$	118,387,337
- Sales of commodity products – related parties		-		1,365,823		-		23,292,454
- Supply chain management services - third parties		40,724		2,043,494		1,190,976		2,515,919
Total Revenues		37,888,555		54,773,806		139,731,066		144,195,710

Cost of revenue
- Commodity product sales - third parties		(38,008,016)		(51,358,653)		(138,848,770)		(118,323,668)
- Commodity product sales - related parties		-		(1,429,486)		-		(23,347,003)
- Supply chain management services - third parties		(321)		(11,913)		(6,011)		(15,555)
Total cost of revenue		(38,008,337)		(52,800,052)		(138,854,781)		(141,686,226)

Gross profit		(119,782)		1,973,754		876,285		2,509,484

Operating expenses
Selling, general, and administrative expenses		(1,951,604)		(2,226,398)		(6,075,090)		(5,851,131)
Share-based payment for service		-		(141,400)		-		(1,836,442)
Total operating expenses		(1,951,604)		(2,367,798)		(6,075,090)		(7,687,573)

Other income (expenses), net
Interest income		4,659,595		1,809,398		13,416,254		6,854,491
Interest expenses		(149,308)		100,294		(388,750)		(182,954)
Amortization of beneficial conversion feature relating to issuance of convertible promissory notes		(365,125)		(619,025)		(898,783)		(619,025)
Other income (expense), net		104,961		251,014		(21,283)		(135,344)
Total other income, net		4,250,123		1,541,681		12,107,438		5,917,168

Net income before income taxes		2,178,737		1,147,637		6,908,633		739,079

Income tax expenses		(874,815)		(690,022)		(2,585,583)		(1,461,884)

Net income (loss)	$	1,303,922	$	457,615	$	4,323,050	$	(722,805)

Comprehensive Income (Loss)
Net income (loss)	$	1,303,922	$	457,615	$	4,323,050	$	(722,805)
Foreign currency translation adjustments		(13,816,878)		(605,379)		(26,494,259)		1,457,191
Comprehensive income (loss)	$	(12,512,956)	$	(147,764)	$	(22,171,209)	$	734,386

Income (Loss) per share - basic and diluted
Income (loss) per share- basic	$	0.02	$	0.02	$	0.09	$	(0.04)
Income (loss) per share- diluted	$	0.02	$	0.02	$	0.08	$	(0.03)

Weighted Average Shares Outstanding-Basic		55,158,053		20,418,262		45,911,817		19,481,266

Weighted Average Shares Outstanding-Diluted		61,207,271		21,724,389		51,961,035		20,787,393

TD HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollar)

	For the Nine Months Ended September 30,
	2022		2021
Cash Flows from Operating Activities:
Net income (loss)	$	4,323,050	$	(722,805)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of property and equipment		4,503		331
Amortization of right of use assets		248,475		-
Amortization of intangible assets		2,967,735		2,905,932
Amortization of discount on convertible promissory notes		354,333		354,000
Monitoring fee relating to convertible promissory notes		157,276		-
Interest expense for convertible promissory notes		341,482		300,108
Standstill fee relating to convertible promissory notes		-		356,934
Deferred tax liabilities		(604,813)		(617,582)
Share-based payment for service		-		1,836,442
Amortization of beneficial conversion feature relating to issuance of convertible promissory notes		898,783		619,025
Changes in operating assets and liabilities:
Other current assets		74,164		1,268,574
Inventories		(504,519)		-
Prepayments		(5,689)		-
Due from related parties		(517,471)		(385,132)
Due from third parties		(1,239,339)		(1,589,463)
Accounts payable		(2,067,808)		-
Contract liabilities		(5,039,217)		(1,028,785)
Due to related parties		(20,433)		(5,497,309)
Income tax payable		3,190,730		2,070,616
Other current liabilities		1,202,550		607,774
Lease liabilities		(178,203)		-
Due to third party loans payable		19,019		463,271
Net Cash Provided by Operating Activities		3,604,608		941,931

Cash Flows from Investing Activities:
Purchases of intangible assets		-		(5,100,306)
Purchases of plant and equipment		(5,449)		(2,603)
Purchases of operating lease assets		(58,617)		-
Final payment of acquisition of a subsidiary		-		(15,532,750)
Payment made on loans to related parties		(301,624)		-
Payment made on loans to third parties		(77,227,957)		(99,030,244)
Collection of loans from third parties		3,758,759		13,463,633
Collection of loans from related parties		10,637,336		44,399,732
Investments in other investing activities		(51,192)		(410,536)
Net Cash Used in by Investing Activities		(63,248,744)		(62,213,074)

Cash Flows from Financing Activities:
Repayments of borrowings to related parties		-		(1,896,122)
Payments of borrowings to the third parties		(30,272)		(556,397)
Proceeds from issuance of common stock under ATM		-		2,192,989
Proceeds from issuance of common stock under private placement transactions		56,920,000		57,877,941
Proceeds from convertible promissory notes		3,000,000		4,500,000
Proceeds from exercise of warrants		-		7,500
Net Cash Provided by Financing Activities		59,889,728		62,125,911

Effect of exchange rate changes on cash and cash equivalents		(1,872,016)		736,609

Net (decrease) increase in cash and cash equivalents		(1,626,424)		1,591,377
Cash at beginning of period		4,311,068		2,700,013
Cash at end of period	$	2,684,644	$	4,291,390

Supplemental Cash Flow Information
Cash paid for interest expense	$	63,752	$	-
Cash paid for income tax	$	1,712	$	75,416

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	$	3,855,150	$	-
Issuance of common stocks in connection with warrant cashless exercise in March 2021	$	-	$	1,439,826

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SOURCE TD Holdings, Inc.

TD Holdings, Inc. Reports Third Quarter 2022 Financial Results