QINGDAO, China, April 29, 2022 /PRNewswire/ -- TDH Holdings, Inc. (NASDAQ:PETZ) ("TDH" or the "Company"), a PRC-based company that specializes in the development, manufacturing and sales of pet food products in China and beyond, announced today its financial results for the twelve months ended December 31, 2021.
Full Year 2021 Financial Highlights:
For the Twelve Months Ended December 31, | |||||||
($ millions, except per share data) | 2021 | 2020 | % Change | ||||
Revenues | $1.09 | $0.82 | 33.94% | ||||
Gross loss | ($0.02) | ($0.04) | 50.82% | ||||
Gross loss margin | -1.88% | -5.13% | 3.19 pp* | ||||
Loss from operations | ($4.61) | ($1.93) | 121.11% | ||||
Operating loss margin | -422.58% | -236.25% | -153.76 pp* | ||||
Net loss attributable to | ($6.12) | ($0.87) | -498.21% | ||||
Loss per share - basic and | ($0.10) | ($0.02) | -150.00% | ||||
* pp: percentage points
| |||||||
- Revenues increased by 33.94% from $0.82 million in fiscal year 2020 to $1.09 million in fiscal year 2021, our sales of pet food decreased from approximately $0.82 million in fiscal year 2020 to approximately $0.49 million in fiscal year 2021, or by approximately 40.5%, which was offset by an increase in revenue from our newly acquired restaurant business in Kansas by approximately $0.61 million. The decrease of pet food revenue in 2021 was mainly due to: (1) the continuous development of COVID-19, we had to close a factory and stop production for a period of time again in 2021, which caused the delay of orders and some customers canceled their orders, decreasing our pet food sales revenue and sales volume; (2) the cost of raw materials required for pet food production has risen to a certain extent due to the COVID-19 pandemic and general inflation, which led to our reduced production and sales of pet food products during 2021; and (3) we declined taking orders that were historically unprofitable. As a result, our pet food sales volume significantly decreased in 2021 as compared to 2020. On the other side, on October 31, 2021, we acquired a 51% equity interests of Far Ling's Inc. and 100% equity interests of Bo Ling's Chinese Restaurant, Inc. This resulted in an increase of $0.6 million in revenue from our restaurant business operations segment.
- Gross loss was $0.02 million in fiscal year 2021 as compared to gross loss of $0.04 million in fiscal year 2020. The decrease in gross loss was a result of declining to take historically unprofitable orders, and new profits generated from our restaurant business operations segment.
- Operating loss was $4.61 million in fiscal year 2021 as compared to an operating loss of $1.93 million in fiscal year 2020. The continuous deficit from operations was mainly due to the fact that our pet food sales revenue continued to decrease, while we continued to incur fixed overhead costs and high operating expenses during fiscal year 2021.
- Net loss attributable to common stockholders was $6.12 million, or a loss per share of $0.10, for the fiscal year 2021 as compared to net loss of $0.87 million, or a loss per share of $0.02, for fiscal year 2020.
Full Year 2021 Financial Results
Revenues
The Company's revenue sources include pet food sales and restaurant business operations. Pet food sales mainly include sales for pet chews, dried pet snacks and wet canned pet foods in overseas markets, domestic markets and by e-commerce. We started to generate revenue from restaurant business operations in the last quarter of fiscal year 2021. Total revenues increased by 33.94% from $0.82 million in fiscal year 2020 to $1.09 million in fiscal year 2021, our sales of pet food have decreased from approximately $0.82 million in fiscal year 2020 to $0.49 million in fiscal year 2021, or by approximately 40.5%, offset by an increase in revenue from our newly acquired restaurant business by approximately $0.61 million. The decrease of pet food revenue in fiscal year 2021 was mainly due to: (1) the continuous development of COVID-19, as we had to close a factory and stop production again for a period of time in 2021, which caused the delay of orders and some customers canceled their orders, decreasing our pet food sales revenue and sales volume; (2) the cost of raw materials required for pet food production has risen to a certain extent due to the COVID-19 pandemic and general inflation, which led to our reduced production and sales of pet food products during fiscal year 2021; and (3) we declined taking orders that were historically unprofitable. As a result, our pet food sales volume significantly decreased in 2021 as compared to 2020. On the other side, on October 31, 2021, we acquired 51% equity interests of Far Ling's Inc. and 100% equity interests of Bo Ling's Chinese Restaurant, Inc., located in Kansas. This resulted in an increase of $0.6 million in food service revenue from our restaurant business operations segment.
For the Twelve Months Ended December 31, | |||||||||||||||||||
2021 | 2020 | Y/Y Change | |||||||||||||||||
Revenues | % of | Revenues | % of | Amount | % | ||||||||||||||
Overseas | $ | 135 | 12.35% | $ | 226 | 27.77% | $ | (91) | -40.41% | ||||||||||
Domestic | 319 | 29.22% | 575 | 70.52% | (256) | -44.50% | |||||||||||||
E-commerce | 35 | 3.17% | 17 | 2.05% | 18 | 107.03% | |||||||||||||
Restaurant | 606 | 55.54% | - | - | 606 | 100.00% | |||||||||||||
less: sales | (3) | -0.29% | (3) | -0.34% | - | 11.90% | |||||||||||||
Total | $ | 1,092 | 100.0% | $ | 815 | 100.0% | $ | 277 | -33.94% | ||||||||||
Overseas sales decreased by $0.09 million, or 40.41%, to $0.14 million for the fiscal year 2021 from $0.23 million for fiscal year 2020. Domestic sales decreased by $0.25 million, or 44.50%, to $0.32 million for the fiscal year 2021 from $0.57 million for fiscal year 2020. The decrease of pet food revenue in fiscal year 2021 was mainly due to (1) the continuous development of COVID-19, as we had to close a factory and stop production again for a period of time in 2021, which caused the delay of orders and some customers canceled their orders, decreasing our pet food sales revenue and sales volume; (2) the cost of raw materials required for pet food production has risen to a certain extent due to the COVID-19 pandemic and general inflation, which led to our reduced production and sales of pet food products during 2021; and (3) we declined taking orders that were historically unprofitable. Sales from the e-commerce channel increased by $0.01 million, or 107.03%, to $0.03 million for the year of 2021 from $0.02 million for 2020, due to the increased promotion of our products through e-commerce channels. In addition, on October 31, 2021, we acquired 51% equity interests of Far Ling's Inc. and 100% equity interests of Bo Ling's Chinese Restaurant, Inc. This resulted in an increase of $0.61 million in restaurant business operations revenue.
For the Twelve Months Ended December 31, | |||||||||||||||||
2021 | 2020 | Y/Y Change | |||||||||||||||
Revenues | % of | Revenues | % of | Amount | % | ||||||||||||
Pet chews | $ | 46 | 4.22% | $ | 59 | 7.25% | $ | (13) | -21.97% | ||||||||
Dried pet | 293 | 26.86% | 318 | 38.94% | (24) | -7.58% | |||||||||||
Wet canned pet | 11 | 0.99% | 84 | 10.32% | (73) | -87.21% | |||||||||||
Dental health | 6 | 0.56% | 20 | 2.44% | (14) | -69.23% | |||||||||||
Baked pet | - | - | 3 | 0.38% | (3) | -100.00% | |||||||||||
Restaurant | 606 | 55.54% | - | - | 606 | 100.00% | |||||||||||
Others | 132 | 12.11% | 334 | 41.01% | (202) | -60.46% | |||||||||||
Less: sales tax | (3) | -0.29% | (3) | -0.34% | - | 11.90% | |||||||||||
Total | $ | 1,092 | 100.00% | $ | 815 | 100.00% | $ | (277) | 33.94% | ||||||||
Sales of pet chews decreased by $0.01 million, or 21.97%, to $0.05 million for fiscal year 2021 from $0.06 million for fiscal year 2020. Sales of dried pet snacks decreased by $0.03 million, or 7.58%, to $0.29 million for fiscal year 2021 from $0.32 million for fiscal year 2020. Sales of wet canned pet food decreased by $0.07 million, or 87.21%, to $0.01 million for fiscal year 2021 from $0.08 million for fiscal year 2020. Sales of dental health snacks decreased by $0.01 million, or 69.23%, to $0.01 million for fiscal year 2021 from $0.02 million for fiscal year 2020. The decrease of pet food revenue in fiscal year 2021 was mainly due to:
(1) the continuous development of COVID-19, we had to close a factory and stop production again for a period of time in 2021, which caused the delay of orders and some customers canceled their orders, decreasing our pet food sales revenue and sales volume; (2) the cost of raw materials required for pet food production has risen to a certain extent due to the COVID-19 pandemic and general inflation, which led to our reduced production and sales of pet food products during 2021; and (3) we declined taking orders that were historically unprofitable. Sales from the e-commerce channel increased by $0.01 million, or 107.03%, to $0.03 million for the fiscal year of 2021 from $0.02 million for fiscal year 2020, due to the increased promotion of our products through e-commerce channels. In addition, on October 31, 2021, we acquired 51% equity interests of Far Ling's Inc. and 100% equity interests of Bo Ling's Chinese Restaurant, Inc. This resulted in an increase of $0.61 million in restaurant business operations revenue.
Cost of revenues
Cost of revenues of our pet food business consists primarily of direct raw materials, direct payroll of workshop staff, utility and supply costs consumed in the manufacturing process, manufacturing labor, depreciation expense and overhead expenses necessary to manufacture finished goods as well as distribution costs such as inbound freight charges. Cost of revenues of our restaurant business consist primarily of food and packaging costs, payroll and employee benefit costs, store lease and occupancy costs and depreciation and amortization costs. Cost of revenues increased by $0.25 million, or 29.80%, to $1.11 million for fiscal year 2021 from $0.86 million for fiscal year 2020. The increase in our costs was in line with the increased revenue in fiscal year 2021.
Gross loss and gross loss margin
Gross loss was $0.02 million for fiscal year 2021, compared to gross loss of $0.04 million for fiscal year 2020. Gross loss margin was 1.88% for fiscal year 2021, compared to gross loss margin of 5.13% for fiscal year 2020.
Operating expense
Operating expense consists of selling expenses and general and administrative expenses.
Selling expenses consist primarily of advertising, salaries and shipping and handling costs incurred during the selling activities. Advertising and transportation expenses are charged to expenses as incurred. Selling expenses decreased by $0.08 million, or 35.64%, to $0.08 million for fiscal year 2021 from $0.12 million for fiscal year 2020.
General and administrative expenses increased by $2.18 million, or 123.36%, to $3.94 million for fiscal year 2021 from $1.77 million for fiscal year 2020. The main reason for the increase was due to the company's payment of certain legal costs, an increase in consulting service fees and increased depreciation and amortization expenses related to our restaurant business segment.
In connection with our acquisition of restaurant business, we recognized a goodwill of $355,570 as of the acquisition date. However, due to our significant net loss in fiscal year 2021, goodwill of $355,570 has been fully impaired for the year ended December 31, 2021.
Impairment of long-lived assets other than goodwill charge was $0.22 million in fiscal year 2021, as compared to $0 in fiscal year 2020.
As a result, total operating expenses increased by $2.71 million, or 143.80%, to $4.59 million for fiscal year 2021 from $1.88 million for fiscal year 2020. As a percentage of total revenues, total operating expenses was 420.69% for the fiscal year 2021, compared to 231.11% for fiscal year 2020.
Operating loss and operating loss margin
Loss from operations was $4.61 million for fiscal year 2021, compared to operating loss of $1.93 million for fiscal year 2020. The continuous loss from operations was mainly due to increased operating expenses in fiscal year 2021.
Net loss and loss per share
Net loss was $6.72 million for fiscal year 2021, compared to net loss of $0.87 million for fiscal year 2020. Net loss attributable to common stockholders was $6.12 million, or loss per share of $0.10, for the fiscal year 2021. This is compared to net loss attributable to common stockholders of $0.87 million, or loss per share of $0.02 for fiscal year 2020.
Financial Conditions
As of December 31, 2021, the Company had cash, cash equivalents and restricted cash of $19.51 million, compared to $6.75 million as of December 31, 2020. Accounts receivable and inventories were $0.04 million and $0.05 million, respectively, as of December 31, 2021, compared to $0.17 million and $0.25 million, respectively, as of December 31, 2020. As of December 31, 2021, we had working capital of approximately $11.42 million, as compared to working capital deficit of $8.55 million as of December 31, 2020.
Net cash used in operating activities was $3.45 million for the fiscal year 2021, compared to $2.63 million for fiscal year 2020. Net cash used in investing activities was $1.64 million for fiscal year 2021, compared to $3.35 million net cash provided by investing activities in fiscal year 2020. Net cash provided by financing activities was $18.10 million for the fiscal year 2021, compared to $0.59 million net cash used in financing activities in fiscal year 2020.
Going Concern
As reflected in our consolidated financial statements, for the year ended December 31, 2021, we have incurred a net loss of approximately $6.12 million and our cash used in operating activities amounted to approximately $3.45 million. Our business operations may be further affected by the ongoing COVID-19 pandemic. Although we received approximately $20.2 million net proceeds from issuance of common shares and warrants to certain investors during fiscal year 2021, there can be no assurances that future revenue or capital infusion will be sufficient to enable us to develop our business to a level where it will be profitable or to generate positive cash flows. These factors raise substantial doubt about the Company's ability to continue as a going concern for the next twelve months from the date that our consolidated financial statements are issued.
As of December 31, 2021, we had cash and cash equivalents and restricted cash of approximately $19.51 million. We also had short-term investments of approximately $4.43 million, which are highly liquid and can be converted into cash and used in our operations if needed. We also had approximately an aggregate of $5.99 million of loans (including approximately $5.44 million short-term loans and approximately $0.55 million short-term loans from related parties). For legal proceedings since December 31, 2019 regarding our delayed repayment of certain bank loans upon maturity, in March and April 2020, we received court rulings requiring us to make an aggregate RMB 54.54 million (approximately $8.35 million) of payments to the financial institutions. On March 13, 2021, the land and factory buildings on the land owned by our subsidiary, were auctioned by the court for $5,098,461 (RMB 33.14 million), among which, $3,192,827 (RMB 21.14 million) has been used to repay loan principal and accrued interest to a financial institution based on the court order. The repayment has been completed as of the date of this press release. On March 16, 2022, the People's Court of Huangdao District, Qingdao City, Shandong Province made a civil ruling and announced the acceptance of creditors' application of bankruptcy liquidation of our subsidiary, Qingdao Tiandihui Foodstuffs Co., Ltd., and it entered into bankruptcy proceedings. Accordingly, these legal claims relating to the bank loans are now subject to the bankruptcy proceedings.
Based on our current financial conditions, our cash balance and revenues generated from our business operations may not be currently sufficient and cannot be projected to cover our future operating expenses and meet our obligations as they become due for the next twelve months after the date that our financial statements are issued.
We face substantial challenges in our effort to resume normal business activities. Our future growth will place a significant strain on our sales and marketing capacities, administrative and operating infrastructure, manufacturing facilities and other resources. To effectively manage additional challenges brought on by COVID-19, we need to evaluate and identify suitable strategic or acquisition opportunities, complete such transactions on commercially favorable terms, or successfully integrate business operations, infrastructure and management philosophies of acquired businesses and companies, resolve the substantial litigation and judgements to which we are subject and raise substantial capital. There may be particular complexities, regulatory or otherwise, associated with our expansion into new markets, and our strategies may not succeed beyond our current markets. If we are unable to effectively address these challenges, our ability to execute acquisitions as a component of our long-term strategy will be impaired, which could have an adverse effect on our growth or our ability to function as a going concern. We also need to expand our customer base, refine our operational, financial and management controls and reporting systems and procedures. If we fail to efficiently manage this expansion of our business, our costs and expenses may increase more than anticipated and we may not successfully attract a sufficient number of customers in a cost-effective manner, respond to competitive challenges, or otherwise execute our business plans. In addition, we may, as part of carrying out our growth strategies, adopt new initiatives to implement new pricing models and strategies. We cannot assure you that these initiatives may achieve the anticipated results.
Notice
Rounding amounts and percentages: Certain amounts and percentages included in this press release have been rounded for ease of presentation. Percentage figures included in this press release have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, certain percentage amounts in this press release may vary from those obtained by performing the same calculations using the figures in the financial statements. In addition, certain other amounts that appear in this press release may not sum due to rounding.
About TDH Holdings, Inc.
Founded in April 2002, TDH Holdings, Inc. (the "Company") (NASDAQ:PETZ), is a developer, manufacturer and distributer of a variety of pet food products under multiple brands that are sold in the China, Asia and Europe. The Company also started the restaurant business operation since late 2021. More information about the Company can be found at www.tiandihui.com.
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Specifically, the Company's statements regarding, among others: its growth and business outlook; its ability to execute on its business plan, secure necessary capital to sustain and maintain its operation; its ability to resume its operations at the previous level; its ability to successfully resolve various legal proceedings and judgments in which it is involved or have been obtained against it; its ability to expand its market and customer base; its ability to refine its operational, financial and management controls and reporting systems and procedures, are forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the ability to identify, execute and integrate strategic or acquisition opportunities, the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the petfood industry in China and internationally; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and internationally and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
TDH HOLDINGS, INC. AND SUBSIDIARIES | |||||
CONSOLIDATED BALANCE SHEETS | |||||
December 31, | December 31, | ||||
2021 | 2020 | ||||
ASSETS | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents | $ | 18,027,322 | $ | 6,566,549 | |
Restricted cash | 1,483,653 | 182,515 | |||
Short-term investments | 4,428,446 | 3,138,578 | |||
Accounts receivable, net | 39,512 | 168,499 | |||
Advances to suppliers, net | 10,986 | 41,088 | |||
Inventories, net | 51,423 | 247,245 | |||
Prepayments and other current assets, net | 1,205,695 | 172,481 | |||
Total current assets | 25,247,037 | 10,516,955 | |||
NON-CURRENT ASSETS | |||||
Property, plant and equipment, net | 1,543,430 | 6,636,995 | |||
Land use rights, net | 653,125 | 1,009,005 | |||
Operating lease right-of-use assets | 4,604,365 | 19,103 | |||
Operating lease right-of-use assets - related parties | - | 270,852 | |||
Total non-current assets | 6,800,920 | 7,935,955 | |||
Total assets | $ | 32,047,957 | $ | 18,452,910 | |
LIABILITIES AND STOCKHOLDERS' | |||||
CURRENT LIABILITIES: | |||||
Accounts payable | $ | 3,065,387 | $ | 3,209,763 | |
Accounts payable - related parties | 127,688 | 124,715 | |||
Advances from customers | 109,959 | 90,834 | |||
Bank overdrafts | 79,851 | 78,320 | |||
Short-term loans | 5,440,350 | 8,391,323 | |||
Short-term loans - related parties | 555,096 | 985,883 | |||
Taxes payable | 82,614 | 60,729 | |||
Due to related parties | 307,509 | 42,021 | |||
Operating lease liabilities, current | 268,403 | 9,913 | |||
Operating lease liabilities - related parties, current | - | 195,231 | |||
Other current liabilities | 3,793,140 | 5,882,164 | |||
Total current liabilities | 13,829,998 | 19,070,896 | |||
NON-CURRENT LIABILITIES: | |||||
Deferred tax liabilities | 1,132 | - | |||
Operating lease liabilities - related party, non-current | 4,846,760 | 274,794 | |||
Total liabilities | 18,677,890 | 19,345,690 | |||
STOCKHOLDERS' EQUITY (DEFICIT): | |||||
Common stock ($0.001 par value; 200,000,000 | 104,374 | 45,850 | |||
Additional paid-in capital | 42,151,658 | 21,963,570 | |||
Statutory reserves | 160,014 | 160,014 | |||
Accumulated deficit | -28,969,627 | -22,849,319 | |||
Accumulated other comprehensive loss | -460,702 | -212,895 | |||
Total TDH Holdings, Inc. stockholders' equity | 12,985,717 | -892,780 | |||
Non-controlling interest | 384,350 | - | |||
Total stockholders' equity (deficit) | 13,370,067 | 892,780 | |||
Total liabilities and stockholders' equity (deficit) | $ | 32,047,957 | $ | 18,452,910 |
TDH HOLDINGS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
For The Years Ended December 31, | ||||||||
2021 | 2020 | 2019 | ||||||
Net revenue | $ | 1,091,889 | $ | 815,225 | $ | 12,455,414 | ||
Net revenue - related parties | - | - | 192,841 | |||||
Total revenue | 1,091,889 | 815,225 | 12,648,255 | |||||
Cost of revenue | 1,112,463 | 857,060 | 13,992,499 | |||||
Cost of revenue - related parties | - | - | 178,636 | |||||
Total cost of revenue | 1,112,463 | 857,060 | 14,171,135 | |||||
Gross loss | -20,574 | -41,835 | -1,522,880 | |||||
Operating expenses: | ||||||||
Selling expense | 75,944 | 117,993 | 920,237 | |||||
General and administrative expense | 3,944,709 | 1,766,109 | 3,702,035 | |||||
Impairment of long-lived assets other | 217,257 | - | 813,344 | |||||
Impairment of goodwill | 355,570 | - | - | |||||
Total operating expenses | 4,593,480 | 1,884,102 | 5,435,616 | |||||
Loss from operations | -4,614,054 | -1,925,937 | -6,958,496 | |||||
Interest expense | -957,548 | -1,180,489 | -1,378,755 | |||||
Government subsidies | - | 8,651 | 129,255 | |||||
Other income | 215,858 | 137,163 | 1,189 | |||||
Other expense | -1,636,080 | -35,197 | -290,655 | |||||
Investment income, net | 275,866 | 2,120,241 | - | |||||
Loss from equity method investment | - | - | -127,965 | |||||
Total other income (expenses) | -2,101,904 | 1,050,369 | -1,666,931 | |||||
Loss before income tax benefit | -6,715,958 | -875,568 | -8,625,427 | |||||
Income tax benefit | - | -900 | - | |||||
Net loss | -6,715,958 | -874,668 | -8,625,427 | |||||
Less: Net loss attributable to non-controlling | -595,650 | - | -8 | |||||
Net loss attributable to TDH Holdings, | $ | -6,120,308 | $ | -874,668 | $ | -8,625,419 | ||
Comprehensive loss | ||||||||
Net loss | $ | -6,120,308 | $ | -874,668 | $ | -8,625,427 | ||
Other comprehensive loss | ||||||||
Foreign currency translation adjustment | -247,807 | -355,411 | -100,954 | |||||
Total comprehensive loss | -6,368,115 | -1,230,079 | -8,726,381 | |||||
Less: Comprehensive loss attributable to | - | - | -8 | |||||
Comprehensive loss attributable to TDH | $ | -6,368,115 | $ | -1,230,079 | $ | -8,726,373 | ||
Loss per common share attributable to | ||||||||
Basic | $ | -0.10 | $ | -0.02 | $ | -0.41 | ||
Diluted | $ | -0.10 | $ | -0.02 | $ | -0.41 | ||
Weighted average common shares | ||||||||
Basic | 59,185,891 | 45,849,995 | 21,022,598 | |||||
Diluted | 59,185,891 | 45,849,995 | 21,022,598 |
TDH HOLDINGS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
For The Years Ended December 31, | ||||||||
2021 | 2020 | 2019 | ||||||
Cash flows from operating activities | ||||||||
Net loss | $ | -6,120,308 | $ | -874,668 | $ | -8,625,427 | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization expense | 408,740 | 391,351 | 571,528 | |||||
Fair value change of short-term investments | -495,265 | -2,120,241 | - | |||||
Loss from equity method investment | 0 | - | 127,965 | |||||
Loss on disposal of subsidiaries | 0 | - | 5,018 | |||||
Impairment of goodwill | 355,570 | - | - | |||||
Impairment of long-lived assets other than goodwill | 217,257 | - | 813,344 | |||||
Inventory write-down | 191,026 | 42,241 | 518,119 | |||||
Allowance for credit losses | 2,168 | 74,190 | 659,569 | |||||
Deferred income taxes | 0 | -1,106 | -3,861 | |||||
Loss (gain) on disposal of property, plant and equipment | 955,428 | -16,870 | 308,003 | |||||
Amortization of operating lease right-of-use assets | 280,610 | - | - | |||||
Non-cash lease expense | -4,595,020 | 33,944 | 89,176 | |||||
Gain on forgiveness of short-term loan | $ | 0 | $ | -6,265 | $ | - | ||
Changes in operating assets and liabilities: | 0 | |||||||
Accounts receivable, net | 128,987 | -112,177 | 329,042 | |||||
Accounts receivable - related parties, net | 0 | - | 306,301 | |||||
Inventories, net | 4,796 | 201,730 | 2,009,862 | |||||
Operating lease liabilities | 4,830,456 | -9,382 | - | |||||
Operating lease liabilities – related parties | -195,231 | 16,262 | 16,404 | |||||
Due from related parties, net | 0 | - | -2,206 | |||||
Due to related parties | 393,176 | - | 14,387 | |||||
Advances to suppliers, net | 30,102 | -12,179 | 36,322 | |||||
Prepayments and other current assets, net | 1,006,351 | -29,363 | 516,018 | |||||
Accounts payable | -144,376 | -416,506 | -2,775,356 | |||||
Accounts payable - related parties | 123,184 | - | -6,703 | |||||
Interest payable | 0 | 1,065,277 | 260,417 | |||||
Interest payable - related parties | 0 | 43,835 | - | |||||
Notes payable | 0 | - | -1,046,257 | |||||
Taxes payable | 21,855 | - | 13,797 | |||||
Advances from customers | 0 | -31,366 | -42,923 | |||||
Advances from customer - related party | 19,125 | - | - | |||||
Deferred income tax liability | 1,132 | - | - | |||||
Other current liabilities | 861,109 | -866,962 | 280,843 | |||||
Net cash used in operating activities | $ | -3,445,819 | $ | -2,628,255 | $ | -5,626,618 | ||
Cash flows from investing activities | ||||||||
Payments to acquire property, plant and equipment | - | -47,086 | -121,560 | |||||
Proceeds from disposal of property, plant and equipment | - | - | 233,747 | |||||
Disposal of subsidiaries | - | - | 83 | |||||
Repayments from related parties | - | - | 1,282 | |||||
Cash obtained from business acquisition | 171,827 | - | - | |||||
Payment for business acquisition | -1,020,000 | - | - | |||||
Purchase of short-term investments | -4,372,809 | -38,743,908 | - | |||||
Proceeds from sale of short-term investments | 3,578,206 | 42,146,183 | - | |||||
Net cash (used in) provided by investing activities | -1,642,776 | 3,355,189 | 113,552 | |||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of common shares | 20,222,188 | - | 6,760,000 | |||||
Purchase of noncontrolling interest | -100 | (100 | - | |||||
Repayments to related parties | - | - | -1,000 | |||||
Proceeds from bank overdrafts | - | - | 78,162 | |||||
Proceeds from short-term loans | - | 107,829 | 1,046,275 | |||||
Repayments of short-term loans | -1,692,988 | -746,437 | -2,073,177 | |||||
Proceeds from short-term loans - related parties | - | 49,350 | 4,791,403 | |||||
Repayments of short-term loans - related parties | -430,787 | - | -1,080,947 | |||||
Net cash provided by (used in) financing activities | $ | 18,098,313 | $ | -589,358 | $ | 9,520,716 | ||
Effect of exchange rate changes on cash, cash equivalents and restricted | -247,807 | 106,910 | -203,577 | |||||
Net change in cash, cash equivalents and restricted cash | 12,761,911 | 244,486 | 3,804,073 | |||||
Cash, cash equivalents and restricted cash, beginning of the year | 6,749,064 | 6,504,578 | 2,700,505 | |||||
Cash, cash equivalents and restricted cash, end of the year | $ | 19,510,975 | $ | 6,749,064 | $ | 6,504,578 | ||
Supplemental cash flow information | ||||||||
Interest paid | $ | - | $ | 38,362 | $ | 1,118,338 | ||
Income taxes paid | $ | - | $ | 146 | $ | - | ||
Non-cash investing and financing activities | ||||||||
Accrued interest added to short-term loan – related party | $ | - | $ | - | $ | 126,697 | ||
Liabilities assumed in connection with purchase of property, plant and | $ | - | $ | 14,592 | $ | 51,196 | ||
Notes payable reclassified to short-term loans | $ | - | $ | 908,850 | $ | 479,724 | ||
Receivables from related parties settled with payables to related parties | $ | - | $ | - | $ | 28,694 | ||
Receivables from common stock subscription settled with loan payables | $ | - | $ | - | $ | 4,240,000 | ||
Short-term loans settled by transferring an equity investment to the | $ | - | $ | 70,708 | $ | - | ||
Cashless exercise of warrants | $ | 24,424 | $ | - | $ | - | ||
Right of use assets obtained in exchange for operating lease obligations | $ | 5,158,944 | $ | - | $ | - | ||
Reconciliation of cash, cash equivalents, and restricted cash to the | ||||||||
Cash and cash equivalents | $ | 18,027,322 | $ | 6,566,549 | $ | 5,114,175 | ||
Restricted cash | $ | 1,483,653 | $ | 182,515 | $ | 1,390,403 | ||
Total cash, cash equivalents, and restricted cash | $ | 19,510,975 | $ | 6,749,064 | $ | 6,504,578 |
TDH HOLDINGS, INC. AND SUBSIDIARIES | |||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) | |||||||||||||||||
Number of | Common | Additional | Stock | Statutory | Retained | Accumulated | Noncontrolling | Total | |||||||||
Balance, December 31, 2017 | 9,423,750 | $ | 9,424 | $ | 9,947,084 | $ | -100,000 | $ | 160,014 | $ | 869,993 | $ | 308,286 | $ | - | $ | 11,194,801 |
Net loss | -14,219,225 | -40 | -14,219,265 | ||||||||||||||
Issuance of common shares for business acquisition | 1,092,912 | 1,093 | 1,051,927 | 1,053,020 | |||||||||||||
Collection of stock subscription receivable | 100,000 | 100,000 | |||||||||||||||
Liabilities assumed in connection with acquisition of a | |||||||||||||||||
Statutory Reserve | |||||||||||||||||
Foreign currency translation adjustment | -64,816 | -307 | -65,123 | ||||||||||||||
Balance, December 31, 2018 | 10,516,662 | $ | 10,517 | $ | 10,999,011 | $ | - | $ | 160,014 | $ | -13,349,232 | $ | 243,470 | $ | -347 | $ | -1,936,567 |
Net Loss | -8,625,419 | -8 | -8,625,427 | ||||||||||||||
Issuance of common stock | 35,333,333 | 35,333 | 10,964,667 | 11,000,000 | |||||||||||||
Disposal of noncontrolling interest | 347 | 347 | |||||||||||||||
Foreign currency translation adjustment | -100,954 | -100,954 | |||||||||||||||
Balance, December 31, 2019 | 45,849,995 | $ | 45,850 | $ | 21,963,678 | $ | - | $ | 160,014 | $ | -21,974,651 | $ | 142,516 | $ | -8 | $ | 337,399 |
Net Loss | -874,668 | -874,668 | |||||||||||||||
Foreign currency translation adjustment | -355,411 | -355,411 | |||||||||||||||
Purchase of noncontrolling interest | -108 | 8 | -100 | ||||||||||||||
Balance, December 31, 2020 | 45,849,995 | $ | 45,850 | $ | 21,963,570 | $ | - | $ | 160,014 | $ | -22,849,319 | $ | -212,895 | $ | - | $ | -892,780 |
Net Loss | -6,120,308 | -595,650 | -6,715,958 | ||||||||||||||
Issuance of common stock | 34,100,000 | 34,100 | 20,188,088 | 20,222,188 | |||||||||||||
Warrants exercised for cashless | 24,423,626 | 24,424 | - | 24,424 | |||||||||||||
Foreign currency translation adjustment | -247,807 | -247,807 | |||||||||||||||
Acquisition of restaurant business | 980,000 | 980,000 | |||||||||||||||
Balance, December 31, 2021 | 104,373,621 | $ | 104,374 | $ | 42,151,658 | $ | - | $ | 160,014 | $ | -28,969,627 | $ | -460,702 | $ | 384,350 | $ | 13,370,067 |
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SOURCE TDH Holdings, Inc.