GLG - Breaking News: TD Holdings Inc. Reports Second Quarter 2021 Financial Results
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 .
| TD HOLDINGS, INC. |
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
| June 30, |
| December 31, |
| 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; |
| 97,044 |
| 79,131 |
| 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 COMPREHENSIVE INCOME (LOSS) |
| (Expressed in U.S. dollars, except for the number of shares) |
| For the Three Months Ended |
| For the Six Months Ended |
| 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) |
| Amortization of relative fair value of warrants relating to issuance of convertible notes |
| – |
| (3,060,000) |
| – |
| (3,060,000) |
| 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 taxes |
| 729,249 |
| (4,761,565) |
| (408,558) |
| (4,855,696) |
| 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 Stockholders |
| $ |
| 357,856 |
| (5,459,681) |
| (1,180,420) |
| (5,809,897) |
| 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 non-controlling interests |
| – |
| 2,804 |
| – |
| 7,073 |
| Comprehensive income (loss) attributable to TD Holdings, Inc. |
| $ |
| 3,064,064 |
| (5,545,351) |
| 882,150 |
| (5,897,869) |
| Income (Loss) per share – basic and diluted |
| Continuing Operation- Income (loss) per share – Basic and diluted |
| (0.00) |
| (0.11) |
| (0.01) |
| (0.17) |
| Continuing Operation- Income (loss) per share – Diluted |
| (0.00) |
| – |
| – |
| – |
| Discontinuing Operation-Net loss per share –Basic and diluted |
| $ |
| – |
| (0.01) |
| – |
| (0.02) |
| 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 |
| 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 operating activities: |
| 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 convertible notes |
| – |
| 3,400,000 |
| Amortization of relative fair value of warrants relating to issuance of convertible notes |
| – |
| 3,060,000 |
| 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 operations |
| (3,789,382) |
| (2,740,074) |
| 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 issuance costs with proceeds collected in advance in November 2019 |
| $ |
| – |
| $ |
| 1,600,000 |
| Issuance of common stocks in connection with warrant cashless exercise in March 2021 |
| $ |
| 1,439,826 |
| $ |
| – |
The post Breaking News: TD Holdings, Inc. Reports Second Quarter 2021 Financial Results first appeared on Financial Buzz .
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Breaking News: TD Holdings, Inc. Reports Second Quarter 2021 Financial Results