TD Holdings, Inc. Reports Fiscal Year 2019 Financial Results
BEIJING, May 29, 2020 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company") (Formerly known as Bat Group, Inc.), a used luxurious car rental and commodities trading service provider in China today announced its financial results for the fiscal year ended December 31, 2019.
The Company began to operate its current used luxurious car leasing business in China, after it disposed its direct loans, loan guarantees and financial leasing services in July 2018, and began to operate commodities trading business in China in November 2019. In January 2020, we changed the Company's name to TD Holdings, Inc., which better represents our current focus on the new commodities trading business. The letter "T" in the name representing Chinese character for "Bronze," indicating the Company's focus on the commodities trading business, and particularly on the trading of nonferrous metals such as bronze as the main direction of the Company's business in the future.
Mrs. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "We are pleased to report our financial results for fiscal year 2019. We started our commodity trading business in late 2019. The turnover of China's commodity market has shown a rapid upward trend, and I believe that entering into the commodity trading business will bolster the Company's income and increase shareholder value. We will focus on non-ferrous metal commodities such as aluminum, copper, silver, and gold. We strive to become an emerging platform in the non-ferrous metal e-commerce industry by offering all participants in the non-ferrous metal e-commerce industry a seamless, one-stop transaction experience."
Fiscal Year 2019 Financial Highlights
-- Income from commodities trading business was $0.66 million, consisting
of $0.10 million from sales of commodities products, and $0.56 million
from supply chain management services; Income from operating lease
reached $1.83 million, compared with $0.49 million for the fiscal year
2018, representing an increase of $1.34 million or 275%.
-- Net loss from continuing operations was $6.94 million, compared with net
loss from continuing operations of $2.32 million for the fiscal year
2018.
-- Basic and diluted loss per share from continuing operations was $0.89,
compared with basic and diluted loss per share of $0.50 for the fiscal
year 2018.
-- Shareholders' equity was $5.80 million as of December 31, 2019, compared
with shareholders' equity of $2.80 million as of December 31, 2018.
Fiscal Year 2019 Financial Results
Revenues
We generate revenue from commodities trading business and used car leasing business.
Income from commodities trading business
In December 2019, we commenced our commodities trading business and we generated revenues from sales of commodity products and revenue from supply chain management consulting services.
In December 2019, we sold 55 tons of aluminum ingots to one customer and earned revenues of $100,427 from the sales of commodity products. There was no such revenue in fiscal year 2018.
We also launched supply chain management services to refer loans and distribute commodity products for our customers. In December 2019, we earned loan recommendation service fees of $323,623 for facilitation of loan volume of approximately 13.72 million (RMB 94.8 million) with two customers, and distribution service fees of $238,963 for facilitation sales for two customers. There was no such revenue in fiscal year 2018.
Income from used car leasing business
Income from used car leasing business was $1.83 million for the fiscal year ended December 31, 2019, as compared with $0.49 for the fiscal year 2018. The increase was mainly driven by the increase in the number of our self-owned used luxurious cars from 6 as of December 31, 2018 to 11 as of December 31, 2019 and expansion of our car leasing business to more extended geographic areas such as Shanghai and Chengdu in 2019 which attracted increased number of contracts from 185 for the fiscal year 2018 to 1,067 for the fiscal year 2019.
Operating costs
Cost associated with commodities trading business
The cost associated with commodities trading business was $0.59 million for the fiscal year 2019, comprised of purchase costs of aluminum ingots of $0.10 million from one related party, and cost of supply chain fees of $0.49 million which was primarily charged by a related party who assisted us with loan recommendation services. We did not incur such costs for the fiscal year 2018.
Cost associated with used car leasing business
The cost associated with used car leasing business mainly consisted of depreciation expenses on operating lease assets and car related expenses arising from lease of cars. The cost associated with used car leasing business was $1.54 million, as compared with $0.07 million for the fiscal year 2018, representing an increase of $1.47 million.
Our depreciation expenses increased from $0.07 million for the fiscal year 2018 to $0.30 million for the fiscal year 2019, representing an increase of $0.23 million, or 315%. The increase was a result of our continuous investment in used luxurious cars from 6 cars as of December 31, 2018 to 11 cars as of December 31, 2019.
We incurred car-related expenses of $1.07 million for the fiscal year 2019 as we launched sub-lease of luxurious car business through leasing cars from both third parties and one related party, over which we owned 40% equity interest. We had no car related expenses for the fiscal year 2018.
Selling, general, and administrative expenses
Selling, general and administrative expenses was $3.83 million for the fiscal year 2019, as compared with $2.47 million for the fiscal year 2018, representing an increase of $1.36 million, or 55%. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, business tax and surcharge, professional service fees, office supplies. The increase was mainly attributable to combined effects of an increase of salary and welfare expenses of $0.41 million as a result of increase of sales commissions to salespersons when we extended our car lease business to Shanghai and Chengdu market and when we started the commodity trading business in 2019, an increase of legal and consulting expenses of $0.76 million as a result of 1) issuance of 502,391 restricted shares as compensation to service providers, and 2) an increase in expenses incurred for the registered direct offerings in April and May 2019, including an increase of audit related fees of $0.16 million, an increase of commission of $0.1 million to a third party vendor for referral of underwriters.
Other expenses, net
Other expenses, net primarily consisted of impairment of investment securities of $200,000, impairment on investment in financial products of $1,000,000, and impairment on investment in two equity investees of $2,098,737 for the year ended December 31, 2019, as compared with interest expenses of $20,157 for the year ended December 31, 2018.
Net loss from continuing operations
Our net loss from continuing for the year ended December 31, 2019 was $6.94 million, representing an increase of $4.62 million, or 199% from net loss from continuing operations of $2.32 million for the year ended December 31, 2018.
Fiscal Year 2019 Cash Flows
As of December 31, 2019, the Company had cash and cash equivalents of $2.45 million, compared with $1.48 million as of December 31, 2018.
Net cash used in operating activities was $2.17 million for the fiscal year ended December 31, 2019, as compared with $0.09 million as of December 31, 2018.
Net cash used in investing activities was $8.87 million for the fiscal year ended December 31, 2019, compared to $3.27 million as of December 31, 2018.
Net cash provided by financing activities was $11.83 million for the fiscal year ended December 31, 2019, compared to $3.81 million as of December 31, 2018.
About TD Holdings, Inc.
TD Holdings, Inc. (Nasdaq: TD) (Formerly known as Bat Group, Inc.) is a used luxurious car rental and commodities trading service provider in China. The used luxurious car business is conducted under the brand name "BatCar" by the Company's VIE entity, Tianxing Kunlun Technology Co. Ltd, from its headquarters in Beijing. The commodities trading business is conducted under the brand name "Huamucheng" by the Company's VIE entity, Shenzhen Huamucheng Trading Co., Ltd. For more information please visit https://www.imbatcar.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. 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.
TD HOLDINGS, INC. (Formerly Bat Group, Inc.)
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2019 2018
---
ASSETS
Cash $
2,446,683 $
1,484,116
Loans receivable from third parties 1,955,697
Due from related parties 3,310,883
Other current assets 166,617 87,922
Total current assets 7,879,880 1,572,038
Investments in equity investees 972,807
Deposit in investment in equity
investee 14,351
Loan receivable from a third party,
noncurrent 50,230
Property and equipment, net 3,835 5,524
Right-of-use lease assets, net 41,188
Operating lease assets, net 2,426,109 1,634,018
Total noncurrent assets 3,508,520 1,639,542
Total Assets $
11,388,400 $
3,211,580
===
LIABILITIES AND EQUITY
Liabilities
Advances from customers $
15,249 $
6,208
Third party loans payable 2,367,967 218,100
Due to related parties 1,017,362
Stock subscription advance 1,600,000
Income tax payable 14,735
Other current liabilities 420,101 185,049
Total current liabilities 5,435,414 409,357
Related party loan, noncurrent 152,124
Total noncurrent liabilities 152,124
Total Liabilities 5,587,538 409,357
Commitments and Contingencies
Stockholders' Equity
Series A Preferred Stock (par value
$0.001 per share, 1,000,000 shares
authorized at December 31, 2019
and 2018, respectively; nil shares
issued and outstanding at December
31, 2019 and 2018, respectively)
Series B Preferred Stock (par value
$0.001 per share, 5,000,000 shares
authorized at December 31, 2019
and 2018, respectively; nil shares
issued and outstanding at December
31, 2019 and 2018, respectively)
Common stock (par value $0.001 per
share, 100,000,000 shares
authorized; 11,585,111 and
5,023,906 shares issued and
outstanding at December 31, 2019
and 2018, respectively)* 11,585 5,024
Additional paid-in capital 38,523,170 28,765,346
Accumulated deficit (32,391,040) (25,457,090)
Accumulated other comprehensive
loss (334,281) (511,057)
Total TD Holdings, Inc.'s
Stockholders' Equity 5,809,434 2,802,223
Non-controlling interest (8,572)
Total Equity 5,800,862 2,802,223
Total Liabilities and
Equity $
11,388,400 $
3,211,580
===
TD HOLDINGS, INC. (Formerly Bat Group, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Years Ended
December 31,
2019 2018
---
Revenues
Revenue from sales of
commodity products $
100,427
$
Revenue from supply chain management
services (including loan
recommendation service fee of $323,623
and distribution service fee of
$238,963) 562,586
Income from operating leases 1,830,148 488,062
Total Revenues 2,493,161 488,062
Operating costs
Cost of revenue -commodity product
sales -related party (100,180)
Cost of revenue -supply chain
management services -related party (489,231)
Cost of operating lease (1,544,120) (71,252)
Total operating costs (2,133,531) (71,252)
Gross profit 359,630 416,810
Operating expenses
Selling, general, and administrative
expenses (3,828,412) (2,469,964)
Changes in fair value of noncurrent
liabilities (166,540)
Impairment of operating lease assets (148,143) (184,645)
Total operating expenses (3,976,555) (2,821,149)
Other expenses, net
Interest expenses, net (657) (20,157)
Impairment of investment securities (200,000)
Equity investment loss (11,342)
Impairment of investment in financial
products (1,000,000)
Impairment of investment in equity
investees (2,098,737)
Total other expenses, net (3,310,736) (20,157)
Net loss from continuing operations
before income taxes (6,927,661) (2,424,496)
Income tax (expenses) benefits (14,861) 104,024
Net loss from continuing operations (6,942,522) (2,320,472)
Net income from discontinued operations 9,967,629
Net income (loss) (6,942,522) 7,647,157
Less: Net income (loss) attributable to
non-controlling interests (8,572)
Net income (loss)
attributable to TD Holdings,
Inc.'s Stockholders $
(6,933,950) $
7,647,157
===
Comprehensive income (loss)
Net income (loss) $
(6,942,522) $
7,647,157
Foreign currency translation adjustment 176,776 (5,329,710)
Reclassified to net income from
discontinued operations 4,912,715
Total comprehensive income (loss) (6,765,746) 7,230,162
Less: Total comprehensive loss
attributable to non-controlling
interests (8,572)
Comprehensive income (loss)
attributable to TD Holdings,
Inc. $
(6,757,174) $
7,230,162
===
Income (loss)per share -
basic and diluted $
(0.89) $
1.67
===
Net loss per share from
continuing operations -
basic and diluted $
(0.89) $
(0.50)
===
Net income per share from
discontinued operations -
basic and diluted
$ $
2.17
Weighted Average Shares Outstanding-
Basic and Diluted 7,776,306 4,596,116
TD HOLDINGS, INC. (Formerly Bat Group, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years
Ended December 31,
2019 2018
---
Cash Flows from Operating Activities:
Net (loss) income $
(6,942,522) $
7,647,157
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation of operating lease
assets 296,933 101,654
Depreciation of property and
equipment 2,326 1,001
Amortization of right of use
assets 60,128
Impairment on operating lease
assets 148,143 184,645
(Gain) loss on disposal of
operating lease asset (6,165) 10,875
Impairment on investment
securities 200,000
Equity investment loss 11,342
Impairment on investment in
financial products 1,000,000
Impairment on investment in
equity investees 2,098,737
Stock-based compensation to
service providers 884,208
Gain on disposal of discontinued
operations (9,967,629)
Income tax benefits from intra-
period tax allocation (105,000)
Changes in fair value of
noncurrent liabilities 166,540
Changes in operating assets and
liabilities:
Other current assets (80,202) (91,395)
Advances from customers 9,198 6,454
Income tax payable 14,861
Other current liabilities 239,050 189,100
Lease liabilities (101,669)
Net cash provided by operating
activities from discontinued
operations 1,769,566
Net Cash Used in Operating
Activities (2,165,632) (87,032)
Cash Flows from Investing
Activities:
Purchases of property and
equipment (695) (6,743)
Purchases of operating lease
assets (2,065,453) (2,117,477)
Proceeds from disposal of
operating lease assets 332,909 121,752
Investment in one investment
security (200,000)
Investments in equity investees (868,458)
Deposit for investment in an
equity investee (14,474)
Investments in financial
products (1,000,000)
Payment made on loan to related
parties (2,865,879)
Payment made on loans to third
parties (2,191,866)
Proceeds from disposal of
discontinued operations 500,000
Cash paid in connection with
discontinued operations (499,496)
Net cash used in investing
activities from discontinued
operations (1,270,070)
Net Cash Used in by Investing
Activities (8,873,916) (3,272,034)
Cash Flows from Financing
Activities:
Proceeds from third party
borrowings 2,695,545 226,713
Repayments of borrowings to
third parties (289,486)
Proceeds from borrowings from
related parties 1,162,719
Stock subscription advance
received from shareholders 1,600,000
Proceeds from registered direct
offering, net of transaction
costs 4,653,440
Proceeds from issuance of common
stock under private placement
transactions 589,750 3,265,370
Capital contribution from
shareholders of a variable
interest entity 1,417,736
Proceeds from convertible
promissory notes 314,352
Net Cash Provided by Financing
Activities 11,829,704 3,806,435
Effect of Exchange Rate Changes
on Cash 172,411 (322,883)
Net Increase in Cash 962,567 124,486
Cash, Beginning of Year 1,484,116 1,359,630
Cash, End of Year $
2,446,683 $
1,484,116
===
Supplemental disclosure of cash
flow information
Cash paid for
interest expenses $
41,053
$
===
Cash paid for income
tax expenses
$
$ -
Supplemental disclosure of Non-
cash investing and financing
activities
Issuance of common
stocks in exchange
of investments in
one equity investee $
410,000
$
===
Right-of-use assets
obtained in exchange
for operating lease
obligations $
61,648
$
===
View original content:http://www.prnewswire.com/news-releases/td-holdings-inc-reports-fiscal-year-2019-financial-results-301067861.html
SOURCE TD Holdings, Inc.
