PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Unaudited financial statements for Q3 2021 show total assets at $218.8 million, revenues at $144.2 million, and equity at $190.7 million, driven by loan growth and capital raises [Unaudited Condensed Consolidated Balance Sheets](index=2&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets increased to $218.8 million by September 30, 2021, driven by a surge in loans receivable, while liabilities decreased and equity grew to $190.7 million Consolidated Balance Sheet Highlights (in USD) | Balance Sheet Item | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$218,785,528** | **$167,178,482** | | Cash | $4,291,390 | $2,700,013 | | Loans receivable from third parties | $103,932,909 | $18,432,691 | | Due from related parties | $12,083,999 | $55,839,045 | | **Total Liabilities** | **$28,129,542** | **$47,149,256** | | Acquisition payable | $- | $15,384,380 | | Due to related parties | $22,878 | $7,346,021 | | **Total Equity** | **$190,655,986** | **$120,029,226** | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20(LOSS)) Q3 2021 revenues surged 697% to $54.8 million, and nine-month revenues grew 1339% to $144.2 million, though gross profit declined and operating expenses rose, resulting in a narrowed net loss Q3 2021 vs Q3 2020 Performance (in USD) | Metric | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | **Total Revenues** | **$54,773,806** | **$6,871,353** | | Gross Profit | $1,973,754 | $3,156,708 | | Total Operating Expenses | ($2,367,798) | ($292,080) | | Net Income (Loss) Attributable to Stockholders | $457,615 | $546,801 | | Diluted EPS | $0.00 | $0.01 | Nine Months 2021 vs 2020 Performance (in USD) | Metric | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | | **Total Revenues** | **$144,195,710** | **$10,019,880** | | Gross Profit | $2,509,484 | $3,671,394 | | Total Operating Expenses | ($7,687,573) | ($1,032,660) | | Net (Loss) Attributable to Stockholders | ($722,805) | ($5,263,096) | | Diluted EPS | ($0.01) | ($0.12) | [Unaudited Condensed Consolidated Statements of Changes in Equity](index=5&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) Total equity grew from $120.0 million to **$190.7 million** by September 30, 2021, primarily due to the issuance of 50 million shares in private placements raising $62.3 million - Total equity increased by **$70.6 million** in the first nine months of 2021, reaching **$190.7 million**[15](index=15&type=chunk) - The company issued **50,000,000 shares** of common stock in connection with private placements, raising **$62.3 million**[15](index=15&type=chunk) - Other significant equity activities included share-based payments for services (**$1.8 million**), issuance of stock from convertible note exercises (**$2.2 million**), and registered direct offerings (**$2.2 million**)[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operations was $0.9 million for the nine months ended September 30, 2021, with $62.2 million used in investing activities and $62.1 million provided by financing, increasing cash to $4.3 million Summary of Cash Flows (Nine Months Ended Sep 30, in USD) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $941,931 | $2,372,520 | | Net Cash Used in Investing Activities | ($62,213,074) | ($83,141,021) | | Net Cash from Financing Activities | $62,125,911 | $81,428,147 | | **Net Increase in Cash** | **$1,591,377** | **$1,190,281** | | **Cash at End of Period** | **$4,291,390** | **$2,967,557** | - Major financing activities in 2021 included **$57.9 million** from private placements and **$4.5 million** from convertible notes[27](index=27&type=chunk) - The primary use of cash in investing activities was **$99.0 million** for loans to third parties, partially offset by collections of **$13.5 million** from third parties and **$44.4 million** from related parties[27](index=27&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's business structure, accounting policies, and key financial items, including subsidiary expansion, a surge in loans receivable to $103.9 million, and significant capital raising activities [Note 1. Organization and Business Description](index=11&type=section&id=Note%201.%20Organization%20and%20Business%20Description) The company primarily conducts commodity trading and supply chain management in the PRC, expanding operations in 2021 through new subsidiaries like Hainan Jianchi and Yangzhou Baiyu - The company's primary business is **commodity trading and supply chain management services** in the PRC[29](index=29&type=chunk) - Several **new subsidiaries** were established in late 2020 and 2021 to expand the commodity trading and e-commerce business, including entities in Hainan and Yangzhou[29](index=29&type=chunk)[31](index=31&type=chunk) [Note 3. Loans Receivable from Third Parties](index=13&type=section&id=Note%203.%20Loans%20Receivable%20from%20Third%20Parties) Loans receivable from third parties surged to **$103.9 million** by September 30, 2021, from $18.4 million, with $99.0 million in new loans issued at 10.95% interest Loans Receivable from Third Parties (in USD) | Date | Amount | | :--- | :--- | | September 30, 2021 | $103,932,909 | | December 31, 2020 | $18,432,691 | - The company provided new loans of **$99,030,244** and collected **$13,463,633** during the nine months ended September 30, 2021[44](index=44&type=chunk) - Interest income from these loans was **$6.86 million** for the nine months ended September 30, 2021, up from **$3.73 million** in the prior-year period[45](index=45&type=chunk) [Note 6. Convertible Promissory Notes](index=15&type=section&id=Note%206.%20Convertible%20Promissory%20Notes) In 2021, the company issued two unsecured convertible notes totaling **$4.99 million** principal for **$4.5 million** proceeds, carrying a 10% interest rate, with portions settled via common stock issuance - On January 6 and March 4, 2021, the company issued convertible notes with principal amounts of **$1.67 million** and **$3.32 million**, respectively, for total proceeds of **$4.5 million**[52](index=52&type=chunk)[53](index=53&type=chunk) - During Q3 2021, the company settled portions of the notes by issuing a total of **2,729,463 shares** of common stock[52](index=52&type=chunk)[53](index=53&type=chunk) [Note 7. Capital Transactions](index=16&type=section&id=Note%207.%20Capital%20Transactions) The company executed significant capital transactions in the first nine months of 2021, including selling **15 million shares** for **$24.45 million** and **35 million shares** plus **19 million units** for **$37.85 million** in private placements - In January 2021, the company sold **15,000,000 shares** in a private placement for proceeds of **$24,450,000**[58](index=58&type=chunk) - In August/September 2021, the company sold an aggregate of **35,000,000 shares** and **19,000,000 units** in private placements for total proceeds of **$37.85 million**[59](index=59&type=chunk) - As of September 30, 2021, there were **19,273,370 warrants** outstanding and exercisable, with a weighted average exercise price of **$1.43**[67](index=67&type=chunk) [Note 10. Related Party Transactions and Balances](index=20&type=section&id=Note%2010.%20Related%20Party%20Transactions%20and%20Balances) Related party transactions significantly increased in the first nine months of 2021, with revenues reaching **$23.3 million** and purchases **$22.4 million**, while balances due from related parties decreased to **$12.1 million** Balances with Related Parties (in USD) | Balance | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Due from related parties | $12,083,999 | $55,839,045 | | Due to related parties | $22,878 | $7,346,021 | Transactions with Related Parties (Nine Months Ended Sep 30, in USD) | Transaction | 2021 | 2020 | | :--- | :--- | :--- | | Revenue from related parties | $23,292,454 | $5,687,575 | | Purchases from related parties | $22,377,645 | $4,865,857 | [Note 11. Discontinued Operation](index=22&type=section&id=Note%2011.%20Discontinued%20Operation) The used luxurious car leasing business was discontinued on August 28, 2020, resulting in a net loss of **$3.54 million** for the nine months ended September 30, 2020 - The **used luxurious car leasing business** was disposed of on August 28, 2020, and is classified as a **discontinued operation**[91](index=91&type=chunk) - This discontinued operation recorded a net loss of **$3,541,807** for the nine months ended September 30, 2020[94](index=94&type=chunk) [Note 12. Commitments and Contingencies](index=23&type=section&id=Note%2012.%20Commitments%20and%20Contingencies) The company has a short-term office lease of **$7,710** per month and is involved in ongoing legal matters, including a lawsuit to recover a **$1 million** impaired investment from Harrison Fund - The company has a short-term operating lease with a monthly rent of about **$7,710**, expiring in August 2022[95](index=95&type=chunk) - A **2015 derivative action** was **settled and dismissed** in July 2019[96](index=96&type=chunk)[97](index=97&type=chunk) - The company is pursuing recovery of a **$1,000,000 investment** from Harrison Fund, LLC in a lawsuit filed in April 2020. The investment has been **fully impaired** due to uncertainty[104](index=104&type=chunk) [Note 13. Risks and Uncertainties](index=25&type=section&id=Note%2013.%20Risks%20and%20Uncertainties) The company faces various risks, including credit, liquidity, and foreign currency risks from PRC operations, potential COVID-19 impacts, and industry-specific risks like commodity price fluctuations and seasonal demand - The company faces **credit risk**, **liquidity risk**, and **foreign currency risk** related to its operations in the PRC[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - The **COVID-19 pandemic** is cited as a risk that could **disrupt business operations, supply chains, and customer demand**[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - The commodity trading business is subject to **seasonal fluctuations**, with the first quarter typically being the weakest, and is affected by **macroeconomic price volatility**[116](index=116&type=chunk) [Note 14. Subsequent Events](index=27&type=section&id=Note%2014.%20Subsequent%20Events) Post-quarter, the company engaged in significant financing, including issuing a **$2.0 million** convertible note and a **$45.5 million** private placement of **65 million shares** at **$0.70** per share - On October 4, 2021, the company issued a new convertible note with a principal of **$2.22 million** for **$2.0 million** in proceeds[118](index=118&type=chunk) - In October and November 2021, the company settled convertible notes totaling **$1.5 million** by issuing over **3.2 million shares** of common stock[119](index=119&type=chunk) - On November 5, 2021, the company agreed to a private placement to sell **65,000,000 shares** for gross proceeds of **$45.5 million**[120](index=120&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=28&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's commodity trading business in the PRC, highlighting significant 2021 revenue growth driven by market conditions and strategic focus, alongside challenges from increased costs and bolstered liquidity from **$64 million** in equity financing [Overview](index=28&type=section&id=MD%26A%20Overview) The company focuses on commodities trading and supply chain management in the PRC, facing challenges such as intense competition, China's economic slowdown, limited operating history, and high capital requirements - The company's primary business is **trading non-ferrous metal products** and providing **supply chain management services** in the PRC[123](index=123&type=chunk) - Key challenges include **competition** from large domestic providers, **China's economic slowdown**, a **limited operating history** (started in late 2019), and the **capital-intensive nature** of the business[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) [Results of Operations](index=30&type=section&id=MD%26A%20Results%20of%20Operations) Q3 2021 revenue surged **697%** to **$54.8 million**, and nine-month revenue grew **1339%** to **$144.2 million**, driven by market strength, though gross profit declined and SG&A expenses rose sharply due to amortization Three Months Ended Sep 30, 2021 vs 2020 (in USD) | Item | 2021 | 2020 | Change % | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$54,773,806** | **$6,871,353** | **697%** | | Gross Profit | $1,973,754 | $3,156,708 | (37)% | | SG&A Expenses | ($2,226,398) | ($292,080) | 662% | | Net Income from Continuing Ops | $457,615 | $3,535,917 | (87)% | Nine Months Ended Sep 30, 2021 vs 2020 (in USD) | Item | 2021 | 2020 | Change % | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$144,195,710** | **$10,019,880** | **1339%** | | Gross Profit | $2,509,484 | $3,671,394 | (32)% | | SG&A Expenses | ($5,851,131) | ($1,032,660) | 467% | | Net (Loss) from Continuing Ops | ($722,805) | ($1,728,362) | (58)% | - Revenue growth was driven by a **prosperous global bulk market**, **increased commodity prices**, and a **strategic focus on the Hainan province**[135](index=135&type=chunk)[147](index=147&type=chunk) - The increase in SG&A expenses was mainly due to **amortization of intangible assets ($2.9M)** and **convertible notes ($0.35M)** in the first nine months of 2021, which were not present in the same period of 2020[153](index=153&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=MD%26A%20Liquidity%20and%20Capital%20Resources) The company primarily financed operations through equity, raising **$64 million** in gross proceeds in the first nine months of 2021, resulting in **$103 million** positive working capital and sufficient liquidity for the next 12 months - The company raised approximately **$64 million** in gross proceeds from various equity financing transactions in the first nine months of 2021[161](index=161&type=chunk) - As of September 30, 2021, the company had positive working capital of approximately **$103 million**[160](index=160&type=chunk) Cash Flow Summary (Nine Months Ended Sep 30, in USD) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $941,931 | $2,372,520 | | Net Cash Used in Investing Activities | ($62,213,074) | ($83,141,021) | | Net Cash from Financing Activities | $62,125,911 | $81,046,593 | [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=38&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section is not applicable for the company as a smaller reporting company - Not applicable[174](index=174&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=38&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were not effective as of September 30, 2021, with no material changes to internal control over financial reporting during the quarter - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were **not effective** as of September 30, 2021[175](index=175&type=chunk) - **No changes** in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls were identified during the quarter[177](index=177&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=39&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company provides updates on several legal matters, including a settled 2015 derivative action, a vacated 2017 arbitration award, and an ongoing 2020 lawsuit to recover a **$1 million** impaired investment - A **2015 derivative action** was **settled and dismissed** in July 2019[179](index=179&type=chunk)[180](index=180&type=chunk) - A 2017 arbitration award of **$1.4 million** in the company's favor against Sorghum was **vacated** by the court, and the company withdrew its appeal[180](index=180&type=chunk)[182](index=182&type=chunk) - A 2020 lawsuit against Harrison Fund, LLC to recover a **$1,000,000 investment** is ongoing. The company has applied a **full impairment** against this investment due to uncertainty[186](index=186&type=chunk)[187](index=187&type=chunk) [ITEM 1A. RISK FACTORS](index=40&type=page&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors previously disclosed in the annual report on Form 10-K filed on June 4, 2021 - There have been **no material changes** to the risk factors disclosed in the annual report on Form 10-K filed with the SEC on June 4, 2021[188](index=188&type=chunk) [Other Part II Items](index=40&type=section&id=Other%20Part%20II%20Items) The report indicates no information for Item 2, Item 3, Item 4, and Item 5 of Part II - Item 2, 3, 4, and 5 of Part II are reported as 'None' or 'Not applicable'[188](index=188&type=chunk) [ITEM 6. EXHIBITS](index=41&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, securities purchase agreements, and officer certifications - The report includes a **list of all exhibits filed**, such as the Certificate of Incorporation, Bylaws, various agreements, and Sarbanes-Oxley certifications[190](index=190&type=chunk)

[PART 1. FINANCIAL INFORMATION](index=3&type=section&id=PART%201.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The company's financials reflect a major transformation with asset growth to $100.4 million, new revenue from commodity trading, and a net loss of $3.3 million due to discontinued operations [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets surged to $100.4 million driven by a significant increase in loans receivable, while total equity grew substantially to $93.9 million Condensed Consolidated Balance Sheet Highlights (in USD) | Account | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $99,718,153 | $7,879,880 | | Loans receivable from third parties | $87,310,943 | $576,647 | | **Total Assets** | **$100,365,677** | **$11,388,400** | | **Total Liabilities** | **$6,457,107** | **$5,587,538** | | **Total Equity** | **$93,908,570** | **$5,800,862** | [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20(LOSS)) The company generated $12.4 million in new revenue over nine months but reported a net loss of $3.3 million due to discontinued operations and financing costs Statement of Operations Highlights (in USD) | Metric | Q3 2020 | Q3 2019 | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$7,212,829** | **$0** | **$12,391,317** | **$0** | | Gross Profit | $3,498,184 | $0 | $6,042,831 | $0 | | Net Income (Loss) from Continuing Operations | $4,170,658 | ($259,945) | $222,119 | ($2,122,555) | | Net Loss from Discontinued Operations | ($2,989,116) | ($132,898) | ($3,541,807) | ($1,140,439) | | **Net Income (Loss) Attributable to Stockholders** | **$1,181,542** | **($392,848)** | **($3,312,615)** | **($3,262,508)** | | **EPS (basic and diluted)** | **$0.02** | **($0.05)** | **($0.08)** | **($0.46)** | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash flow was driven by $81.0 million from financing activities, which funded $81.7 million in investing activities, primarily loans to third parties Cash Flow Summary (in USD, for the Nine Months Ended Sep 30) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $942,577 | ($2,002,690) | | Net Cash Used in Investing Activities | ($81,711,571) | ($5,457,537) | | Net Cash from Financing Activities | $81,047,086 | $7,399,262 | | **Net Increase (Decrease) in Cash** | **$1,190,281** | **($75,162)** | | **Cash at End of Period** | **$2,967,557** | **$341,297** | [Notes to Financial Statements](index=12&type=section&id=NOTES%20TO%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Notes detail a corporate name change, the disposal of the car leasing business, and a new focus on commodity trading and supply chain management - The company changed its name to TD Holdings, Inc on March 6, 2020[16](index=16&type=chunk) - On August 28, 2020, the company **sold its used luxurious car leasing business** for a nominal consideration of $1.00, now classified as a **discontinued operation**[20](index=20&type=chunk)[25](index=25&type=chunk)[35](index=35&type=chunk) - The company's current business focuses on **commodity trading and supply chain management services** in the PRC through its subsidiary Huamucheng[22](index=22&type=chunk) - Subsequent to the quarter end, the company agreed to **acquire Shenzhen Qianhai Baiyu Supply Chain Co, Ltd for approximately $99.3 million**[122](index=122&type=chunk) [Management's Discussion and Analysis (MD&A)](index=32&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the strategic shift to commodity trading, which generated $12.4 million in revenue, and highlights key developments and associated risks - The company has discontinued its used luxury car leasing business and now has one main business line: **commodities trading and supply chain management**[123](index=123&type=chunk) - A key strategic move was the **acquisition of Qianhai Baiyu** in October 2020 for **~$99.3 million** to expand its supply chain service business[132](index=132&type=chunk)[133](index=133&type=chunk) - The company provided a **revolving credit facility of up to ~$80 million** to Shenzhen Xinsuniao to develop its supply chain financing services[128](index=128&type=chunk)[137](index=137&type=chunk) - Management highlights risks associated with a **limited operating history** in the new business segment and the need for significant capital[144](index=144&type=chunk)[145](index=145&type=chunk) [Results of Operations - Three Months Ended September 30, 2020 vs 2019](index=36&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20September%2030%2C%202020%20vs%202019) The company reported Q3 2020 revenue of $7.2 million from new operations, achieving a net income of $1.2 million despite losses from discontinued operations Q3 2020 vs Q3 2019 Performance (in USD) | Metric | Q3 2020 | Q3 2019 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $7,212,829 | $0 | +$7,212,829 | | Gross Profit | $3,498,184 | $0 | +$3,498,184 | | Income (Loss) from Continuing Operations | $4,170,658 | ($259,945) | +$4,430,603 | | Net Income (Loss) | $1,181,542 | ($392,843) | +$1,574,385 | - Revenue in Q3 2020 was split between **commodity product sales ($3.7M)** and **supply chain management services ($3.5M)**[147](index=147&type=chunk)[148](index=148&type=chunk) [Results of Operations - Nine Months Ended September 30, 2020 vs 2019](index=39&type=section&id=Results%20of%20Operations%20-%20Nine%20Months%20Ended%20September%2030%2C%202020%20vs%202019) For the nine-month period, new business revenue was $12.4 million, but a $6.46 million charge on convertible notes led to a net loss of $3.3 million Nine Months 2020 vs 2019 Performance (in USD) | Metric | Nine Months 2020 | Nine Months 2019 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $12,391,317 | $0 | +$12,391,317 | | Gross Profit | $6,042,831 | $0 | +$6,042,831 | | SG&A Expenses | ($1,032,660) | ($2,123,191) | +$1,090,531 (51% decrease) | | Net Income (Loss) from Continuing Operations | $222,119 | ($2,122,555) | +$2,344,674 | | Net Loss | ($3,319,688) | ($3,262,994) | -$56,694 (2% increase) | - A one-time expense of **$6.46 million** related to the amortization of convertible notes significantly impacted the net results for the nine-month period[162](index=162&type=chunk)[174](index=174&type=chunk) [Cash Flows and Capital Resources](index=42&type=section&id=Cash%20Flows%20and%20Capital%20Resources) The company raised $81.1 million from financing activities, which was primarily deployed into loans to third parties to support the new supply chain business - The company raised approximately **$81.1 million from equity financing** transactions in 2020, which was used as working capital to expand the commodity trading business[180](index=180&type=chunk) - Net cash used in investing activities for the nine months was **$81.7 million**, dominated by loans made to third parties[185](index=185&type=chunk)[189](index=189&type=chunk) - As of September 30, 2020, the company had a cash balance of **$3.0 million** and working capital of **$93.3 million**[181](index=181&type=chunk)[183](index=183&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=45&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company has resolved several past legal matters and initiated a new lawsuit to recover a $1 million investment - The 2015 Derivative Action and the 2018 Court Matter with Shanghai Nonobank have been **resolved in the company's favor**[200](index=200&type=chunk)[205](index=205&type=chunk) - The arbitration award in the 2017 matter with Sorghum was **vacated**, and the company has withdrawn its appeal[203](index=203&type=chunk) - In April 2020, the company initiated a lawsuit against Harrison Fund to **recover a $1 million investment**, against which a full impairment has been recorded[206](index=206&type=chunk)[207](index=207&type=chunk) [Risk Factors](index=46&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company identifies new risks related to its recent acquisition, the volatility of the supply chain business, and potential competition - There is a risk of **failing to effectively synergize** the newly acquired Qianhai Baiyu with the existing commodities trading business of Huamucheng[209](index=209&type=chunk)[210](index=210&type=chunk) - The supply chain business is susceptible to **volatility from the ongoing COVID-19 pandemic** and recovery efforts[213](index=213&type=chunk) - Competition includes the risk that customers may reduce costs by developing their own **in-house supply chain solutions**, which would adversely affect the company's business[214](index=214&type=chunk)[216](index=216&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.001 GLG Nasdaq Capital Market Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SE ...

Part I. Financial Information [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) For Q1 2020, TD Holdings, Inc. reported a significant revenue increase driven by new commodity trading, a narrowed net loss, and growth in total assets and equity [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$12.61 million** by March 31, 2020, driven by loans and related party receivables, while total equity rose to **$7.26 million** due to common stock issuance | Balance Sheet Highlights | March 31, 2020 (USD) | December 31, 2019 (USD) | | :--- | :--- | :--- | | **Total Assets** | **$12,614,181** | **$11,388,400** | | Cash | $27,101 | $2,446,683 | | Loans receivable from third parties (Current) | $3,735,799 | $1,955,697 | | Due from related parties | $4,823,038 | $3,310,883 | | **Total Liabilities** | **$5,358,867** | **$5,587,538** | | **Total Equity** | **$7,255,314** | **$5,800,862** | - The company issued **17 million** new shares of common stock during the quarter, increasing the total shares issued and outstanding from **11,585,111** to **28,585,111**[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2020 total revenue surged to **$1.48 million** due to new commodity segments, with gross profit increasing and net loss significantly narrowing to **$139,972** | Income Statement Highlights | Q1 2020 (USD) | Q1 2019 (USD) | | :--- | :--- | :--- | | **Total Revenue** | **$1,483,060** | **$399,999** | | Revenue from sales of commodity products | $1,053,632 | $0 | | Revenue from supply chain management services | $415,377 | $0 | | Income from operating leases | $14,051 | $399,999 | | **Gross Profit** | **$327,886** | **$162,348** | | Selling, general, and administrative expenses | ($425,115) | ($1,906,319) | | **Net Loss** | **($139,972)** | **($1,829,826)** | | **Net loss per share – basic and diluted** | **($0.01)** | **($0.35)** | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to **$156,559** in Q1 2020, but a **$2.42 million** net decrease in cash resulted from increased investing outflows | Cash Flow Summary | Q1 2020 (USD) | Q1 2019 (USD) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($156,559) | ($758,633) | | Net Cash Used in Investing Activities | ($3,424,968) | ($999,481) | | Net Cash Provided by Financing Activities | $1,063,773 | $592,724 | | **Net decrease in cash** | **($2,419,582)** | **($1,143,421)** | | **Cash at end of period** | **$27,101** | **$340,695** | - Significant non-cash financing activities included the issuance of common stock for private placements totaling **$15.1 million**, with proceeds collected subsequent to the quarter-end[12](index=12&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's structure, accounting policies, significant capital transactions, and segment reporting for its two VIE-operated business lines - The company conducts its business through two Variable Interest Entities (VIEs): Beijing Tianxing (used luxury car leasing) and Huamucheng (commodity trading and supply chain management)[14](index=14&type=chunk) - In Q1 2020, the company entered into agreements to sell **15,000,000** shares of common stock and **$30,000,000** in convertible promissory notes with warrants, with proceeds received in April 2020[64](index=64&type=chunk)[65](index=65&type=chunk) - The company now reports two operating segments: 'Commodity Trading and Supply Chain Management Services' and 'Used Car Leasing'. For Q1 2020, the commodity segment generated **$1.47 million** in revenue, while the car leasing segment generated only **$14,051**[98](index=98&type=chunk)[99](index=99&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) MD&A highlights the COVID-19 impact on car leasing, the new commodity trading business driving **271%** revenue growth, and a **92%** reduction in net loss - The company's business is now split into two main lines: used luxury car leasing and commodities trading. The car leasing business was severely impacted by COVID-19 closures in Q1 2020[120](index=120&type=chunk)[121](index=121&type=chunk) - The commodities trading business, started in late 2019 through the Huamucheng VIE, involves purchasing and selling non-ferrous metals and providing supply chain management services[127](index=127&type=chunk)[128](index=128&type=chunk) | Performance vs. Prior Year | Q1 2020 (USD) | Q1 2019 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$1,483,060** | **$399,999** | **+271%** | | Income from operating leases | $14,051 | $399,999 | -96% | | **Gross Profit** | **$327,886** | **$162,348** | **+102%** | | SG&A Expenses | ($425,115) | ($1,906,319) | -78% | | **Net Loss** | **($139,972)** | **($1,829,826)** | **-92%** | - Subsequent to the quarter end, the company raised approximately **$79.5 million** in proceeds from equity financing transactions, expected to fund commodity trading expansion[154](index=154&type=chunk)[155](index=155&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section is not applicable for the reporting period - The company has indicated that quantitative and qualitative disclosures about market risk are not applicable[165](index=165&type=chunk) [Controls and Procedures](index=38&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were not effective as of March 31, 2020. No material changes were made to the internal control over financial reporting during the quarter - The company's management concluded that disclosure controls and procedures were not effective as of the end of the period covered by this report[166](index=166&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[168](index=168&type=chunk) Part II. Other Information [Legal Proceedings](index=39&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Updates on legal matters include the settlement of the 2015 Derivative Action, withdrawal of the Sorghum appeal, and a new lawsuit against Harrison Fund - The 2015 shareholder derivative action was settled and dismissed in July 2019[169](index=169&type=chunk)[170](index=170&type=chunk) - In the 2017 arbitration with Sorghum, the arbitration award in favor of the company was vacated, and the company withdrew its appeal in November 2019[171](index=171&type=chunk)[173](index=173&type=chunk) - In April 2020, the company filed a lawsuit against Harrison Fund, LLC to recover a **$1,000,000** investment made in May 2019[175](index=175&type=chunk)[176](index=176&type=chunk) [Risk Factors](index=41&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K filed on May 29, 2020 - The company states that there have been no material changes to the risk factors disclosed in its annual report on Form 10-K for the year ended December 31, 2019[176](index=176&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) In Q1 2020, the company agreed to sell **$30 million** in convertible notes and warrants, leading to the issuance of **40 million** common shares in April 2020 - On January 22, 2020, the company agreed to sell **$30 million** in convertible notes and warrants to purchase **20 million** shares of common stock[177](index=177&type=chunk) - The notes have a 12-month maturity, a **7.5%** interest rate, and a conversion price of **$1.50** per share. The warrants have a five-year term and an exercise price of **$1.80** per share[178](index=178&type=chunk)[179](index=179&type=chunk) - In April 2020, the holders converted the notes and exercised the warrants, leading to the issuance of **40 million** shares of common stock on May 18, 2020[180](index=180&type=chunk) [Exhibits](index=42&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the report, including certificates of incorporation, forms of warrants, various agreements, and officer certifications

[PART I](index=6&type=section&id=PART%20I) [Item 1. Description of Business](index=7&type=section&id=Item%201.%20Description%20of%20Business) TD Holdings, Inc. operates two primary business lines in China: a used luxurious car leasing business and a non-ferrous metal commodities trading business - The company's current operations consist of leasing luxurious pre-owned automobiles and a non-ferrous metal commodities trading business in China[13](index=13&type=chunk) - The company operates through two Variable Interest Entities (VIEs): Beijing Tianxing Kunlun Technology Co. Ltd for the car leasing business and Shenzhen Huamucheng Trading Co., Ltd. for commodities trading[14](index=14&type=chunk) - The company disposed of its Micro-lending Business in July 2018 for **$500,000** due to high default rates and the inability to meet Nasdaq's minimum stockholder equity or market value requirements[19](index=19&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) 2019 Revenue by Business Segment | Business Segment | Revenue (USD) | | :--- | :--- | | Used Luxurious Car Leasing | $1,830,148 | | Commodities Trading | $100,427 | | Supply Chain Management Services | $562,586 | [Corporate Structure and VIE Arrangements](index=12&type=section&id=Corporate%20Structure%20and%20VIE%20Arrangements) Outlines the company's Delaware holding structure and control over PRC operations through VIEs Beijing Tianxing and Huamucheng via contractual arrangements - TD Holdings, Inc. is a Delaware holding company that controls its PRC operations through a series of subsidiaries and contractual arrangements with two VIEs, Beijing Tianxing and Huamucheng[44](index=44&type=chunk) - The company has undergone several name changes, from China Commercial Credit, Inc. to China Bat Group, Inc., then Bat Group, Inc., and finally to TD Holdings, Inc. in March 2020[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - The VIE agreements (including Exclusive Business Cooperation, Share Pledge, Exclusive Option, and Power of Attorney) are designed to provide the company's WFOE, Hao Limo, with effective control over the operations and economic benefits of Beijing Tianxing and Huamucheng[53](index=53&type=chunk)[66](index=66&type=chunk) [Business Operations](index=17&type=section&id=Business%20Operations) Details the operations of the used luxurious car leasing business and the commodities trading segment, including fleet, product focus, and supply chain services - The Used Luxurious Car Leasing business operates with a fleet of **11** owned vehicles valued at **$2.43 million**, supplemented by a car-pooling arrangement with peer companies[77](index=77&type=chunk)[81](index=81&type=chunk)[91](index=91&type=chunk) - The Commodities Trading business, launched in November 2019, focuses on non-ferrous metals like aluminum, copper, silver, and gold[99](index=99&type=chunk)[102](index=102&type=chunk)[112](index=112&type=chunk) - The company also offers Supply Chain Management Services, including distribution services for suppliers (**1-1.5%** commission) and loan recommendation services for customers (**2-5%** referral fee)[119](index=119&type=chunk)[120](index=120&type=chunk) [Competition and Strategy](index=24&type=section&id=Competition%20and%20Strategy) Outlines the competitive landscape for both car leasing and commodities trading, along with the company's strategic plans for maintaining and expanding its businesses - In the car leasing business, the company competes with established players like Benson, V-FLY Travel, and Wagons[125](index=125&type=chunk) - In commodities trading, competitors include large domestic providers such as Xiamen International Trade and Yijian Shares[126](index=126&type=chunk) - The company's strategy for the car leasing business is to maintain its current stock and operations, while the commodities trading strategy focuses on expanding into new products (ore, crude oil, coal) and markets (Southeast Asia)[122](index=122&type=chunk)[123](index=123&type=chunk) - Competitive strengths cited include strong risk control measures, transparent pricing, qualified customer service, and an experienced management team for the commodities business[128](index=128&type=chunk)[131](index=131&type=chunk)[133](index=133&type=chunk) [Applicable Government Regulations](index=28&type=section&id=Applicable%20Government%20Regulations) Discusses PRC regulations affecting foreign investment in car rental, foreign currency exchange, and share incentive plans for domestic residents - Foreign investment in the car rental business is permitted under PRC law, but local regulations in cities like Beijing and Shanghai impose specific requirements, such as filings or special licenses for rental vehicles[142](index=142&type=chunk)[143](index=143&type=chunk)[149](index=149&type=chunk) - The company is subject to PRC laws on foreign currency exchange, which permit free convertibility for current account items (like dividends) but require approval for capital account items[170](index=170&type=chunk) - PRC regulations require domestic residents participating in overseas share incentive plans to register with the State Administration of Foreign Exchange (SAFE)[180](index=180&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, regulatory, and market risks, including limited operating history, VIE structure uncertainties, and COVID-19 impacts - The company's limited operating history in both used car leasing (started May 2018) and commodities trading makes it difficult to evaluate future business prospects[193](index=193&type=chunk) - The business is highly dependent on access to desirable vehicle inventory and is sensitive to changes in the prices of pre-owned vehicles, which could affect revenues and margins[212](index=212&type=chunk)[217](index=217&type=chunk) - The commodities trading business is cyclical, and demand can be volatile[251](index=251&type=chunk) - The supply chain management services segment derives a substantial portion of its revenue from a small number of clients[261](index=261&type=chunk) - The reliance on a VIE structure in the PRC is a major risk, potentially leading to severe penalties including revocation of business licenses if deemed non-compliant by PRC authorities[287](index=287&type=chunk)[288](index=288&type=chunk) - The COVID-19 pandemic poses a significant risk, potentially causing disruptions to the supply chain, closure of facilities, and reduced demand for both car leasing and commodities trading[338](index=338&type=chunk)[339](index=339&type=chunk) [Item 1B. Unresolved Staff Comments](index=57&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[340](index=340&type=chunk) [Item 2. Description of Property](index=58&type=section&id=Item%202.%20Description%20of%20Property) The company does not own any real property, leasing its principal executive offices in Beijing and an additional office in Shenzhen, China - The company leases its principal executive office in Haidian District, Beijing, with the lease running until September 17, 2020[342](index=342&type=chunk) - An additional office is leased in Futian District, Shenzhen, with a lease term from January 1, 2020, to June 30, 2021[343](index=343&type=chunk) [Item 3. Legal Proceedings](index=58&type=section&id=Item%203.%20Legal%20Proceedings) The company has settled past class action and derivative lawsuits, dismissed a 2018 matter, and filed a new lawsuit to recover a **$1 million** investment - The 2014 Securities Class Action, related to the former loan guarantee business, was settled with a payment of **$245,000** in cash and the issuance of **950,000** shares of common stock, with the settlement finalized[350](index=350&type=chunk)[351](index=351&type=chunk) - The 2015 Shareholder Derivative Action was settled and dismissed in July 2019, with the company agreeing to adopt certain corporate governance reforms[355](index=355&type=chunk)[356](index=356&type=chunk) - A 2018 court matter with Shanghai Nonobank Financial Information Service Co. Ltd., which sought to recover approximately **$3.5 million**, was dismissed in its entirety as against the company in July 2019[362](index=362&type=chunk)[363](index=363&type=chunk) - In April 2020, the company filed a lawsuit against Harrison Fund, LLC to recover a **$1 million** investment made in May 2019, for which the company has recorded a full investment impairment loss due to the uncertainty of recovery[284](index=284&type=chunk)[364](index=364&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[365](index=365&type=chunk) [PART II](index=62&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=62&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under 'GLG'; no dividends were paid in 2019, with future payments subject to PRC regulations - The company's common stock is listed on the NASDAQ Capital Market under the symbol "GLG"[366](index=366&type=chunk) - The company did not declare or pay any dividends in 2019 and does not plan to in the foreseeable future, citing the need to finance business growth[368](index=368&type=chunk) - Dividend distributions are subject to PRC regulations, which require wholly foreign-owned enterprises to set aside at least **10%** of after-tax profits into reserve funds until the fund reaches **50%** of registered capital[369](index=369&type=chunk) [Item 6. Selected Financial Data](index=62&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable - Not applicable[370](index=370&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=63&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Total revenue increased significantly in 2019, but a substantial net loss resulted from surging operating costs and impairment charges, offset by post-year-end equity financing - The significant increase in total revenue was driven by the expansion of the car leasing business and the introduction of the commodities trading and supply chain management services in December 2019[390](index=390&type=chunk) - The substantial increase in net loss from continuing operations was primarily due to a sharp rise in operating costs associated with the new and expanded businesses, increased SG&A expenses, and significant impairment charges on various investments totaling over **$3.3 million**[401](index=401&type=chunk)[407](index=407&type=chunk)[408](index=408&type=chunk) - The company's liquidity was a concern due to a net loss and cash outflow from operations, but management believes it can continue as a going concern, citing positive working capital, collection of receivables, and significant post-year-end equity financing of **$79.5 million**[418](index=418&type=chunk)[421](index=421&type=chunk)[422](index=422&type=chunk) Results of Operations Summary (2019 vs. 2018) | Metric | 2019 (USD) | 2018 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$2,493,161** | **$488,062** | **411%** | | Gross Profit | $359,630 | $416,810 | -14% | | Total Operating Costs | ($2,133,531) | ($71,252) | 2,894% | | Net Loss from Continuing Operations | ($6,942,522) | ($2,320,472) | 199% | | Net (Loss) Income | ($6,942,522) | $7,647,157 | -191% | [Results of Operations](index=66&type=section&id=Results%20of%20Operations) Analyzes the drivers behind the 2019 revenue growth, including the car leasing and new commodities businesses, and explains the surge in operating costs and other expenses - Operating lease income grew **275%** year-over-year, driven by an increase in the number of self-owned cars from **6** to **11** and a significant expansion of the sub-leasing business with peer companies and individuals[397](index=397&type=chunk)[398](index=398&type=chunk) - Operating costs increased by **2,894%** to **$2.13 million**, primarily due to a **$1.47 million** increase in operating lease expenses and the new costs associated with the commodities business[401](index=401&type=chunk) - Other expenses totaled **$3.31 million** in 2019, driven by impairment losses on investment securities (**$200,000**), financial products (**$1,000,000**), and equity investees (**$2,098,737**)[408](index=408&type=chunk) Revenue Breakdown (2019 vs. 2018) | Revenue Source | 2019 (USD) | 2018 (USD) | | :--- | :--- | :--- | | Sales of commodity products | $100,427 | $0 | | Supply chain management services | $562,586 | $0 | | Income from operating leases | $1,830,148 | $488,062 | | **Total Revenue** | **$2,493,161** | **$488,062** | [Cash Flows and Capital Resources](index=71&type=section&id=Cash%20Flows%20and%20Capital%20Resources) Examines the company's cash flow activities, including significant increases in cash used in investing and provided by financing, and highlights post-year-end equity financing - Cash used in investing activities increased significantly to **$8.87 million**, primarily for purchases of used cars (**$2.07 million**), investments (**$2.07 million**), and loans to third parties and related parties[427](index=427&type=chunk) - Cash from financing activities was **$11.83 million**, mainly from registered direct offerings (**$4.65 million**), borrowings (**$3.86 million**), and private placements/advances (**$2.19 million**)[429](index=429&type=chunk) - Subsequent to year-end, the company raised approximately **$79.5 million** in equity financing through private placements and the exercise of notes and warrants, significantly bolstering its liquidity position[421](index=421&type=chunk) Summary of Cash Flows (2019 vs. 2018) | Cash Flow Activity | 2019 (USD) | 2018 (USD) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($2,165,632) | ($87,032) | | Net Cash Used in Investing Activities | ($8,873,916) | ($3,272,034) | | Net Cash Provided by Financing Activities | $11,829,704 | $3,806,435 | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable - Not applicable[435](index=435&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=75&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Presents consolidated financial statements for 2019, showing total assets of **$11.39 million**, liabilities of **$5.59 million**, and a net loss of **$6.94 million**, with details on VIEs and subsequent financing - The company adopted ASC 842 (Leases) on January 1, 2019, resulting in the recognition of right-of-use lease assets[645](index=645&type=chunk) - The notes confirm that subsequent to year-end, the company raised significant capital, including **$13.5 million** from a share sale and a further **$66 million** from the issuance and subsequent exercise of convertible notes and warrants[751](index=751&type=chunk)[752](index=752&type=chunk)[756](index=756&type=chunk) Consolidated Balance Sheet Highlights (as of Dec 31, 2019) | Account | Amount (USD) | | :--- | :--- | | Total Current Assets | $7,879,880 | | Total Noncurrent Assets | $3,508,520 | | **Total Assets** | **$11,388,400** | | Total Current Liabilities | $5,435,414 | | Total Noncurrent Liabilities | $152,124 | | **Total Liabilities** | **$5,587,538** | | **Total Equity** | **$5,800,862** | Consolidated Statement of Operations Highlights (Year ended Dec 31, 2019) | Account | Amount (USD) | | :--- | :--- | | Total Revenues | $2,493,161 | | Gross Profit | $359,630 | | Net loss from continuing operations | ($6,942,522) | | **Net Loss** | **($6,942,522)** | | **Loss Per Share (Basic & Diluted)** | **($0.89)** | [Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure](index=75&type=section&id=Item%209.%20Changes%20In%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with accountants on accounting and financial disclosure - None[435](index=435&type=chunk) [Item 9A. Controls and Procedures](index=75&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of December 31, 2019, due to material weaknesses in internal control over financial reporting, with remediation plans underway - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were not effective as of December 31, 2019[436](index=436&type=chunk) - Management identified material weaknesses in internal control over financial reporting, citing that accounting staff lack sufficient U.S. GAAP experience, leading to material audit adjustments and an inadequate financial closing process[443](index=443&type=chunk)[444](index=444&type=chunk)[445](index=445&type=chunk) - The remediation plan includes providing additional training for accounting staff and establishing more comprehensive written policies and procedures for financial reporting[446](index=446&type=chunk)[447](index=447&type=chunk) [Item 9B. Other Information](index=77&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[448](index=448&type=chunk) [PART III](index=78&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=78&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Outlines the company's executive officers, independent directors, and established board committees, noting executive changes and Section 16(a) filing issues - Key executives include Renmei Ouyang (CEO and Chairwoman), Yang An (CFO), Jin Ding (CPO), and Qun Xie (CSO)[450](index=450&type=chunk) - The Board has four independent directors: Kecen Liu, Siyuan Zhu, Weicheng Pan, and Jialin Cui[461](index=461&type=chunk) - The company has an Audit Committee, Compensation Committee, Nominating and Governance Committee, and a Risk Committee, with Siyuan Zhu identified as the "audit committee financial expert"[462](index=462&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk)[467](index=467&type=chunk) - The company notes that Section 16(a) filings for officers, directors, and major shareholders were not timely made during fiscal year 2019[469](index=469&type=chunk) [Item 11. Executive Compensation](index=84&type=section&id=Item%2011.%20Executive%20Compensation) Details 2019 executive and director compensation, including salaries for named executive officers and cash fees for non-executive directors, with no stock or option awards granted - No stock awards or option awards were granted to the named executive officers during the fiscal year ended December 31, 2019[480](index=480&type=chunk)[486](index=486&type=chunk) - Non-executive director compensation for 2019 consisted of cash fees, with Weicheng Pan receiving **$20,000**, Kecen Liu receiving **$10,000**, and Jialin Cui and Siyuan Zhu each receiving **$5,000**[488](index=488&type=chunk) 2019 Executive Compensation Summary | Name and Principal Position | Salary ($) | | :--- | :--- | | Renmei Ouyang (CEO, Former COO) | 50,000 | | Yang An (CFO) | 30,000 | | Jin Ding (CPO) | 40,000 | | Jiaxi Gao (Former CEO) | 40,000 | | Long Yi (Former CFO) | 25,000 | [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=86&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Identifies Shuxiang Zhang as the sole **5%** beneficial owner with a **13.006%** stake, while directors and executive officers collectively own less than **1%** - As of May 29, 2020, Shuxiang Zhang is the only **5%** or greater stockholder, beneficially owning **8,920,000 shares**, or **13.006%** of the class[494](index=494&type=chunk) - The company's directors and executive officers as a group (9 persons) beneficially own **0%** (less than **1%**) of the outstanding common stock[492](index=492&type=chunk)[494](index=494&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=87&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Details significant related party transactions in 2019, including loans, purchases, and services, with notable balances due from and to related parties like Qianhai Baiyu - The company purchased aluminum ingots worth **$100,180** from Qianhai Baiyu and also incurred costs of **$489,231** for supply chain management services provided by the same related party[506](index=506&type=chunk)[507](index=507&type=chunk) - The company lent approximately **$2.84 million** to Qianhai Baiyu in December 2019, charging **10%** annual interest[510](index=510&type=chunk) - The company borrowed funds from several related parties, including a loan of up to **$1.3 million** from Guangzhou Chengji, an entity controlled by independent director Weicheng Pan[511](index=511&type=chunk)[512](index=512&type=chunk)[513](index=513&type=chunk) Related Party Balances (as of Dec 31, 2019) | Balance Type | Amount (USD) | | :--- | :--- | | Due from related parties | $3,310,883 | | Due to related parties (current) | $1,017,362 | | Related party loan (noncurrent) | $152,124 | [Item 14. Principal Accountant Fees and Services](index=91&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Details principal accountant fees for 2019 and 2018, showing **$195,000** in audit fees for 2019, a decrease from **$260,000** total in 2018, with all services pre-approved - All audit and non-audit services provided by the independent auditors were pre-approved by the Audit Committee in accordance with its established policies[518](index=518&type=chunk) Accountant Fees (2019 vs. 2018) | Fee Type | 2019 (USD) | 2018 (USD) | | :--- | :--- | :--- | | Audit Fees | $195,000 | $120,000 | | Audit-related Fees | $0 | $140,000 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | | **Total** | **$195,000** | **$260,000** | [PART IV](index=92&type=section&id=PART%20IV) [Item 15. Exhibits, Financial Statement Schedules](index=92&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) Lists included financial statements and comprehensive exhibits, such as corporate documents, securities agreements, and VIE contracts, with financial schedules omitted - The financial statements and the report of the independent registered public accounting firm are included starting on page F-1 of the report[520](index=520&type=chunk) - Financial statement schedules have been omitted because the required information is not present or is included within the consolidated financial statements and notes[521](index=521&type=chunk) - Key exhibits filed include various securities purchase agreements from 2019 and 2020, forms of warrants, and the full set of VIE agreements for the Huamucheng commodities trading business[522](index=522&type=chunk)[523](index=523&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number: 001-36055 Bat Group, Inc. (Exact name of registrant as specified in its charter) | --- | --- | |------------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number: 001-36055 Bat Group, Inc. (Exact name of registrant as specified in its charter) | --- | --- | |------------------------ ...