PART I. FINANCIAL INFORMATION Financial Statements Unaudited financial statements show total assets increased to $505.1 million, with a net income of $4.6 million for H1 2024 Condensed Consolidated Balance Sheets Total assets grew to $505.1 million by June 30, 2024, driven by increased loans and equity from stock issuances Condensed Consolidated Balance Sheet Highlights (in USD) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $505,053,728 | $455,285,021 | | Cash and cash equivalents | $255,700 | $1,516,358 | | Loans receivable from third parties | $290,613,451 | $240,430,865 | | Goodwill | $156,567,224 | $157,542,081 | | Total Liabilities | $85,144,823 | $72,139,716 | | Contract liabilities | $10,100,999 | $3,090,201 | | Due to related parties | $37,885,166 | $38,121,056 | | Total Equity | $419,908,905 | $383,145,305 | Condensed Consolidated Statements of Operations Despite 21% revenue drop, company achieved $4.6 million net income for H1 2024, driven by interest income and lower SG&A Statement of Operations Summary (in USD) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Total Revenue | $54,555,034 | $69,089,934 | | Gross Loss | ($81,226) | ($123,709) | | Selling, general, and administrative expenses | ($5,071,071) | ($11,073,912) | | Interest Income | $12,759,098 | $9,357,288 | | Net Income (Loss) | $4,579,587 | ($4,386,953) | | Net Income (Loss) Attributable to Stockholders | $5,339,087 | ($3,602,952) | Earnings Per Share (EPS) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Basic EPS | $0.41 | ($1.54) | | Diluted EPS | $0.29 | ($1.42) | Condensed Consolidated Statements of Changes in Equity Total equity increased to $419.9 million by June 30, 2024, due to a $36.9 million private placement and net income - The company issued 30,000,000 shares of common stock in connection with private placements, resulting in an increase of $36.9 million in equity15 - Net income for the period contributed $4.6 million to equity, while foreign currency translation adjustments resulted in a decrease of $5.3 million16 Condensed Consolidated Statements of Cash Flows Net cash used in operations was $34.6 million for H1 2024, offset by $36.9 million from financing, leading to cash decrease Cash Flow Summary (in USD) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash from Operating Activities | ($34,598,947) | $7,181,538 | | Net cash from Investing Activities | ($668) | ($51,297,876) | | Net cash from Financing Activities | $36,900,000 | $45,909,073 | | Net (decrease)/increase in cash | ($1,260,658) | $385,724 | | Cash at end of period | $255,700 | $1,278,781 | Notes to Financial Statements Key notes detail commodity trading, $290.6 million in loans receivable, and recent equity transactions - The company's primary business is commodity trading and supply chain management services in the PRC25 - Loans receivable from third parties increased to $290.6 million as of June 30, 2024, from $240.4 million at year-end 2023. These loans carry an interest rate of 10.95% per annum43 - In June 2024, the company raised gross proceeds of $36.9 million by selling 30,000,000 shares of common stock at $1.23 per share in a private placement74 - A 1-for-50 reverse stock split was completed on October 30, 2023. All share and per-share amounts have been retroactively restated80 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A attributes revenue decline to market weakness, net income improved due to increased interest income and reduced SG&A Results of Operations H1 2024 revenue fell 21% to $54.6 million, net income improved to $4.6 million due to lower SG&A and higher interest income Comparison of Results for Six Months Ended June 30 (in USD) | Metric | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $54,555,034 | $69,089,934 | (21)% | | Gross Loss | ($81,226) | ($123,709) | (34)% | | SG&A Expenses | ($5,071,071) | ($11,073,912) | (54)% | | Total Other Income, Net | $12,434,235 | $8,647,927 | 44% | | Net Income (Loss) | $4,579,587 | ($4,386,953) | 204% | - The decrease in commodity product revenue was mainly due to a lower average unit sales price for zinc ingots, which fell from $3.32/kg in H1 2023 to $2.76/kg in H1 2024131 - The 54% decrease in SG&A expenses was primarily due to the absence of $5.7 million in stock-based compensation expenses that were recorded in H1 2023135 Liquidity and Capital Resources Working capital was $262.0 million; operations used $34.6 million cash, offset by $36.9 million from equity financing - The company reported a working capital of approximately $261.97 million as of June 30, 2024138 - Net cash used in operating activities was $34.6 million, a decrease of $41.8 million from the prior year, largely due to a $50.8 million increase in funds lent as loan receivables142143 - Financing activities provided $36.9 million in cash, mainly from the issuance of 30,000 shares of common stock in a private placement146 Controls and Procedures Management found disclosure controls ineffective due to insufficient accounting expertise and lack of policy manual - Management concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2024151 - Identified material weaknesses include a lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements153 - The company has engaged an external consulting firm and plans to hire more qualified accounting personnel to remediate the weaknesses154155 PART II. OTHER INFORMATION Risk Factors No material changes to risk factors previously disclosed in the Form 10-K filed on March 22, 2024 - There have been no material changes to the risk factors previously disclosed in the Form 10-K filed on March 22, 2024159 Unregistered Sales of Equity Securities and Use of Proceeds The company settled $450,000 in convertible notes by issuing 472,341 shares of common stock in H1 2024 - During the six months ended June 30, 2024, the company settled convertible promissory notes totaling $450,000 by issuing 160,174, 152,620, and 159,547 shares of common stock on three separate occasions161
TD Holdings(GLG) - 2024 Q2 - Quarterly Report