Financial Performance - Total revenue decreased by $44,298,941 or 22%, from $201,134,242 in 2021 to $156,835,301 in 2022, primarily due to decreased demand and the impact of COVID-19[203] - Revenue from sales of commodity products was $155,443,398 in 2022, down from $173,904,016 in 2021, representing a decrease of $18,460,618 or 11%[201] - Supply chain management services revenue decreased by $1,788,324 or 56%, from $3,180,227 in 2021 to $1,391,903 in 2022[201] - The cost of revenue decreased by $42,328,585 or 21%, from $198,125,629 in 2021 to $155,797,044 in 2022[206] - Gross profit for 2022 was $1,038,257, down from $3,008,613 in 2021, indicating a decline of $1,970,356 or 65%[201] - Net income for 2022 was $4,253,537, compared to a net loss of $940,357 in 2021, representing an increase of $5,193,894 or 552%[201] Cash Flow and Investments - The Company reported cash inflows of $4,335,359 from operating activities for the year ended December 31, 2022, a decrease of $3,698,651 from $8,034,010 in 2021[218] - Net cash used in investing activities for the year ended December 31, 2022 was $125,537,746, compared to $71,520,955 in 2021[220] - The Company raised a total of $117.42 million from private placements and convertible promissory notes during the year ended December 31, 2022[214] - The Company paid $96,638,468 for the acquisition of Tongdow Internet Technology as part of its investing activities[220] Financing Activities - The company settled convertible promissory notes totaling $1,250,000 between December 30, 2022, and March 2, 2023, issuing a total of 1,487,000 shares of common stock[195] - The company entered into a securities purchase agreement on January 9, 2023, selling 35,000,000 shares at $1.21 per share, generating gross proceeds of $42.35 million[196] Internal Controls and Governance - The Company’s disclosure controls and procedures were deemed ineffective as of December 31, 2022, impacting timely reporting[225] - Internal controls are designed to ensure reliable financial reporting and compliance with U.S. GAAP[226] - Management assessed that internal control over financial reporting was not effective as of December 31, 2022, based on COSO 2013 criteria[230] - The company identified material weaknesses in internal controls, including insufficient U.S. GAAP knowledge among accounting staff and inadequate supervisory review[231] - Management plans to implement additional written policies and procedures for accounting and financial reporting in 2023 to improve the financial statement closing process[234] - A new accounting manager has been appointed to enhance the internal review process and improve compliance with U.S. GAAP[236] - The company will establish an internal audit function to assist the Audit Committee with compliance requirements and improve overall internal control[234] - Management intends to provide ongoing training for financial and accounting staff to enhance their understanding of U.S. GAAP and internal controls[235] - The Audit Committee includes independent directors who evaluate the performance of the independent auditor and oversee internal accounting controls[248] - The Audit Committee is responsible for overseeing internal accounting control and corporate governance functions, ensuring compliance with SEC and NASDAQ standards[248] Related Party Transactions - Related party transactions were conducted without adequate control, highlighting a need for improved procedures and documentation[232] - The company has established control processes for significant payments and maintaining documentation for non-routine transactions[236] Director and Officer Compliance - No Director Nominee has been subject to bankruptcy petitions or criminal proceedings in the past ten years[256] - No Director Nominee has been found to have violated any Federal or State securities law, with no subsequent reversals[256] - No Director Nominee has faced sanctions or orders from self-regulatory organizations that have not been reversed[256] Other Financial Information - For the year ended December 31, 2022, interest income was $17,035,200, an increase of $6,955,424, or 69% from $10,079,776 in 2021[212] - As of December 31, 2022, the Company had positive working capital of approximately $87 million[213] - The Company recognized $324,000 in share-based payment for service related to a settlement agreement on December 16, 2022[210] - The Company issued 750,000 fully-vested warrants valued at $1,695,042 on March 4, 2021, with an exercise price of $0.01[210] - As of December 31, 2022, the Company had a lease obligation totaling $188,650, with a monthly rental fee of approximately $8,202[222] - The Company appointed a new accounting manager to enhance the internal review process[236] - Additional written policies and procedures for accounting and financial reporting have been established to improve the financial statement closing process[236] - A control process for assessing the accounting implications of significant non-routine payments has been implemented[236] - Training for financial and accounting staff has been provided to enhance understanding of U.S. GAAP and internal controls[237] - Heung Ming (Henry) Wong is identified as an "audit committee financial expert" under SEC regulations[249] - The company plans to retain additional independent directors to support corporate governance and compliance efforts[234]
TD Holdings(GLG) - 2022 Q4 - Annual Report