QINGDAO, China, June 15, 2020 /PRNewswire/ -- TDH Holdings, Inc.
(NASDAQ: PETZ) ("TDH" or the "Company"), a PRC-based company that
specializes in the development, manufacturing and sales of pet food
products in China and beyond, announced today its financial
results for the twelve months ended December 31, 2019.
Full Year 2019 Financial Highlights:
|
|
For the
Twelve Months Ended December 31,
|
($ millions,
except per share data)
|
|
2019
|
|
2018
|
|
%
Change
|
Revenues
|
|
$12.65
|
|
$23.67
|
|
-46.6%
|
Gross profit
(loss)
|
|
($1.52)
|
|
($4.05)
|
|
-62.4%
|
Gross profit
(loss) margin
|
|
-12.0%
|
|
-17.1%
|
|
5.1 pp*
|
Operating
income (loss)
|
|
($6.96)
|
|
($14.04)
|
|
-50.5%
|
Operating
income (loss) margin
|
|
-55.0%
|
|
-59.3%
|
|
4.3 pp*
|
Net income
(loss) attributable to common stockholders
|
|
($8.63)
|
|
($14.22)
|
|
-39.3%
|
Earnings (loss)
per share - basic and diluted
|
|
($0.41)
|
|
($1.49)
|
|
-72.5%
|
|
|
|
|
|
|
|
* pp:
percentage points
|
|
|
|
|
|
|
- Revenues decreased by 46.6% from $23.67
million to $12.65 million for the year of 2019,
with decrease in sales from overseas markets, domestic market and
E-commerce platform. The decrease in total revenues in 2019 was
mainly due to: (1) decrease in sales orders due to our
uncompetitive sales price; (2) suspension of our overseas
E-commerce business due to continuous losses; and (3) cessation of
our manufacturing activities in late 2019 in view of rising raw
material costs. As a result, we received reduced sales
orders from our customers and our sales volume significantly
decreased in 2019 as compared to 2018.
- Gross loss was $1.52 million for the year of 2019 as
compared to gross loss of $4.05 million for 2018.
This loss in 2019 was mainly due to rising raw material costs, such
as chicken, beef and pork, write-down of obsolete inventories and
low productivity after the relocation of one of our main production
facilities. The decrease in gross loss was a result of stop
taking unprofitable orders, and the slightly improvement of our
cost management.
- Operating loss was $6.96 million for the year of 2019
as compared to operating loss of $14.04 million for 2018.
The continuous deficit from operation was mainly due to the
fact that our sales revenue continued to decrease, while the raw
material cost increased continuously and significantly through
the year. The decrease in loss from operations was the
combined result of improvement in gross margin and decrease in
operating expenses.
- Net loss attributable to common stockholders was $8.63
million, or loss per share of $0.41, for the year of 2019 as
compared to net loss of $14.22 million, or loss per share
of $1.49, for 2018.
Full Year 2019 Financial Results
Revenues
The Company generates its revenues from product sales, mainly
including sales for pet chews, dried pet snacks and wet canned pet
foods in oversea markets, domestic markets and by e-commerce
platform. Revenue consists of the invoiced value for the sales, net
of value-added tax ("VAT"), business tax, and applicable local
government levies. For the year of 2019, total revenues decreased
by $11.03 million, or 46.6%, to $12.65
million from $23.67 million in 2018. The
decrease in total revenues in 2018 was mainly due to: (1) decrease
in sales orders due to our uncompetitive sales price; (2)
suspension of our overseas E-commerce business due to continuous
losses; and (3) cessation of our manufacturing activities in late
2019 in view of rising raw material costs. As a
result, we received reduced sales orders from our customers and our
sales volume significantly decreased in 2019 as compared to
2018.
|
|
For the
Twelve Months Ended December 31,
|
|
|
2019
|
|
|
2018
|
|
|
Y/Y
Change
|
|
|
Revenues
($'000)
|
|
% of
Total
|
|
|
Revenues
($'000)
|
|
% of
Total
|
|
|
Amount
($'000)
|
|
%
|
Overseas
|
$
|
9,995
|
|
79.0%
|
|
$
|
15,832
|
|
66.9%
|
|
$
|
(5,837)
|
|
-36.9%
|
Domestic
|
|
2,711
|
|
21.4%
|
|
|
4,102
|
|
17.3%
|
|
|
(1,391)
|
|
-33.9%
|
E-commerce
|
|
84
|
|
0.7%
|
|
|
3,801
|
|
16.1%
|
|
|
(3,717)
|
|
-97.8%
|
less: sales tax
and additional surcharge
|
|
(142)
|
|
-1.1%
|
|
|
(61)
|
|
-0.3%
|
|
|
(81)
|
|
131.3%
|
Total
|
$
|
12,648
|
|
100.0%
|
|
$
|
23,674
|
|
100.0%
|
|
$
|
(11,026)
|
|
-46.6%
|
Overseas sales decreased by $5.84 million, or 36.9%,
to $10.00 million for the year of
2019 from $15.83 million for 2018. Domestic sales
decreased by $1.39 million, or 33.9%,
to $2.71 million for the year of
2019 from $4.10 million for 2018. These decrease
were due to the decrease in sales orders due to our uncompetitive
sales price, and temporary suspension of our manufacturing
activities in 2019. Sales from the e-commerce channel
decreased by $3.72 million, or 97.8%, to $0.08
million for the year of 2019 from $3.80 million
for 2018, due to suspension of our overseas E-commerce business as
the losses continue to grow.
|
For the
Twelve Months Ended December 31,
|
|
|
2019
|
|
|
2018
|
|
|
Y/Y
Change
|
|
|
Revenues
($'000)
|
|
% of
Total
|
|
|
Revenues
($'000)
|
|
% of
Total
|
|
|
Amount
($'000)
|
|
%
|
Pet
chews
|
$
|
6,470
|
|
51.2%
|
|
$
|
6,272
|
|
26.5%
|
|
$
|
198
|
|
3.2%
|
Dried pet
snacks
|
|
4,618
|
|
36.5%
|
|
|
13,611
|
|
57.5%
|
|
|
(8,993)
|
|
-66.1%
|
Wet canned pet
food
|
|
1,310
|
|
10.4%
|
|
|
2,782
|
|
11.8%
|
|
|
(1,472)
|
|
-52.9%
|
Dental health
snacks
|
|
305
|
|
2.4%
|
|
|
496
|
|
2.1%
|
|
|
(190)
|
|
-38.4%
|
Baked pet
biscuits
|
|
87
|
|
0.7%
|
|
|
95
|
|
0.4%
|
|
|
8
|
|
-8.2%
|
Others
|
|
-
|
|
0%
|
|
|
480
|
|
2.0%
|
|
|
(480)
|
|
-100%
|
Less: sales tax
and additional surcharge
|
|
(142)
|
|
-1.1%
|
|
|
(61)
|
|
-0.3%
|
|
|
(81)
|
|
131.1%
|
Total
|
$
|
12,648
|
|
100.0%
|
|
$
|
23,674
|
|
100.0%
|
|
$
|
(11,026)
|
|
-46.6%
|
Sales of pet chews increased by $0.20 million, or 3.2%,
to $6.47 million for the year of 2019 from $6.27
million for 2018. Sales of dried pet snacks decreased
by $8.99 million, or 66.1%, to $4.62 million for the
year of 2019 from $13.61 million for 2018. Sales of wet
canned pet food decreased by $1.47 million, or 52.9%,
to $1.31 million for the year of 2019 from $2.78
million for 2018. Sales of dental health snacks decreased
by $0.19 million, or 38.4%, to $0.31 million for the
year of 2019 from $0.50 million for 2018. The foregoing
decrease was mainly due to our rejecting certain unprofitable
orders, suspension of our overseas E-commerce business and
suspension of our manufacturing activities from late
2019. Sales of pet chews, dried pet snacks, wet canned pet
food, and dental health snacks accounted for 51.2%, 36.5%, 10.4%,
and 2.4%, respectively, for the year of 2019, compared to 26.5%,
57.5%, 11.8%, and 2.1%, respectively, for 2018.
Cost of revenues
Cost of revenues consists primarily of raw materials, labor and
factory overhead. Cost of revenues decreased
by $13.56 million, or 48.9%, to $14.17 million for
the year of 2019 from $27.73 million for 2018. This
decrease in cost of revenues was mainly due to the 46.57% decrease
in our total net revenue for the year ended December 31, 2019. As a percentage of revenues,
cost of revenues was 112.0% for the year of 2019, compared to
117.1% for 2018.
Gross profit (loss) and gross profit (loss) margin
Gross loss was $1.52 million for the year of 2019,
compared to gross profit of $4.05 million for 2018. Gross
loss margin was 12.0% for the year of 2019, compared to gross loss
margin of 17.1% for 2018.
Operating expense
Operating expense consists of selling expenses, general and
administrative expenses and research and development expenses.
Selling expenses decreased by $3.62 million, or 79.7%,
to $0.92 million for the year of 2019 from $4.54
million for 2018. The decrease in our selling price was in
line with our decreased revenue in 2019.
General and administrative expenses increased by $0.91
million, or 32.6%, to $3.70 million for the year of 2019
from $2.79 million for 2018. The increase was mainly
resulted from the increase in bad debt expenses and an increase in
severance compensation to the employees due to suspension of
production at our plants since late October
2019.
Research and development expense decreased by $1.06
million, or 100%, to $Nil million for the year of 2019
from $1.06 million for 2018.
The Company also incurred impairment of long-lived assets other
than goodwill charge of $0.81 million for the year of
2019, compared to $0 for 2018.
Due to our continuous operating loss in 2019, we reassessed our
long-lived assets based on a forecast of the Company's future
performance.
As a result, total operating expenses decreased by $4.56
million, or 45.6%, to $5.43 million for the year of 2019
from $9.99 million for 2018. As a percentage of total
revenues, total operating expenses was 43.0% for the year of 2019,
compared to 42.2% for 2018.
Operating income (loss) and operating income (loss)
margin
Loss from operations was $6.96 million for the year of
2019, compared to operating loss of $14.04 million for
2018. The decrease in income from operations was the combined
result of decrease in revenues and increases in cost of goods sold
and operating expenses.
Net Income (loss) and earnings (loss) per share
Net loss was $8.63 million for the year of 2019,
compared to net loss of $14.22 million for 2018. After
deducting for noncontrolling interest, net loss attributable to
common stockholders was $8.63 million, or loss per share
of $0.41, for the year of 2019. This is compared to net loss
attributable to common stockholders of $14.22 million, or
earnings per share of $1.49, for 2018.
Financial Conditions
As of December 31, 2019, the Company had cash, cash
equivalents and restricted cash of $6.50 million, compared
to $2.70 million at December 31, 2018. Accounts
receivable and inventories were $0.02
million and $0.47 million, respectively, as
of December 31, 2019, compared to $0.85
million and $3.02 million, respectively, at the end of
2018. Total working capital deficit was $7.27 million as
of December 31, 2019, as compared to working capital deficit
of $11.34 million at the end of 2018.
Net cash used in operating activities was $5.63
million for the year of 2019, compared to $2.17
million for 2018. Net cash provided by investing activities
was $0.11 million for the year of 2019, compared
to used in investing activities of $6.59 million for 2018. Net cash provided by
financing activities was $9.52 million for the year of
2019, compared to $7.73 million for 2018.
Going Concern
As reflected in our consolidated financial statements, our
revenue decreased by approximately $11
million from approximately $23.6
million in 2018 to approximately $12.6 million in 2019. Net cash used in operating
activities amounted to approximately $5.6
million for the year ended December
31, 2019. As of December 31,
2019, we had working capital deficit of approximately
$7.3 million as compared to working
capital deficit of approximately $11.3
million as of December 31,
2018. In addition, in November
2019, we temporarily suspended our manufacturing activities
due to rising raw material costs and continued losses in our
operations. The suspension of our manufacturing activities led to
reduced sales and operating cash flows, and consequently caused our
inability to make the payments to settle vendor bills. In addition,
some lenders were demanding loans to be paid off upon maturity. As
a result, in late 2019, some of our vendors and several of the
financial institutions initiated lawsuits against us for payment.
To the extent such claims the Company prevail and the Company is
unable to settle them on terms favorable to it, the Company's
financial condition will be materially adversely affected in 2020.
Furthermore, in December 2019, a
novel strain of coronavirus (COVID-19) surfaced. COVID-19 has
spread rapidly throughout China
and worldwide, which has caused significant volatility in the PRC
and international markets. There is significant uncertainty around
the breadth and duration of business disruptions related to
COVID-19, as well as its impact on the PRC and international
economies. To reduce the spread of the COVID-19, the Chinese
government has employed measures including city lockdowns,
quarantines, travel restrictions, suspension of business activities
and school closures. Due to difficulties resulting from the
COVID-19 outbreak and all the other aspects of our operating
challenges, including, but not limited to, the extending temporary
closure of our facilities and operations to until the middle of
May 2020, pending lawsuits for
supplier arrears, bank loans and employee compensation, limited
support from the Company's employees, delayed access to raw
material supplies, reduced customer sales orders, and our inability
to promote the sales to customers on a timely basis, our revenue
for the year ended December 31, 2020
will be much lower than expected. These facts raised substantial
doubt about our ability to continue as a going concern for the next
12 months from the date of this report.
Notice
Rounding amounts and percentages: Certain amounts and
percentages included in this press release have been rounded for
ease of presentation. Percentage figures included in this press
release have not in all cases been calculated on the basis of such
rounded figures, but on the basis of such amounts prior to
rounding. For this reason, certain percentage amounts in this press
release may vary from those obtained by performing the same
calculations using the figures in the financial statements. In
addition, certain other amounts that appear in this press release
may not sum due to rounding.
About TDH Holdings, Inc.
Founded in April 2002, TDH Holdings, Inc. (the "Company")
(NASDAQ: PETZ), is a developer, manufacturer and distributer of a
variety of pet food products under multiple brands that are sold in
the China, Asia and Europe. More information
about the Company can be found at www.tiandihui.com.
Safe Harbor Statement
This news release contains forward-looking statements.
Without limiting the generality of the foregoing, words such as
"may," "will," "expect," "believe," "anticipate," "intend,"
"could," "estimate" or "continue" or the negative or other
variations thereof or comparable terminology are intended to
identify forward-looking statements. These statements are only
predictions, uncertainties and other factors may cause the
Company's actual results, levels of activity, performance or
achievements to be materially different from any future results,
levels or activity, performance or achievements expressed or
implied by these forward-looking statements. Specifically, the
Company's statements regarding, among others, its growth and
business outlook, the Company's ability to execute on its business
plan, secure necessary capital to sustain and maintain its
operations, its ability to resume its operations at the previous
levels, its ability to successfully resolve various legal
proceedings in which it is involved, are forward-looking
statements. In addition, any statements that refer to expectations,
projections or other characterizations of future events or
circumstances are forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict and many of which are beyond the control of the
Company. Actual results may differ from those projected in
the forward-looking statements due to risks and uncertainties that
are described more fully in the Company's public reports filed with
the U.S. Securities and Exchange Commission. Although the Company
believes that the assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance that the
results contemplated in forward-looking statements will be
realized. In light of the significant uncertainties inherent
in the forward-looking information included herein, the inclusion
of such information should not be regarded as a representation by
TDH or any other person that their objectives or plans will be
achieved. The Company does not undertake any obligation to revise
the forward-looking statements contained herein to reflect events
or circumstances after the date hereof or to reflect the occurrence
of unanticipated events.
TDH HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
|
December 31,
|
|
December 31,
|
|
2019
|
|
2018
|
|
|
|
|
ASSETS
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
5,114,175
|
|
$
|
893,020
|
Restricted cash,
current
|
|
1,390,403
|
|
|
1,807,485
|
Accounts
receivable
|
|
21,657
|
|
|
845,800
|
Accounts receivable -
related party
|
|
-
|
|
|
435,513
|
Advances to
suppliers
|
|
39,806
|
|
|
77,280
|
Inventories,
net
|
|
473,216
|
|
|
3,019,804
|
Due from related
parties
|
|
-
|
|
|
43,554
|
Prepayments and other
current assets
|
|
153,633
|
|
|
680,606
|
Total current
assets
|
|
7,192,890
|
|
|
7,803,062
|
NON-CURRENT
ASSETS:
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
6,562,669
|
|
|
8,410,525
|
Land use rights,
net
|
|
973,224
|
|
|
1,014,538
|
Long-term
investments
|
|
71,757
|
|
|
201,281
|
Operating lease
right-of-use assets - related parties
|
|
286,670
|
|
|
-
|
Total non-current
assets
|
|
7,894,320
|
|
|
9,626,344
|
Total
assets
|
$
|
15,087,210
|
|
$
|
17,429,406
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Accounts
payable
|
$
|
3,436,939
|
|
$
|
6,220,375
|
Accounts payable -
related parties
|
|
116,834
|
|
|
125,126
|
Notes
payable
|
|
908,008
|
|
|
2,462,044
|
Advances
from customers
|
|
116,155
|
|
|
160,828
|
Bank
overdrafts
|
|
78,320
|
|
|
-
|
Short
term loans
|
|
7,624,061
|
|
|
8,263,038
|
Short term loans -
related parties
|
|
892,510
|
|
|
1,061,360
|
Current portion of
long term loans - related party
|
|
-
|
|
|
68,673
|
Taxes
payable
|
|
57,521
|
|
|
44,319
|
Due to related
parties
|
|
39,387
|
|
|
45,146
|
Operating lease
liabilities - related parties, current
|
|
137,347
|
|
|
-
|
Other current
liabilities
|
|
1,054,818
|
|
|
692,669
|
Total current
liabilities
|
|
14,461,900
|
|
|
19,143,578
|
NON-CURRENT
LIABILITIES:
|
|
|
|
|
|
Deferred tax
liabilities
|
|
1,036
|
|
|
4,929
|
Long term loans -
related party, non-current
|
|
-
|
|
|
217,466
|
Operating lease
liabilities - related party, non-current
|
|
286,875
|
|
|
-
|
Total
liabilities
|
|
14,749,811
|
|
|
19,365,973
|
STOCKHOLDERS' EQUITY
(DEFICIT):
|
|
|
|
|
|
Common stock ($0.001
par value; 200,000,000 shares authorized; 45,849,995 and
10,516,662 shares issued and outstanding at December 31, 2019 and
2018, respectively)
|
|
45,850
|
|
|
10,517
|
Additional paid-in
capital
|
|
21,963,678
|
|
|
10,999,011
|
Stock subscription
receivable
|
|
-
|
|
|
-
|
Statutory
reserves
|
|
160,014
|
|
|
160,014
|
Retained earnings
(Accumulated deficit)
|
|
(21,974,651)
|
|
|
(13,349,232)
|
Accumulated other
comprehensive income
|
|
142,516
|
|
|
243,470
|
Total TDH
Holdings, Inc. stockholders' equity (deficit)
|
|
337,407
|
|
|
(1,936,220)
|
Noncontrolling
interest
|
|
(8)
|
|
|
(347)
|
Total
stockholders' equity (deficit)
|
|
337,399
|
|
|
(1,936,567)
|
Total liabilities
and stockholders' equity (deficit)
|
$
|
15,087,210
|
|
$
|
17,429,406
|
TDH HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
|
|
For The Years
Ended December 31,
|
|
2019
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Net revenue
|
$
|
12,455,414
|
|
$
|
22,154,506
|
|
$
|
28,473,016
|
Net revenue - related
parties
|
|
192,841
|
|
|
1,519,531
|
|
|
506,495
|
Total
revenue
|
|
12,648,255
|
|
|
23,674,037
|
|
|
28,979,511
|
Cost of
revenue
|
|
13,992,499
|
|
|
26,278,300
|
|
|
20,283,321
|
Cost of revenue -
related parties
|
|
178,636
|
|
|
1,448,533
|
|
|
399,177
|
Total cost of
revenue
|
|
14,171,135
|
|
|
27,726,833
|
|
|
20,682,498
|
Gross
profit
|
|
(1,522,880)
|
|
|
(4,052,796)
|
|
|
8,297,013
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling
expense
|
|
920,237
|
|
|
4,535,945
|
|
|
4,882,367
|
General and
administrative expense
|
|
3,702,035
|
|
|
2,792,858
|
|
|
2,095,676
|
Research and
development expense
|
|
-
|
|
|
1,062,582
|
|
|
1,051,665
|
Impairment of
long-lived assets other than goodwill
|
|
813,344
|
|
|
-
|
|
|
-
|
Impairment of
goodwill
|
|
-
|
|
|
1,599,591
|
|
|
-
|
Total operating
expenses
|
|
5,435,616
|
|
|
9,990,976
|
|
|
8,029,708
|
Income (loss) from
operations
|
|
(6,958,496)
|
|
|
(14,043,772)
|
|
|
267,305
|
Interest
expense
|
|
(1,378,755)
|
|
|
(233,101)
|
|
|
(82,946)
|
Government
subsidies
|
|
129,255
|
|
|
81,882
|
|
|
414
|
Other
income
|
|
1,189
|
|
|
20,242
|
|
|
19,305
|
Other
expense
|
|
(290,655)
|
|
|
(26,992)
|
|
|
(144,069)
|
Loss from equity
method investment
|
|
(127,965)
|
|
|
(17,524)
|
|
|
-
|
Total other
expenses
|
|
(1,666,931)
|
|
|
(175,493)
|
|
|
(207,296)
|
Income (loss)
before income taxes provision (benefit)
|
|
(8,625,427)
|
|
|
(14,219,265)
|
|
|
60,009
|
Income tax provision
(benefit)
|
|
-
|
|
|
-
|
|
|
(55,102)
|
Net income
(loss)
|
|
(8,625,427)
|
|
|
(14,219,265)
|
|
|
115,111
|
Less: Net loss
attributable to noncontrolling interest
|
|
(8)
|
|
|
(40)
|
|
|
-
|
Net income (loss)
attributable to TDH Holdings, Inc.
|
$
|
(8,625,419)
|
|
$
|
(14,219,225)
|
|
$
|
115,111
|
Comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(8,625,427
|
|
$
|
(14,219,265)
|
|
$
|
115,111
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
(100,954)
|
|
|
(65,123)
|
|
|
410,642
|
Total
comprehensive income (loss)
|
$
|
(8,726,381)
|
|
$
|
(14,284,388)
|
|
$
|
525,753
|
Less: Comprehensive
loss attributable to noncontrolling interest
|
|
(8)
|
|
|
(347)
|
|
|
-
|
Comprehensive
income (loss) attributable to TDH Holdings, Inc.
|
$
|
(8,726,373)
|
|
$
|
(14,284,041)
|
|
$
|
525,753
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per common share attributable to TDH Holdings Inc.
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.41)
|
|
$
|
(1.49)
|
|
$
|
0.01
|
Diluted
|
$
|
(0.41)
|
|
$
|
(1.49)
|
|
$
|
0.01
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
21,022,598
|
|
|
9,558,493
|
|
|
8,303,853
|
Diluted
|
|
21,022,598
|
|
|
9,558,493
|
|
|
8,303,853
|
TDH HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
For The Years
Ended December 31,
|
|
2019
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
|
|
Net income
(loss)
|
$
|
(8,625,427)
|
|
$
|
(14,219,265)
|
|
$
|
115,111
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
571,528
|
|
|
395,355
|
|
|
364,170
|
Loss from equity
method investment
|
|
127,965
|
|
|
17,524
|
|
|
-
|
Loss from disposal of
subsidiaries
|
|
5,018
|
|
|
-
|
|
|
-
|
Impairment of
goodwill
|
|
-
|
|
|
1,599,591
|
|
|
-
|
Impairment of
long-lived assets other than goodwill
|
|
813,344
|
|
|
-
|
|
|
-
|
Inventory
write-down
|
|
518,119
|
|
|
1,668,508
|
|
|
-
|
Bad debt
provision
|
|
659,569
|
|
|
-
|
|
|
18,201
|
Deferred income tax
liability
|
|
(3,861)
|
|
|
(591)
|
|
|
(8,581)
|
Loss on disposal of
property, plant and equipment
|
|
308,003
|
|
|
-
|
|
|
1,783
|
Non-cash lease
expense
|
|
89,176
|
|
|
-
|
|
|
-
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
329,042
|
|
|
1,302,573
|
|
|
(971,831)
|
Accounts receivable -
related party, net
|
|
306,301
|
|
|
(778,516)
|
|
|
(10,817)
|
Inventories,
net
|
|
2,009,862
|
|
|
4,203,927
|
|
|
(2,658,359)
|
Operating lease
liabilities - related parties
|
|
16,404
|
|
|
-
|
|
|
-
|
Due from related
parties, net
|
|
(2,206)
|
|
|
-
|
|
|
-
|
Due to related
parties
|
|
14,387
|
|
|
18,142
|
|
|
5,920
|
Advances to
suppliers
|
|
36,322
|
|
|
569,723
|
|
|
121,360
|
Prepayments and other
current assets
|
|
516,018
|
|
|
(291,336)
|
|
|
18,197
|
Accounts
payable
|
|
(2,775,356)
|
|
|
1,870,157
|
|
|
1,174,363
|
Accounts payable -
related parties
|
|
(6,703)
|
|
|
19,848
|
|
|
32,440
|
Interest
payable
|
|
260,417
|
|
|
119,712
|
|
|
-
|
Notes
payable
|
|
(1,046,257)
|
|
|
1,204,910
|
|
|
(127,275)
|
Taxes
payable
|
|
13,797
|
|
|
32,733
|
|
|
(115,219)
|
Advances
from customers
|
|
(42,923)
|
|
|
(60,254)
|
|
|
(601,855)
|
Advances
from customer - related party
|
|
-
|
|
|
(7,397)
|
|
|
7,241
|
Other current
liabilities
|
|
280,843
|
|
|
160,914
|
|
|
(39,785)
|
Net cash used in
operating activities
|
|
(5,626,618)
|
|
|
(2,173,742)
|
|
|
(2,674,936)
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Payments to acquire
property, plant and equipment
|
|
(121,560)
|
|
|
(5,627,422)
|
|
|
(227,900)
|
Proceeds from
disposal of property, plant and equipment
|
|
233,747
|
|
|
-
|
|
|
2,012
|
Payments to acquire
land use rights
|
|
-
|
|
|
(854,221)
|
|
|
(103,596)
|
Acquisition of
businesses, net of cash acquired
|
|
-
|
|
|
19,888
|
|
|
-
|
Disposal of
subsidiaries
|
|
83
|
|
|
-
|
|
|
-
|
Loans to related
parties
|
|
-
|
|
|
(132,147)
|
|
|
(533,242)
|
Repayments from
related parties
|
|
1,282
|
|
|
235,049
|
|
|
15,443
|
Payments for
long-term investments
|
|
-
|
|
|
(235,605)
|
|
|
-
|
Net cash provided
by (used in) investing activities
|
|
113,552
|
|
|
(6,594,458)
|
|
|
(847,283)
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of common shares
|
|
6,760,000
|
|
|
-
|
|
|
5,542,047
|
Collection of stock
subscription receivable
|
|
-
|
|
|
100,000
|
|
|
827,730
|
Proceeds from related
parties
|
|
-
|
|
|
5,306
|
|
|
1,073,961
|
Repayments to related
parties
|
|
(1,000)
|
|
|
(385,420)
|
|
|
(1,767,391)
|
Proceeds from bank
overdrafts
|
|
78,162
|
|
|
-
|
|
|
-
|
Proceeds from short
term loans
|
|
1,046,275
|
|
|
8,400,090
|
|
|
2,077,219
|
Repayments of short
term loans
|
|
(2,073,177)
|
|
|
(1,508,056)
|
|
|
(2,494,793)
|
Proceeds from short
term loans - related parties
|
|
4,791,403
|
|
|
1,176,690
|
|
|
-
|
Repayments of short
term loans - related party
|
|
(1,080,947)
|
|
|
(60,490)
|
|
|
-
|
Net cash provided
by financing activities
|
|
9,520,716
|
|
|
7,728,120
|
|
|
5,258,773
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
(203,577)
|
|
|
96,808
|
|
|
55,000
|
Net change in
cash, cash equivalents and restricted cash
|
|
3,804,073
|
|
|
(943,272)
|
|
|
1,791,554
|
Cash, cash
equivalents and restricted cash, beginning of the
year
|
|
2,700,505
|
|
|
3,643,777
|
|
|
1,852,223
|
Cash, cash
equivalents and restricted cash, end of the year
|
$
|
6,504,578
|
|
$
|
2,700,505
|
|
$
|
3,643,777
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
|
|
Interest
paid
|
$
|
1,118,338
|
|
$
|
113,389
|
|
$
|
82,234
|
Income taxes
paid
|
$
|
-
|
|
$
|
-
|
|
$
|
59,927
|
|
|
|
|
|
|
|
|
|
Non-cash investing
and financial activities
|
|
|
|
|
|
|
|
|
Accrued interest
added to short term loan – related party
|
|
126,697
|
|
|
-
|
|
|
-
|
Operating expenses
paid by related parties
|
$
|
-
|
|
$
|
157,094
|
|
$
|
85,837
|
Liabilities assumed
in connection with purchase of property, plant and
equipment
|
$
|
51,196
|
|
$
|
38,636
|
|
$
|
133,229
|
Notes payable
reclassified to short term loans
|
|
479,724
|
|
|
-
|
|
|
-
|
Receivables from
related parties settled with payables to related parties
|
$
|
28,694
|
|
$
|
114,707
|
|
$
|
169,906
|
Receivables from
common stock subscription settled with loan payables to a related
party
|
|
4,240,000
|
|
|
-
|
|
|
-
|
Shares issuance in
connection with acquisition of subsidiaries
|
$
|
-
|
|
$
|
1,053,020
|
|
$
|
-
|
Reconciliation of
cash, cash equivalents, and restricted cash to the consolidated
balance sheets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
5,114,175
|
|
$
|
893,020
|
|
$
|
2,346,109
|
Restricted cash,
current
|
$
|
1,390,403
|
|
$
|
1,807,485
|
|
$
|
797,668
|
Restricted cash,
non-current
|
$
|
-
|
|
$
|
-
|
|
$
|
500,000
|
Total cash, cash
equivalents, and restricted cash at end of year
|
$
|
6,504,578
|
|
$
|
2,700,505
|
|
$
|
3,643,777
|
View original
content:http://www.prnewswire.com/news-releases/tdh-holdings-inc-reports-full-year-2019-audited-financial-results-301077159.html
SOURCE TDH Holdings, Inc.