UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of October 2023

 

Commission file number: 001-38206

 

TDH HOLDINGS, INC.

(Registrant’s name)

 

cc/o Qingdao Tiandihui Pet Foodstuff Co., Ltd

2521 Tiejueshan Road, Huangdao District, Qingdao, Shandong Province

People’s Republic of China

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F Form 40-F

 

 

 

 

 

 

Explanatory Note:

 

On October 31, 2023, TDH Holdings, Inc. (the “Registrant”) issued a press release announcing its financial results for the first half year 2023. A copy of the press release is attached hereto as Exhibit 99.1

 

EXHIBIT INDEX

 

Number   Description of Exhibit
99.1   Press Release dated October 31, 2023 announcing financial results for the first half year 2023.

 

1

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  TDH HOLDINGS, INC.
   
  By: /s/ Dandan Liu
    Dandan Liu
    Chair and Chief Executive Officer
     
Dated: November 1, 2023    

 

 

2

 

 

Exhibit 99.1

 

TDH Holdings, Inc. Reports First Half 2023 Financial Results

 

QINGDAO, China, October 31, 2023 /PRNewswire/ -- TDH Holdings, Inc. (NASDAQ: PETZ) (“TDH” or the “Company”), a PRC-based company that is an operator of a restaurant in the U.S., announced today its financial results for the six months ended June 30, 2023.

 

First Half 2023 Unaudited Financial Highlights:

 

    For the Six Months Ended June 30  
($ millions, except per share data)   2023     2022     %
Change
 
Revenues from continuing operations   $ 1.55     $ 1.45       6.97 %
Gross profit   $ 0.48     $ 0.40       20.96 %
Gross profit margin     31.14 %     27.54 %     3.60 pp *
Loss from operations   $ (0.89 )   $ (2.17 )     58.86 %
Operating loss margin     -57.60 %     -149.76 %     92.16 pp *
Net income (loss) attributable to common stockholders   $ 0.06     $ (0.9 )     107.21 %
Earnings (loss) per share - basic and diluted   $ 0.01     $ (0.14 )     104.37 %

 

* pp: percentage points

 

Revenues increased by 6.97% to $1.55 million for the first half of 2023. We discontinued our petfood manufacturing segment during the first quarter of 2023 and substantially all of our revenue was generated from our restaurant business during the first half of 2023. Our decision to discontinue our petfood business was driven largely by the following factors: the increase in cost of raw materials required for production; accepting less orders in an attempt to avoid unprofitable orders and customers; decreased demand for sales of petfood; its historical performance and expected business forecasts in the absence of further capital investments and opportunity costs; lawsuits and the closing of our manufacturing facilities, and them being subject to bankruptcy proceedings. We believe the discontinuation of our petfood manufacturing business will provide us with the opportunity to redirect our focus and resources towards expanding and improving our restaurant segment.

 

Gross profit was $ 0.48 million for the first half of 2023, compared to gross profit of $0.4 million for the same period of the prior year.

 

Operating loss was $0.89 million for the first half of 2023, compared to operating loss of $2.17 million for the same period of the prior year. The decrease in operating loss was primarily due to the Company’s reduced operating expense in the six months ended June 30, 2023, in connection with the discontinued operation of our petfood business and also as a result of our cost control efforts.

 

Net income was $0.06 million, or earnings per share of $0.01, for the first half of 2023, compared to net loss of $0.09 million, or loss per share of $0.14, for the same period of the prior year.

 

 

 

First Half 2023 Financial Results

 

Revenues

 

For the first half of 2023, total revenues increased by $0.1 million, or 6.96%, to $1.55 million from $1.45 million as compared with the same period of the prior year. For the six months ended June 30, 2023, revenue from food and beverage sales in our restaurant business in the United States increased, however, we only generated a limited amount of revenue from pet food sales in the first half of 2023, which was mainly due to the fact that we discontinued our petfood manufacturing segment during the first quarter of 2023. Therefore, our sales increase for the six months ended June 30, 2023 compared to the same period in 2022 was primarily due to an increase in restaurant revenue, as discussed in detail below:

 

   For the Six Months Ended June 30, 
   2023   2022   Y/Y Change 
   Revenues
($’000)
   %
of Total
   Revenues
($’000)
   %
of Total
   Amount ($’000)   % 
Domestic  $1    0.06%  $14    0.96%  $(13)   -92.86%
E-commerce   -    -    1    0.07%   (1)   -100.00%
Restaurant revenue   1,552    99.04%   1,438    99.04%   114    7.93%
less: sales tax and additional surcharge   -    -    1    0.07%   (1)   -100.00%
Total  $1,553    100.00%  $1,452    100.00%  $101    6.96%

 

Domestic sales for pet food decreased by $0.01 million, or 92.86%, to $0 million for the first half of 2023 from $0.01 million for the same period of the prior year. Sales from the restaurant revenue increased by $0.1 million, or 7.93%, to $1.55 million for the first half of 2023 from $1.44 million for the same period of the prior year.

 

Cost of revenues

 

Our cost of revenue mainly includes the cost of our food, beverage and packaging costs, and labor costs. Our cost of revenues, increased by $0.02 million or 1.65%, to $1.07 million for the six months ended June 30, 2023, as compared to $1.05 million for the six months ended June 30, 2022. This increase in cost of revenues was in line with the 6.97% increase in our total net revenue for the six months ended June 30, 2023, primarily driven by increased restaurant revenue. As a percentage of revenues, cost of revenues was 68.86% for the first half of 2023, compared to 72.46% for the same period of the prior year.

  

Gross profit and gross profit margin

 

Gross profit was $0.48 million for the first half of 2023, compared to gross profit of $0.40 million for the same period of the prior year. The increase in gross profit was due to higher profit from our restaurant business.

 

Operating expense

 

Operating expense consists of selling expense and general and administrative expense.

 

Selling expense was $43,383 in the first half 2023, remained at a relatively stable level as compared to $45,064 in the same period of the prior year.

 

General and administrative expense decreased by $1.19 million, or 47.22%, to $1.33 million for the first half of 2023 from $2.53 million for the same period of the prior year. The main reason for the decrease was due to decreased legal costs and consulting service fees in the first half of 2023 when we discontinued the petfood business segment in the first quarter of 2023.

 

As a result, total operating expenses decreased by $1.20 million, or 46.46%, to $1.38 million for the first half of 2023 from $2.57 million for the same period of the prior year.

 

Operating loss

 

Loss from operations was $0.90 million for the first half of 2023, compared to $2.17 million for the same period of the prior year. The decrease in continuing operating loss was mainly due to decreased operating expenses in the first half of 2023.

 

2

 

 

Other income, net

 

Total net other income decreased by approximately $0.57 million or 38.67%, from $1.48 million in the six months ended June 30, 2022, to $0.91 million in the six months ended June 30, 2023, which is primarily attributable to an decrease in investment income. We invested our available cash on hand in equity securities of certain publicly listed companies through various open market transactions. Our investments in marketable securities are accounted for pursuant to ASC 321 and reported at their readily determinable fair value as quoted by market exchanges in the consolidated balance sheets with change in fair value recognized in earnings. During the first half of 2023, the investments generated a total of $0.92 million net returns as compared to $1.08 million for the same period of 2022.

 

Net income (loss) and earnings (loss) per share

 

As a result of the above, net income was $0.06 million, or earnings per share of $0.01, for the first half of 2023, compared to net loss of $0.9 million, or loss per share of $0.14, for the same period of the prior year.

  

Financial Conditions

 

As of June 30, 2023, the Company had cash, cash equivalents and restricted cash of $19.19 million (including cash and cash equivalents of $17.98 million from continuing operations and restricted cash of $1.21 million from discontinued operations), compared to $23.15 million (including cash and cash equivalent of $21.86 million from continuing operations and restricted cash of $1.29 million from discontinued operations) at December 31, 2022. Accounts receivable and inventories were $0.03 million and $0 million, respectively, as of June 30, 2023, compared to $0.03 million and $0.01 million, respectively, at December 31, 2022. We also had short-term investment of approximately $12.99 million and $9.92 million as of June 30, 2023, and December 31, 2022 respectively, which are highly liquid and can be covered into cash and used in our operations if needed.

 

Net cash used in operating activities was $2.35 million for the first half of 2023 (including cash flows of $2.44 million used in operating activities from our continuing operations and cash flows of $0.09 million provided by operating activities from discontinued operations), compared to net cash used in operating activities of $0.87 million for the same period of the prior year (including cash flows of $0.58 million used in operating activities from our continuing operations and cash flows of $0.28 million used in operating activities from discontinued operations).

 

Net cash used in investing activities was $2.15 million for the first half of 2023(including cash flows of $2.15 million used in investing activities from our continuing operations and cash flows of $0 million used in investing activities from discontinued operations), compared to net cash used in investing activities of $6.06 million for the same period of the prior year (including cash flows of $6.06 million used in investing activities from our continuing operations and cash flows of $0 million used in investing activities from discontinued operations).

 

There was no cash provided by or used in our financing activities during the six months ended June 30, 2023, and 2022, respectively.

  

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), a PRC-based company that is an operator of a restaurant in the United States. More information about the Company can be found at www.tiandihui.com.

 

3

 

 

Safe Harbor Statement

 

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may”, “will”, “intend”, “should”, “believe”, “expect”, “anticipate”, “project”, “estimate” or similar expressions that do not relate solely to historical matters, it is making 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, and its ability to resume its operations at previous levels, and its ability to successfully resolve various legal proceedings in which it is involved, are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s goals and strategies; the Company’s future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the restaurant industry, reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the United States and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. 

 

For more information, please contact:

 

Feng Zhang, CFO

Email: zhangfeng@tdhpet.com

Phone: +86 183-1102-1983

 

4

 

 

Index to Unaudited Condensed Consolidated Interim Financial Statements

 

    Page
     
Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022   6
     
Consolidated Statements of Operations and Comprehensive Loss For The Six Months Ended June 30, 2023 and 2022 (Unaudited)   7
     
Consolidated Statements of Cash Flows For The Six Months Ended June 30, 2023 and 2022 (Unaudited)   8

 

5

 

 

TDH HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

   June 30,   December 31, 
   2023   2022 
   (Unaudited)     
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents  $17,977,195   $21,857,125 
Short-term investments   12,991,236    9,922,366 
Accounts receivable, net   34,655    29,318 
Advances to suppliers, net   7,946    2,789 
Inventories, net   -    987 
Prepayments and other current assets, net   170,635    127,834 
Current Assets held for sale associated with discontinued operation of Tiandihui   1,811,028    1,841,335 
Total current assets   32,992,695    33,781,754 
NON-CURRENT ASSETS:          
Property, plant and equipment, net   692,223    698,044 
Intangible assets, net   454,984    481,840 
Operating lease right-of-use assets   678,320    783,658 
Non-current assets held for sale associated with discontinued operation of Tiandihui   740,335    768,101 
Total non-current assets   2,565,862    2,731,643 
Total assets  $35,558,557   $36,513,397 
           
LIABILITIES AND SHAREHOLDERS’S EQUITY          
CURRENT LIABILITIES:          
Accounts payable  $478,401   $491,850 
Accounts payable - related parties   6,216    1,033 
Advances from customers   1,389    11,024 
Bank overdrafts   64,058    74,425 
Short-term loans - related parties   229,337    266,451 
Taxes payable   8,754    11,923 
Due to related parties   80,813    55,747 
Operating lease liabilities, current   216,167    212,814 
Other current liabilities   243,018    1,212,420 
Current Liabilities held for sale associated with discontinued operation of Tiandihui   11,368,723    12,337,657 
Total current liabilities   12,696,876    14,675,344 
NON-CURRENT LIABILITIES:          
Operating lease liabilities, non-current   574,099    683,113 
Non-current liabilities held for sale associated with discontinued operation of Tiandihui   999    1,037 
Total liabilities   13,271,974    15,359,494 
SHAREHOLDERS’ EQUITY:          
Common stock ($0.02 par value; 50,000,000 shares authorized; 10,323,268 and 10,323,268 shares issued and outstanding at June 30, 2023, and December 31, 2022, respectively)*   206,465    206,465 
Additional paid-in capital   48,089,439    48,089,439 
Statutory reserves   160,014    160,014 
Accumulated deficit   (28,101,327)   (28,165,927)
Accumulated other comprehensive income   1,565,431    428,249 
Total TDH Holdings, Inc. shareholders’ equity   21,920,021    20,718,240 
Non-controlling interest   366,562    435,663 
Total shareholders’ equity   22,286,583    21,153,903 
Total liabilities and shareholders’ equity  $35,558,557   $36,513,397 

 

  * Retrospectively restated to reflect the one-for-twenty reverse split dated on June 14, 2022

 

6

 

 

TDH HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

   For The
Six Months
Ended
June 30,
2023
   For The
Six Months
Ended
June 30,
2022
 
         
Net revenue  $1,552,805   $1,451,655 
Cost of revenue   1,069,296    1,051,919 
Gross profit   483,509    399,736 
Operating expenses:          
Selling expense   43,383    45,064 
General and administrative expense   1,334,580    2,528,742 
Total operating expenses   1,377,963    2,573,806 
Loss from operations   (894,454)   (2,174,070)
Interest expense   (19,443)   (2,555)
Other income   7,850    10,702 
Investment income, net   917,411    1,075,565 
Other expenses   (313)   (15,566)
Gain from operating lease contract modification   -    408,198 
Total other income   905,505    1,476,344 
Loss before income tax provision   11,051    (697,726)
Net income loss continuing operations   11,051    (697,726)
Net loss from discontinued operations of Tiandihui   (15,552)   (610,664)
Net loss   (4,501)   (1,308,390)
Less: Net loss attributable to non-controlling interest   (69,101)   (412,390)
Net Income (Loss) attributable to TDH Holdings, Inc.   64,600    (896,000)
Comprehensive income (loss)          
Net income (loss)  $64,600   $(896,000)
Other comprehensive income          
Foreign currency translation adjustment   1,137,181    1,413,179 
Total comprehensive income  $1,201,781   $517,179 
Less: Comprehensive loss attributable to non-controlling interest   -    - 
Comprehensive income attributable to TDH Holdings, Inc.  $1,201,781   $517,179 
           
Earnings (loss) per common share attributable to TDH Holdings, Inc.          
Basic  $0.01   $(0.14)
Diluted  $0.01   $(0.14)
Weighted average common shares outstanding*          
Basic   10,323,268    6,252,212 
Diluted   10,323,268    6,252,212 

 

  * Retrospectively restated to reflect the one-for-twenty reverse split dated on June 14, 2022

 

7

 

 

TDH HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   For The
Six Months
Ended
   For The
Six Months
Ended
 
   June 30,
2023
   June 30,
2022
 
         
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss)  $64,600   $(896,000)
Less: net loss from discontinued operations   (15,552)   (610,664)
Net income (loss) from continuing operations   80,152    (285,336)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:          
Depreciation and amortization expense   87,175    14,449 
Fair value change of short-term investments   (917,411)   (1,075,565)
Impairment of goodwill   -    355,570 
Inventory write-down   -    (1,558)
Loss (gain) on disposal of property, plant and equipment   491    64,941 
Gain from operating lease contract modification   -    (408,198)
Amortization of operating lease right-of-use assets   105,326    101,765 
Changes in operating assets and liabilities:          
Accounts receivable, net   (5,337)   3,008 
Inventories, net   58    34,774 
Operating lease liabilities   (105,661)   (92,419)
Advances to suppliers, net   (5,157)   10,986 
Accounts payable   33,060    (201,315)
Interest payable   48,606    - 
Taxes payable   (2,354)   (16,307)
Advances from customers   2,214    2,384 
Advances from customer - related party   (14,927)   (20,584)
Other current liabilities   (1,607,131)   323,751 
Net cash used in operating activities from continuing operations   (2,440,909)   (581,067)
Net cash provided by (used in) operating activities from discontinued operations   93,380    (287,509)
           
NET CASH USED IN OPERATING ACTIVITIES  $(2,347,529)  $(868,576)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of short-term investments   (10,393,892)   (22,078,834)
Proceeds from sale of short-term investments   8,242,433    16,020,068 
Net cash used in  investing activities from continuing operations   (2,151,459)   (6,058,766)
Net cash provided by investing activities from discontinued operations   -    - 
           
NET CASH USED IN INVESTING ACTIVITIES  $(2,151,459)  $(6,058,766)
           
Effects on changes in foreign exchange rate   538,762    1,050,948 
Net change in cash, cash equivalents, and restricted cash   (3,960,226)   (5,876,394)
Cash, cash equivalents, and restricted cash - beginning of the period   23,146,176    19,510,975 
Cash, cash equivalents, and restricted cash - end of the period  $19,185,950   $13,634,581 
Less: cash and restricted cash of discontinued operations at the end of the period   1,208,755    1,386,184 
Cash and restricted cash of continued operations at the end of the period   17,977,195    12,248,397 
           
Supplemental cash flow information          
Interest paid  $-   $- 
           
Supplemental non-cash investing and financing activities          
 Cashless exercise of warrants   -    21,887 
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets          
Cash and cash equivalents  $17,977,195   $12,248,397 
Restricted cash  $1,208,755   $1,386,184 
Total cash, cash equivalents, and restricted cash  $19,185,950   $13,634,581 

 

 

8

 

 

 

 

 


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