Senmiao Technology Announces Unaudited Financial Results for its Second Fiscal Quarter Ended September 30, 2019

Record Revenues and Profitability for Senmiao Technology's Automobile Transaction and Related Services Business

Published

CHENGDU, China, Nov. 14, 2019 /PRNewswire/ -- Senmiao Technology Limited (NASDAQ: AIHS) ("Senmiao"), a provider of automobile transaction and related services in China, today announced its unaudited financial results for its second fiscal quarter ended September 30, 2019.

Second Quarter of Fiscal 2020 Highlights

  • Total revenues increased by 8,180% year-over-year to $5,921,166 from $71,508
  • Gross profit increased by 1,595% year-over-year to $1,211,982 from $71,508
  • Earnings per share of $0.04 versus loss per share of $0.03 in same period last year

"We have continued to capitalize on our late 2018 acquisition and subsequent development of our automobile transaction and related services business.  Through our business development efforts, we have taken major steps to restructure our business to better diversify and streamline our revenue streams as we wind down our online peer-to-peer lending business, and our efforts have led to another strong quarterly performance," commented Xi Wen, Chairman, Chief Executive Officer and President of Senmiao.  "With our automobile transaction and related services business now accounting for almost all of our revenue, our main focus is to continue to ramp up these operations as the ride-sharing market in our areas of operation expands, particularly in the second and third tier cities in China.  These developments have placed our business in an outstanding position as we posted positive earnings per share this quarter, the first since our listing on the Nasdaq last year. We believe we have laid the foundation to continue our growth as we focus on other complimentary opportunities for expanding our business."

Revenues

Total revenue was $5,921,166 for the quarter ended September 30, 2019, an increase of $5,849,658, or 8,180% as compared with the quarter ended September 30, 2018, primarily due to Senmiao's significant ramp up of its automobile transaction and related services business (the "Auto Business").

Revenue from the Auto Business was $5,885,287, accounting for 99.4% of total revenue. This compares with $2,432,371 in the fourth quarter of the previous fiscal year and $5,012,563 in the first quarter of the current fiscal year, reflecting two consecutive quarters of strong growth in the Auto Business.

Revenue from online lending services decreased by $35,629 during the quarter ended September 30, 2019 as Senmiao formally commenced the winding down of that business in response to the changing regulatory environment in China.  Senmiao will no longer generate revenue from the online lending business. Revenue from online lending services only accounted for 0.6% of total revenue for the quarter ended September 30, 2019, a significant shift from 100% a year ago, as Senmiao proactively restructured operations in order to position itself for future sustainable growth.

Cost of Revenues

Cost of revenues was $4,709,184 for the quarter ended September 30, 2019. Senmiao did not incur cost of revenues during the same period last year as it only provided online lending services which did not incur any cost of revenues.

Gross Profit

Gross profit was $1,211,982 for the quarter ended September 30, 2019 as compared to $71,508 during the same period last year mainly due to the gross profit of $1,176,103 from the Auto Business, partially offset by a decrease of $35,629 from online lending services.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $1,738,335 for the quarter ended September 30, 2019 as compared to $782,451 during the same period last year, an increase of 122%. The increase was mainly attributable to the selling, general and administrative expenses of $887,173 incurred by the Auto Business.

Change in Fair Value of Derivative Liabilities

The change in fair value of derivative liabilities amounted to $1,998,202, derived from change of the fair values between September 30, 2019 and June 30, 2019 of the warrants issued in Senmiao's registered direct offering which closed on June 21, 2019.

Net Income

Net income for the quarter ended September 30, 2019 was $1,141,359 as compared to a net loss of $790,005 during the same period last year.

Senmiao achieved a net income of $141,365 from its Auto Business, a net loss of $729,345 from its online lending services for the quarter ended September 30, 2019, and a gain of $1,998,202 from the change in fair value of derivative liabilities.

Financial Position

As of September 30, 2019, Senmiao had cash and cash equivalents of $2,538,667 as compared to $5,020,510 as of March 31, 2019.

Recent Developments

On October 17, 2019, the Board of Directors of Senmiao approved a plan submitted by management to wind down and discontinue Senmiao's online lending services.

In accordance with this plan, Senmiao has ceased facilitation of loan transactions on its online lending platform and began to assume all the outstanding loans from lenders on the platform. The aggregate balance of the loans Senmiao expects to assume is approximately $5.6 million. Senmiao expects to use cash generated from its Auto Business and payments collected from borrowers to fully repay all platform lenders by December 31, 2020.  As part of the plan, Senmiao expects to continue to employ certain employees who currently work on its online lending services, primarily the information technology staff, to provide a website design and development service for companies located in Chengdu City. Senmiao also plans to transfer approximately ten online lending services employees to focus on its Auto Business, and further expects to terminate certain employees of its online lending services by December 31, 2020, but is unable to determine the number at this time.

For additional related information, please see Senmiao's Quarterly Report on Form 10-Q for the period ended September 30, 2019, which is being filed with the U.S. Securities and Exchange Commission today.

About Senmiao

Headquartered in Chengdu, Sichuan Province, Senmiao provides automobile transaction and related services including sales of automobiles, facilitation and services for automobile purchase and financing, management, guarantee and other automobile transaction services aimed principally at the growing ride-sharing market in Senmiao's areas of operation in China.  Until October 2019, Senmiao also operated an online lending platform that connects Chinese investors with individual and small-to-medium-sized enterprise borrowers. For more information about Senmiao, please visit: http://www.senmiaotech.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the development and winding down, respectively of Senmiao's Auto Business and online lending services, the Chinese ride-sharing and automobile financial leasing markets, and Senmiao's plans, objectives, goals, strategies, and performance, as well as the assumptions such statements and other statements that are not statements of historical facts. When Senmiao 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. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from Senmiao's expectations, including, but not limited to, risks and uncertainties relating to the following:  the risk that the anticipated growth of Senmiao's Auto Business may not be realized; the risks associated with the winding down of Senmiao's online lending business; Senmiao's future business development; product and service demand and acceptance; changes in technology; economic conditions; reputation and brand; the impact of competition and pricing; the impact of government regulations; fluctuations in general economic and business conditions in China and other risks expressed in reports filed by Senmiao with the U.S. Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance on any forward-looking statements. Senmiao's filings with the U.S. Securities and Exchange Commission are available for review at www.sec.gov. Senmiao undertakes no obligation to publicly revise any forward-looking statements to reflect changes in events or circumstances.

For more information, please contact:

At the Company:Yiye ZhouEmail: edom333@ihongsen.comPhone: +86 28 6155 4399

Investor Relations:Linda BergkampChristensenEmail: lbergkamp@ChristensenIR.com Phone: +1 480 614 3004

 

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollar, except for the number of shares)
September 30, March 31,
2019 2019
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 2,538,667 $ 5,020,510
Accounts receivable, net 1,472,094 326,181
Inventories 2,195,382 1,508,244
Finance lease receivables, net, current portion 371,264 10,254
Prepayments, receivables and other assets, net 4,744,183 3,793,468
Escrow receivable due within one year - 600,000
Due from related parties 136,590 140,498
Total Current Assets 11,458,180 11,399,155
Property and equipment, net 425,257 125,885
Other Assets
Right-of-use assets 842,413 -
Intangible assets, net 33,409 296,091
Prepayment for intangible assets 889,891 470,706
Accounts receivable, net 1,262,912 -
Finance lease receivables, net 733,269 22,298
Total Other Assets 3,761,894 789,095
Total Assets $ 15,645,331 $ 12,314,135
LIABILITIES AND EQUITY
Current Liabilities
Borrowings from financial institutions $ 205,775 $ 219,157
Borrowings from third parties - 476,765
Accounts payable 162,142 -
Advance from customers 100,533 38,996
Income tax payable 105,254 21,905
Accrued expenses and other liabilities 1,727,219 1,500,803
Due to stockholders 125,428 1,080,047
Due to related parties and affiliates 668,697 415,931
Lease liabilities 323,564 -
Derivative liabilities 193,569 -
Total Current Liabilities 3,612,181 3,753,604
Other Liabilities
Borrowings from financial institutions, noncurrent 72,724 177,789
Lease liabilities, non current 448,327 -
Total Other Liabilities 521,051 177,789
Total liabilities 4,133,232 3,931,393
Commitments and Contingencies
Stockholders' Equity
Common stock (par value $0.0001 per share, 100,000,000 shares authorized;  28,691,356 and 25,945,255 shares issued and outstanding at September 30, 2019 and March 31, 2019, respectively) 2,869 2,595
Additional paid-in capital 26,786,683 23,833,112
Accumulated deficit -14,519,644 -15,031,538
Accumulated other comprehensive loss -763,605 -428,771
Total Stockholders' Equity 11,506,303 8,375,398
Noncontrolling interests 5,796 7,344
Total Equity 11,512,099 8,382,742
Total Liabilities and Equity $ 15,645,331 $ 12,314,135

 

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Expressed in U.S. dollar, except for the number of shares) (Expressed in U.S. dollar, except for the number of shares)
September 30, March 31, For the Three Months Ended For the Six Months Ended
2019 2019 September 30, September 30,
(Unaudited) 2019 2018 2019 2018
ASSETS (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Current Assets Revenues $ 5,921,166 $ 71,508 $ 11,015,606 $ 196,534
Cash and cash equivalents $ 2,538,667 $ 5,020,510 Cost of revenues -4,709,184 - -8,731,496 -
Accounts receivable, net 1,472,094 326,181 Gross profit 1,211,982 71,508 2,284,110 196,534
Inventories 2,195,382 1,508,244
Finance lease receivables, net, current portion 371,264 10,254 Operating expenses
Prepayments, receivables and other assets, net 4,744,183 3,793,468 Selling, general and administrative expenses -1,738,335 -782,451 -3,191,407 -1,754,720
Escrow receivable due within one year - 600,000 Amortization of intangible assets -11,414 -86,791 -26,568 -173,088
Due from related parties 136,590 140,498 Impairments of intangible assets  and goodwill -266,534 - -266,534 -
Total Current Assets 11,458,180 11,399,155 Total operating expenses -2,016,283 -869,242 -3,484,509 -1,927,808
Property and equipment, net 425,257 125,885 Loss from operations -804,301 -797,734 -1,200,399 -1,731,274
Other Assets Other income (expense)
Right-of-use assets 842,413 - Other (expense) income, net -22,779 7,729 9,462 10,905
Intangible assets, net 33,409 296,091 Interest expense -25,306 - -62,345 -
Prepayment for intangible assets 889,891 470,706 Change in fair value of derivative liabilities 1,998,202 - 1,994,806 -
Accounts receivable, net 1,262,912 - Total other income, net 1,950,117 7,729 1,941,923 10,905
Finance lease receivables, net 733,269 22,298
Total Other Assets 3,761,894 789,095 Income (loss) before income taxes 1,145,816 -790,005 741,524 -1,720,369
Total Assets $ 15,645,331 $ 12,314,135 Income tax expenses -4,457 - -105,598 -
LIABILITIES AND EQUITY Net income (loss) before non-controlling interests 1,141,359 -790,005 635,926 -1,720,369
Current Liabilities
Borrowings from financial institutions $ 205,775 $ 219,157 Less: Net income attributable to noncontrolling interests -51,105 - -124,033 -
Borrowings from third parties - 476,765
Accounts payable 162,142 - Net income (loss) attributable to stockholders $ 1,090,254 $ -790,005 $ 511,893 $ -1,720,369
Advance from customers 100,533 38,996
Income tax payable 105,254 21,905 Net income (loss) $ 1,141,359 $ -790,005 $ 635,926 $ -1,720,369
Accrued expenses and other liabilities 1,727,219 1,500,803
Due to stockholders 125,428 1,080,047 Other comprehensive loss
Due to related parties and affiliates 668,697 415,931 Foreign currency translation adjustment -374,192 -57,965 -460,415 -106,700
Lease liabilities 323,564 -
Derivative liabilities 193,569 - Comprehensive income (loss) 767,167 -847,970 175,511 -1,827,069
Total Current Liabilities 3,612,181 3,753,604
Less: Total comprehensive income attributable to noncontrolling interests -46,200 - -1,548 -
Other Liabilities
Borrowings from financial institutions, noncurrent 72,724 177,789 Total comprehensive income (loss) attributable to stockholders $ 813,367 $ -847,970 $ 177,059 $ -1,827,069
Lease liabilities, non current 448,327 -
Total Other Liabilities 521,051 177,789 Weighted average number of common stock
Basic 28,237,413 25,879,400 27,185,205 25,879,400
Total liabilities 4,133,232 3,931,393 Diluted 28,237,430 25,879,400 27,185,212 25,879,400
Commitments and Contingencies Earnings (loss) per share
Basic $ 0.04 $ -0.03 $ 0.02 $ -0.07
Stockholders' Equity Diluted $ 0.04 $ -0.03 $ 0.02 $ -0.07
Common stock (par value $0.0001 per share, 100,000,000 shares authorized;  28,691,356 and 25,945,255 shares issued and outstanding at September 30, 2019 and March 31, 2019, respectively) 2,869 2,595
Additional paid-in capital 26,786,683 23,833,112
Accumulated deficit -14,519,644 -15,031,538
Accumulated other comprehensive loss -763,605 -428,771
Total Stockholders' Equity 11,506,303 8,375,398
Noncontrolling interests 5,796 7,344
Total Equity 11,512,099 8,382,742
Total Liabilities and Equity $ 15,645,331 $ 12,314,135

 

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollar, except for the number of shares) (Expressed in U.S. dollar, except for the number of shares) (Expressed in U.S. dollar, except for the number of shares)
September 30, March 31, For the Three Months Ended For the Six Months Ended For the Six Months Ended
2019 2019 September 30, September 30, September 30,
(Unaudited) 2019 2018 2019 2018 2019 2018
ASSETS (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Current Assets Revenues $ 5,921,166 $ 71,508 $ 11,015,606 $ 196,534 Cash Flows from Operating Activities:
Cash and cash equivalents $ 2,538,667 $ 5,020,510 Cost of revenues -4,709,184 - -8,731,496 - Net income (loss) $ 635,926 $ -1,720,369
Accounts receivable, net 1,472,094 326,181 Gross profit 1,211,982 71,508 2,284,110 196,534 Adjustments to reconcile net loss to net cash used in operating activities:
Inventories 2,195,382 1,508,244 Depreciation and amortization of property and equipment 56,016 4,897
Finance lease receivables, net, current portion 371,264 10,254 Operating expenses Amortization of right-of-use assets 90,800 -
Prepayments, receivables and other assets, net 4,744,183 3,793,468 Selling, general and administrative expenses -1,738,335 -782,451 -3,191,407 -1,754,720 Amortization of intangible assets 26,568 173,088
Escrow receivable due within one year - 600,000 Amortization of intangible assets -11,414 -86,791 -26,568 -173,088 Provision for doubtful accounts 166,558 -
Due from related parties 136,590 140,498 Impairments of intangible assets  and goodwill -266,534 - -266,534 - Impairment loss of intangible assets 266,534 -
Total Current Assets 11,458,180 11,399,155 Total operating expenses -2,016,283 -869,242 -3,484,509 -1,927,808 Loss on disposal of an equipment 4,621 -
Change in fair value of derivative liabilities -1,994,806 -
Property and equipment, net 425,257 125,885 Loss from operations -804,301 -797,734 -1,200,399 -1,731,274 Change in operating assets and liabilities
Accounts receivable -2,606,829 -40,229
Other Assets Other income (expense) Inventories -804,853 -
Right-of-use assets 842,413 - Other (expense) income, net -22,779 7,729 9,462 10,905 Prepayments, receivables and other assets -1,311,125 31,418
Intangible assets, net 33,409 296,091 Interest expense -25,306 - -62,345 - Finance lease receivables -1,109,277 -
Prepayment for intangible assets 889,891 470,706 Change in fair value of derivative liabilities 1,998,202 - 1,994,806 - Accounts payable 167,472 -
Accounts receivable, net 1,262,912 - Total other income, net 1,950,117 7,729 1,941,923 10,905 Advances from customers 66,019 -
Finance lease receivables, net 733,269 22,298 Income tax payable 87,469 -
Total Other Assets 3,761,894 789,095 Income (loss) before income taxes 1,145,816 -790,005 741,524 -1,720,369 Accrued expenses and other liabilities 319,448 -30,524
Lease liabilities -124,945 -
Total Assets $ 15,645,331 $ 12,314,135 Income tax expenses -4,457 - -105,598 - Net Cash Used in Operating Activities -6,064,404 -1,581,719
LIABILITIES AND EQUITY Net income (loss) before non-controlling interests 1,141,359 -790,005 635,926 -1,720,369 Cash Flows from Investing Activities:
Current Liabilities Purchases of property and equipment -384,695 -27,271
Borrowings from financial institutions $ 205,775 $ 219,157 Less: Net income attributable to noncontrolling interests -51,105 - -124,033 - Purchase of intangible assets - -42,472
Borrowings from third parties - 476,765 Prepayment of intangible assets -470,000 -
Accounts payable 162,142 - Net income (loss) attributable to stockholders $ 1,090,254 $ -790,005 $ 511,893 $ -1,720,369 Net Cash Used in Investing Activities -854,695 -69,743
Advance from customers 100,533 38,996
Income tax payable 105,254 21,905 Net income (loss) $ 1,141,359 $ -790,005 $ 635,926 $ -1,720,369 Cash Flows from Financing Activities:
Accrued expenses and other liabilities 1,727,219 1,500,803 Net proceeds from issuance of common stock in registered direct offering 5,142,124 -
Due to stockholders 125,428 1,080,047 Other comprehensive loss Net proceeds from issuance of common stock upon warrants exercised 96 -
Due to related parties and affiliates 668,697 415,931 Foreign currency translation adjustment -374,192 -57,965 -460,415 -106,700 Proceeds borrowed from stockholders - 1,574,617
Lease liabilities 323,564 - Repayments to stockholders -870,249 -1,500,000
Derivative liabilities 193,569 - Comprehensive income (loss) 767,167 -847,970 175,511 -1,827,069 Repayments to third parties -462,370 -
Total Current Liabilities 3,612,181 3,753,604 Borrowings from related parties and affiliates 1,177,651 -
Less: Total comprehensive income attributable to noncontrolling interests -46,200 - -1,548 - Repayments to related parties and affiliates -838,949 -
Other Liabilities Repayments of current borrowings from financial institutions -97,306 -
Borrowings from financial institutions, noncurrent 72,724 177,789 Total comprehensive income (loss) attributable to stockholders $ 813,367 $ -847,970 $ 177,059 $ -1,827,069 Release of escrow receivable 600,000 600,000
Lease liabilities, non current 448,327 - Net Cash Provided by Financing Activities 4,650,997 674,617
Total Other Liabilities 521,051 177,789 Weighted average number of common stock
Basic 28,237,413 25,879,400 27,185,205 25,879,400 Effect of exchange rate changes on cash and cash equivalents -213,741 -98,647
Total liabilities 4,133,232 3,931,393 Diluted 28,237,430 25,879,400 27,185,212 25,879,400
Net decrease in cash and cash equivalents -2,481,843 -1,075,492
Commitments and Contingencies Earnings (loss) per share Cash and cash equivalents, beginning of period 5,020,510 11,141,566
Basic $ 0.04 $ -0.03 $ 0.02 $ -0.07 Cash and cash equivalents, end of period $ 2,538,667 $ 10,066,074
Stockholders' Equity Diluted $ 0.04 $ -0.03 $ 0.02 $ -0.07
Common stock (par value $0.0001 per share, 100,000,000 shares authorized;  28,691,356 and 25,945,255 shares issued and outstanding at September 30, 2019 and March 31, 2019, respectively) 2,869 2,595 Supplemental Cash Flow Information
Additional paid-in capital 26,786,683 23,833,112 Cash paid for interest expense $ 62,345 $ -
Accumulated deficit -14,519,644 -15,031,538 Cash paid for income tax $ - $ -
Accumulated other comprehensive loss -763,605 -428,771 Non-cash Transaction in Investing and Financing Activities
Total Stockholders' Equity 11,506,303 8,375,398 IPO expenses paid by the Company's stockholders $ - $ 70,687
Right-of-use assets obtained in exchange of operating lease liabilities $ 960,908 $ -
Noncontrolling interests 5,796 7,344 Intangible assets received from prepayment $ 40,457 $ -
Allocation of fair value of derivative liabilities for issuance of common stock proceeds $ 3,150,006 $ -
Total Equity 11,512,099 8,382,742 Allocation of fair value of derivative liabilities to additional paid in capital upon warrants exercised $ 961,631 $ -
Total Liabilities and Equity $ 15,645,331 $ 12,314,135

 

 

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