Senmiao Technology Reports Fiscal 2022 Second Quarter Financial Results
CHENGDU, China, Nov. 16, 2021 /PRNewswire/ -- Senmiao Technology Limited ("Senmiao") (Nasdaq: AIHS), a financing and servicing company focused on the online ride-hailing industry in China as well as an operator of its own online ride-hailing platform, today announced financial results for the fiscal 2022 second quarter ended September 30, 2021.
Fiscal 2022 Second Quarter Financial and Operating Highlights
- Total revenues of $2.9 million, an increase of approximately 105% from $1.4 million in the prior-year period, primarily as a result of increased operating lease revenues from automobile rentals and revenues from online ride-hailing platform services.
- Net loss from continuing operations reduced to $0.1 million, from $2.6 million in the prior-year period.
- During the six months ended September 30, 2021, approximately 12.4 million rides were completed through the platform with gross fares paid by riders totaling $38.0 million.
- In August 2021, Senmiao signed a new contract with Shanghai Lutuan Technology, an affiliate of Meituan (HK: 3690), whereby online ride-hailing requests and orders will be completed on Meituan's platform ("the major platform") utilizing Senmiao's network of cars and drivers for a set monthly fee. Since this new cooperation model commenced in August 2021, over 1.4 million rides have been completed on the major platform with gross fares paid by riders totaling $4.8 million.
Management Commentary
Xi Wen, Chairman, Chief Executive Officer and President of Senmiao, stated, "We were pleased with the results we achieved during the fiscal 2022 second quarter, more than doubling revenue to $2.9 million and significantly narrowing losses compared to the prior-year period. This was primarily driven by increased operating lease revenues from automobile rentals and significantly greater revenue contributions from our online ride-hailing platform services business as a result of our new cooperation agreement with Meituan, which we believe not only presents Senmiao with an attractive opportunity to expand upon this partnership but also much more favorable terms on a go-forward basis. While we expect automobile rentals will continue to make up the majority of our revenues in the near term, we are optimistic that the online ride-hailing platform services business will begin to make more significant contributions in the periods to come."
Mr. Wen continued, "In October, we announced the launch of our online ride-hailing platform in Xuzhou, the largest city in northern Jiangsu Province with a population of approximately 8.6 million. With this launch, Senmiao's platform is now available in 10 cities across China. We look forward to deepening our relationships with our major partners by expanding into additional markets and gaining market share in existing markets. During the three months ended September 30, 2021, our platform facilitated approximately 4 million completed rides generating gross fares of approximately $12.9 million. We realized $0.6 million in revenue from online ride-hailing platform service fees while paying $0.4 million in incentives to Active Drivers, a much lower amount than in previous quarters. During the period, we also announced multiple partnership agreements with different local online ride-hailing companies who have a strong presence and expertise in their respective markets, which we anticipate will enable Senmiao to gain a foothold in these major cities in the coming quarters."
Financial Review
Revenues
Total revenues were $2.9 million for the fiscal second quarter ended September 30, 2021, an increase of 105% from $1.4 million in the prior-year period. The increase was largely due to the $1.2 million increase in operating lease revenues from automobile rentals and $0.6 million in revenue contributions from online ride-hailing platform services, which had not yet launched in the prior-year period. This was partially offset by decreased revenue contributions from automobile sales and facilitation of automobile transactions and financing during the period.
Cost of Revenues
Cost of revenues increased to $2.9 million for the fiscal second quarter ended September 30, 2021, compared to $1.0 million in the prior-year period, primarily due to a $1.7 million increase in cost of automobiles under operating leases and $0.2 million increase in direct expense and technical service fees related to Senmiao's online ride-hailing platform, as a result of the expansion of those two businesses.
Gross Loss
Gross loss was $0.01 million, for the fiscal second quarter ended September 30, 2021, compared to gross profit of $0.4 million in the prior-year period, due to the decreased number of automobile sales and facilitated new automobile purchases. Senmiao has focused on operating leases to mitigate the impact of the return of automobiles by a substantial number of drivers and the intense competition in the online ride-hailing market in Chengdu and Changsha since 2020. The Company achieved gross profit of $0.3 million from online ride-hailing platform services during the fiscal second quarter ended September 30, 2021, which partially offset the gross losses in other lines of business.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased to $3.0 million for the fiscal second quarter ended September 30, 2021, from $2.7 million in the prior-year period. The increase was mainly attributable to a $0.7 million increase in salary and employee benefits as Senmiao's employee headcount increased from 200 to 352 and a $0.3 million increase in offices rental and charges, which were partially offset by a $0.4 million decrease in financial, legal and marketing service fees and a $0.3 million decrease in amortization of intangible assets and rendered automobiles that have not been sub-leased as Senmiao leased more automobiles during this quarter than in the prior-year period.
Net Loss
Net loss from Senmiao's continuing operations for the fiscal second quarter ended September 30, 2021, improved to $0.1 million, from a net loss of $2.6 million in the prior-year period. This was primarily the result of the increased revenues, costs and the gain in change in fair value of derivative liabilities. During the fiscal second quarter ended September 30, 2021, Senmiao had a gain of $3.0 million from change in fair value of derivative liabilities related to warrants issued in Senmiao's historical offerings, from a loss of $0.1 million in the prior-year period.
Earnings (Loss) per Share
Earnings per share for continuing operations for the fiscal second quarter ended September 30, 2021, was approximately $0.01 based on a weighted average number of basic and diluted common stock of 55.4 million, compared to loss per share of approximately $0.06 based on a weighted average number of basic and diluted common stock of 37.8 million in the prior-year period.
Financial Position
As of September 30, 2021, Senmiao had cash and cash equivalents of $1.8 million, compared to $4.4 million as of March 31, 2021.
The Company's business is capital intensive. Subsequent to the quarter-end (on November 11, 2021), Senmiao closed a private placement of $5.0 million with certain institutional investors of its Series A Preferred Stock, which can be initially converted into shares of the Company's common stock at a conversion price of $0.68 per share, subject to adjustment.
Additional information regarding Senmiao's results of operations for the quarter ended September 30, 2021, can be found in the Form 10-Q that has been filed with the U.S. Securities and Exchange Commission on November 15, 2021.
About Senmiao Technology Limited
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, operating lease, guarantee and other automobile transaction services as well as operates its own ride-hailing platform aimed principally at the growing online ride-hailing market in Senmiao's areas of operation in China. For more information about Senmiao, please visit: http://www.senmiaotech.com. Senmiao routinely provides important updates on its website.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements (including statements concerning the development of Senmiao's automobile transaction, financing, rental and related services and online ride-hailing platform, the Chinese ride-hailing and automobile financial leasing markets, Senmiao's plans, objectives, goals, strategies, and performance, and the impact of COVID-19 on Senmiao's business), as well as the assumptions such statements and other statements that are not statements of historical facts are subject to significant risks, uncertainties and assumptions, including those detailed from time to time in Senmiao's filings with the SEC, and represent Senmiao's views only as of the date they are made and should not be relied upon as representing Senmiao's views as of any subsequent date. 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 Zhou | |
Email: [email protected] | |
Phone: +86 28 6155 4399 | |
Investor Relations: | |
The Equity Group Inc. | In China |
Carolyne Sohn, Vice President | Lucy Ma, Associate |
+1 415-568-2255 | +86 10 5661 7012 |
© 2021 Senmiao Technology Ltd. All rights reserved.
SENMIAO TECHNOLOGY LIMITED | ||||||
September 30, 2021 | March 31, 2021 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 1,766,104 | $ | 4,448,075 | ||
Accounts receivable, net, current portion | 773,264 | 1,437,195 | ||||
Inventories | 216,490 | 127,933 | ||||
Finance lease receivables, net, current portion | 458,853 | 541,605 | ||||
Prepayments, other receivables and other assets, net | 3,947,284 | 3,905,278 | ||||
Due from related parties | 44,060 | 39,572 | ||||
Current assets - discontinued operations | 39,007 | 393,348 | ||||
Total current assets | 7,245,062 | 10,893,006 | ||||
Property and equipment, net | ||||||
Property and equipment, net | 5,358,726 | 3,700,147 | ||||
Property and equipment, net - discontinued operations | — | 5,592 | ||||
Total property and equipment, net | 5,358,726 | 3,705,739 | ||||
Other assets | ||||||
Operating lease right-of-use assets, net | 410,698 | 499,221 | ||||
Operating lease right-of-use assets, net, related parties | 633,326 | 580,367 | ||||
Financing lease right-of-use assets, net | 2,923,679 | 4,778,772 | ||||
Intangible assets, net | 898,208 | 968,131 | ||||
Goodwill | — | 135,388 | ||||
Accounts receivable, net, noncurrent | 38,497 | 269,183 | ||||
Finance lease receivables, net, noncurrent | 194,167 | 473,472 | ||||
Total other assets | 5,098,575 | 7,704,534 | ||||
Total assets | $ | 17,702,363 | $ | 22,303,279 | ||
LIABILITIES AND EQUITY (DEFICIENCY) | ||||||
Current liabilities | ||||||
Borrowings from financial institutions | $ | 591,712 | $ | 310,662 | ||
Accounts payable | 178,057 | 44,769 | ||||
Advances from customers | 233,045 | 155,586 | ||||
Income tax payable | 17,855 | 17,408 | ||||
Accrued expenses and other liabilities | 6,555,693 | 6,655,592 | ||||
Due to related parties and affiliates | 1,297,595 | 352,827 | ||||
Operating lease liabilities | 71,653 | 209,644 | ||||
Operating lease liabilities - related parties | 404,997 | 243,726 | ||||
Financing lease liabilities | 4,998,400 | 5,172,943 | ||||
Derivative liabilities | 3,147,206 | 1,278,926 | ||||
Current liabilities - discontinued operations | 644,535 | 2,336,861 | ||||
Total current liabilities | 18,140,748 | 16,778,944 | ||||
SENMIAO TECHNOLOGY LIMITED | ||||||
September 30, 2021 | March 31, 2021 | |||||
(Unaudited) | ||||||
Other liabilities | ||||||
Borrowings from financial institutions, noncurrent | 30,482 | 44,962 | ||||
Operating lease liabilities, non-current | 273,264 | 263,708 | ||||
Operating lease liabilities, non-current - related parties | 355,594 | 341,549 | ||||
Financing lease liabilities, non-current | 1,417,374 | 2,256,553 | ||||
Deferred tax liability | 45,734 | 44,993 | ||||
Total other liabilities | 2,122,448 | 2,951,765 | ||||
Total liabilities | 20,263,196 | 19,730,709 | ||||
Commitments and contingencies | ||||||
Stockholders' equity (deficiency) | ||||||
Common stock (par value $0.0001 per share, 100,000,000 shares authorized; 55,452,127 and 49,780,725 shares issued and outstanding at September 30, 2021 and March 31, 2021, respectively) | 5,545 | 4,978 | ||||
Additional paid-in capital | 43,136,098 | 40,755,327 | ||||
Accumulated deficit | (39,893,610) | (34,064,921) | ||||
Accumulated other comprehensive loss | (843,501) | (838,671) | ||||
Total Senmiao Technology Limited stockholders' equity | 2,404,532 | 5,856,713 | ||||
Non-controlling interests | (4,965,365) | (3,284,143) | ||||
Total equity (deficiency) | (2,560,833) | 2,572,570 | ||||
Total liabilities and equity (deficiency) | $ | 17,702,363 | $ | 22,303,279 | ||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND | ||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Revenues | $ | 2,855,909 | $ | 1,390,396 | $ | 4,705,984 | $ | 2,537,312 | ||||
Cost of revenues | (2,868,309) | (994,515) | (6,647,655) | (1,794,771) | ||||||||
Gross profit (loss) | (12,400) | 395,881 | (1,941,671) | 742,541 | ||||||||
Operating expenses | ||||||||||||
Selling, general and administrative expenses | (2,981,720) | (2,749,209) | (6,664,997) | (4,709,634) | ||||||||
Provision for doubtful accounts, net of recovery | (57,187) | 47,540 | (102,740) | (81,072) | ||||||||
Impairments of long-lived assets and goodwill | (5,886) | (80,223) | (170,143) | (80,223) | ||||||||
Total operating expenses | (3,044,793) | (2,781,892) | (6,937,880) | (4,870,929) | ||||||||
Loss from operations | (3,057,193) | (2,386,011) | (8,879,551) | (4,128,388) | ||||||||
Other income (expense) | ||||||||||||
Other income (expense), net | 38,705 | 135,457 | (17,954) | 129,381 | ||||||||
Interest expense | (12,952) | (14,892) | (27,648) | (35,540) | ||||||||
Interest expense on finance leases | (108,208) | (211,053) | (215,847) | (437,230) | ||||||||
Change in fair value of derivative liabilities | 3,017,734 | (129,961) | 1,648,450 | (412,941) | ||||||||
Total other income (expense), net | 2,935,279 | (220,449) | 1,387,001 | (756,330) | ||||||||
Loss before income taxes | (121,914) | (2,606,460) | (7,492,550) | (4,884,718) | ||||||||
Income tax expense | (11) | (705) | (11) | (6,977) | ||||||||
Net loss from continuing operations | (121,925) | (2,607,165) | (7,492,561) | (4,891,695) | ||||||||
Net income (loss) from discontinued operations, net of applicable income taxes | — | 7,875 | — | (77,779) | ||||||||
Net loss | (121,925) | (2,599,290) | (7,492,561) | (4,969,474) | ||||||||
Net loss attributable to non-controlling interests from continuing operations | 541,851 | 418,546 | 1,663,872 | 808,245 | ||||||||
Net income (loss) attributable to stockholders | $ | 419,926 | $ | (2,180,744) | $ | (5,828,689) | $ | (4,161,229) | ||||
Net loss | $ | (121,925) | $ | (2,599,290) | $ | (7,492,561) | $ | (4,969,474) | ||||
Other comprehensive loss | ||||||||||||
Foreign currency translation adjustment | (3,608) | (165,216) | (22,180) | (153,499) | ||||||||
Comprehensive loss | (125,533) | (2,764,506) | (7,514,741) | (5,122,973) | ||||||||
SENMIAO TECHNOLOGY LIMITED | ||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
less: Total comprehensive loss attributable to noncontrolling interests | (547,866) | (399,438) | (1,681,222) | (786,824) | ||||||||||||
Total comprehensive income (loss) attributable to stockholders | $ | 422,333 | $ | (2,365,068) | $ | (5,833,519) | $ | (4,336,149) | ||||||||
Weighted average number of common stock | ||||||||||||||||
Basic and diluted | 55,386,760 | 37,802,840 | 54,066,414 | 33,429,856 | ||||||||||||
Earnings (loss) per share - basic and diluted | ||||||||||||||||
Continuing operations | $ | 0.01 | $ | (0.06) | $ | (0.11) | $ | (0.12) | ||||||||
Earnings (loss) per share - basic and diluted | ||||||||||||||||
Discontinued operations | $ | — | $ | 0.00 | $ | — | $ | (0.00) | ||||||||
SENMIAO TECHNOLOGY LIMITED | ||||||
For the Six Months Ended | ||||||
September 30, | ||||||
2021 | 2020 | |||||
(Unaudited) | (Unaudited) | |||||
Cash Flows from Operating Activities: | ||||||
Net loss | $ | (7,492,561) | $ | (4,969,474) | ||
Net loss from discontinued operations | — | (77,779) | ||||
Net loss from continuing operations | (7,492,561) | (4,891,695) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization of property and equipment | 521,091 | 106,608 | ||||
Stock compensation expense | — | 445,000 | ||||
Amortization of right-of-use assets | 2,270,059 | 2,123,901 | ||||
Amortization of intangible assets | 74,643 | 41,670 | ||||
Provision for doubtful accounts, net of recovery | 102,740 | 81,072 | ||||
Impairments of long-lived assets | 170,143 | 80,223 | ||||
Gain on disposal of equipment | — | (412) | ||||
Change in fair value of derivative liabilities | (1,648,450) | 412,941 | ||||
Change in operating assets and liabilities | ||||||
Accounts receivable | 805,719 | 124,198 | ||||
Inventories | (134,268) | 278,161 | ||||
Prepayments, other receivables and other assets | (91,860) | (248,889) | ||||
Finance lease receivables | 377,710 | (46,913) | ||||
Accounts payable | 132,186 | (3,097) | ||||
Advances from customers | 74,690 | 11,864 | ||||
Income tax payable | 160 | 480 | ||||
Accrued expenses and other liabilities | 366,305 | 1,355,339 | ||||
Operating lease liabilities | (135,847) | (96,436) | ||||
Operating lease liabilities - related parties | (15,084) | 61,575 | ||||
Net cash used in operating activities from continuing operations | (4,622,624) | (164,410) | ||||
Net cash used in operating activities from discontinued operations | (1,382,239) | (1,131,564) | ||||
Net Cash Used in Operating Activities | (6,004,863) | (1,295,974) | ||||
Cash Flows from Investing Activities: | ||||||
Purchases of property and equipment | (2,139,602) | (19,572) | ||||
Net cash used in investing activities from continuing operations | (2,139,602) | (19,572) | ||||
Net cash used in investing activities from discontinued operations | (1,393) | (71) | ||||
Net Cash Used in Investing Activities | (2,140,995) | (19,643) | ||||
SENMIAO TECHNOLOGY LIMITED | ||||||
For the Six Months Ended | ||||||
September 30, | ||||||
2021 | 2020 | |||||
(Unaudited) | (Unaudited) | |||||
Cash Flows from Financing Activities: | ||||||
Net proceeds from issuance of common stock and warrants in a registered direct public offering | 5,771,053 | — | ||||
Net proceeds from issuance of common stock and warrants in an underwritten public offering | — | 6,098,297 | ||||
Net proceeds from issuance of common stock upon warrants exercised | 22,015 | 75,000 | ||||
Borrowings from a financial institution | 578,567 | 488,932 | ||||
Repayments to stockholders | — | (28,569) | ||||
Loan to a related party | — | (66,427) | ||||
Borrowings from a related party | 800,000 | — | ||||
Repayments to related parties and affiliates | (172,528) | (205,900) | ||||
Repayments of current borrowings from financial institutions | (318,575) | (150,999) | ||||
Principal payments of finance lease liabilities | (1,241,041) | (1,449,554) | ||||
Net cash provided by financing activities from continuing operations | 5,439,491 | 4,760,780 | ||||
Net cash provided by financing activities from discontinued operations | — | 28,569 | ||||
Net Cash Provided by Financing Activities | 5,439,491 | 4,789,349 | ||||
Effect of exchange rate changes on cash and cash equivalents | 24,396 | 76,259 | ||||
Net increase (decrease) in cash and cash equivalents | (2,681,971) | 3,549,991 | ||||
Cash and cash equivalents, beginning of period | 4,448,075 | 844,028 | ||||
Cash and cash equivalents, end of period | 1,766,104 | 4,394,019 | ||||
Less: Cash and cash equivalents from discontinued operations | — | — | ||||
Cash and cash equivalents from continuing operations, end of period | $ | 1,766,104 | $ | 4,394,019 | ||
Supplemental Cash Flow Information | ||||||
Cash paid for interest expense | $ | 27,648 | $ | 35,540 | ||
Cash paid for income tax | $ | — | $ | — | ||
Non-cash Transaction in Investing and Financing Activities | ||||||
Recognition of right-of-use assets and lease liabilities | $ | 108,201 | $ | 2,976,966 | ||
Recognition of right-of-use assets and lease liabilities, related parties | $ | 180,307 | $ | — | ||
Acquisition of equipment through prepayment and financing lease receivables offset | $ | — | $ | 312,864 | ||
Allocation of fair value of derivative liabilities for issuance of common stock proceeds | $ | 3,562,404 | $ | 241,919 | ||
Allocation of fair value of derivative liabilities to additional paid in capital upon warrants exercised | $ | 45,674 | $ | 56,662 | ||
Stock issued on deferred stock compensation | $ | — | $ | 445,000 | ||
SOURCE Senmiao Technology Limited
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