PR Newswire | Nov 16, 2021 09:01AM EST

11/16 08:00 CST

Senmiao Technology Reports Fiscal 2022 Second Quarter Financial Results CHENGDU, China, Nov. 16, 2021

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 CommentaryXi 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

RevenuesTotal 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 RevenuesCost 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 LossGross 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 ExpensesSelling, 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 LossNet 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 ShareEarnings 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 PositionAs 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 LimitedHeadquartered 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 StatementsThis 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: edom333@ihongsen.com

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

csohn@equityny.com lma@equityny.com

(c) 2021 Senmiao Technology Ltd. All rights reserved.

SENMIAO TECHNOLOGY LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Expressed in U.S. dollar, except for the number of shares)



September 30, 2021March 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 458,853 541,605 portion

Prepayments, other receivables and other 3,947,284 3,905,278 assets, net

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 - - 5,592 discontinued operations

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, 633,326 580,367 related parties

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, 194,167 473,472 noncurrent

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 404,997 243,726 parties

Financing lease liabilities 4,998,400 5,172,943

Derivative liabilities 3,147,206 1,278,926

Current liabilities - discontinued 644,535 2,336,861 operations

Total current liabilities 18,140,748 16,778,944

SENMIAO TECHNOLOGY LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (Expressed in U.S. dollar, except for the number of shares)



September 30, 2021March 31, 2021

(Unaudited)

Other liabilities

Borrowings from financial institutions, 30,482 44,962 noncurrent

Operating lease liabilities, non-current 273,264 263,708

Operating lease liabilities, non-current 355,594 341,549 - related parties

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 5,545 4,978 and outstanding at September 30, 2021 and March 31, 2021, respectively)

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 2,404,532 5,856,713 stockholders' equity



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 COMPREHENSIVE LOSS (Expressed in U.S. dollar, except for the number of shares)



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 (12,400) 395,881 (1,941,671) 742,541 (loss)



Operating expenses

Selling, general and (2,981,720) (2,749,209) (6,664,997) (4,709,634)administrative expenses

Provision for doubtful (57,187) 47,540 (102,740) (81,072) accounts, net of recovery

Impairments of long-lived assets (5,886) (80,223) (170,143) (80,223) and goodwill

Total operating (3,044,793) (2,781,892) (6,937,880) (4,870,929)expenses



Loss from (3,057,193) (2,386,011) (8,879,551) (4,128,388)operations



Other income (expense)

Other income 38,705 135,457 (17,954) 129,381 (expense), net

Interest expense (12,952) (14,892) (27,648) (35,540)

Interest expense (108,208) (211,053) (215,847) (437,230) on finance leases

Change in fair value of 3,017,734 (129,961) 1,648,450 (412,941) derivative liabilities

Total other income (expense), 2,935,279 (220,449) 1,387,001 (756,330) net



Loss before (121,914) (2,606,460) (7,492,550) (4,884,718)income taxes

Income tax (11) (705) (11) (6,977) expense

Net loss from continuing (121,925) (2,607,165) (7,492,561) (4,891,695)operations

Net income (loss) from discontinued operations, net - 7,875 - (77,779) of applicable income taxes



Net loss (121,925) (2,599,290) (7,492,561) (4,969,474)

Net loss attributable to non-controlling 541,851 418,546 1,663,872 808,245 interests from continuing operations



Net income (loss) attributable to $419,926 $(2,180,744)$(5,828,689)$(4,161,229)stockholders

Net loss $(121,925) $(2,599,290)$(7,492,561)$(4,969,474)



Other comprehensive loss

Foreign currency translation (3,608) (165,216) (22,180) (153,499) adjustment



Comprehensive (125,533) (2,764,506) (7,514,741) (5,122,973)loss

SENMIAO TECHNOLOGY LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (CONTINUED) (Expressed in U.S. dollar, except for the number of shares)



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 (547,866) (399,438) (1,681,222) (786,824) noncontrolling interests

Total comprehensive income (loss) $422,333 $(2,365,068)$(5,833,519)$(4,336,149)attributable to stockholders

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 $0.01 $(0.06) $(0.11) $(0.12) operations



Earnings (loss) per share - basic and diluted

Discontinued $- $0.00 $- $(0.00) operations



SENMIAO TECHNOLOGY LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. dollar, except for the number of shares)



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 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (Expressed in U.S. dollar, except for the number of shares)



For the Six Months Ended

September 30,

2021 2020

(Unaudited) (Unaudited)

Cash Flows from Financing Activities:

Net proceeds from issuance of common stock and 5,771,053 - warrants in a registered direct public offering

Net proceeds from issuance of common stock and - 6,098,297 warrants in an underwritten public offering

Net proceeds from issuance of common stock upon 22,015 75,000 warrants exercised

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 (318,575) (150,999) institutions

Principal payments of finance lease liabilities (1,241,041) (1,449,554)

Net cash provided by financing activities from 5,439,491 4,760,780 continuing operations

Net cash provided by financing activities from - 28,569 discontinued operations

Net Cash Provided by Financing Activities 5,439,491 4,789,349



Effect of exchange rate changes on cash and 24,396 76,259 cash equivalents



Net increase (decrease) in cash and cash (2,681,971) 3,549,991 equivalents

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 $1,766,104 $4,394,019 operations, end of period

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 $108,201 $2,976,966 liabilities

Recognition of right-of-use assets and lease $180,307 $- liabilities, related parties

Acquisition of equipment through prepayment and$- $312,864 financing lease receivables offset

Allocation of fair value of derivative liabilities for issuance of common stock $3,562,404 $241,919 proceeds

Allocation of fair value of derivative liabilities to additional paid in capital upon $45,674 $56,662 warrants exercised

Stock issued on deferred stock compensation $- $445,000

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SOURCE Senmiao Technology Limited