Senmiao Technology Announces Unaudited Financial Results for its Second Fiscal Quarter Ended September 30, 2019
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 Zhou
Email: edom333@ihongsen.com
Phone: +86 28 6155 4399
Investor Relations:
Linda Bergkamp
Christensen
Email: lbergkamp@ChristensenIR.com
Phone: +1 480 614 3004
SENMIAO TECHNOLOGY LIMITED
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 2,869 2,595
shares authorized; 28,691,356 and 25,945,255 shares
issued and outstanding at September 30, 2019 and
March 31, 2019, respectively)
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
SENMIAO TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (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,
--- ---
2019 2018 2019 2018
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues $
5,921,166 $
71,508 $
11,015,606 $
196,534
Cost of revenues -4,709,184 -8,731,496
Gross profit 1,211,982 71,508 2,284,110 196,534
Operating expenses
Selling, general and administrative expenses -1,738,335 -782,451 -3,191,407 -1,754,720
Amortization of intangible assets -11,414 -86,791 -26,568 -173,088
Impairments of intangible assets and goodwill -266,534 -266,534
Total operating expenses -2,016,283 -869,242 -3,484,509 -1,927,808
Loss from operations -804,301 -797,734 -1,200,399 -1,731,274
Other income (expense)
Other (expense) income, net -22,779 7,729 9,462 10,905
Interest expense -25,306 -62,345
Change in fair value of derivative liabilities 1,998,202 1,994,806
Total other income, net 1,950,117 7,729 1,941,923 10,905
Income (loss) before income taxes 1,145,816 -790,005 741,524 -1,720,369
Income tax expenses -4,457 -105,598
Net income (loss) before non-controlling interests 1,141,359 -790,005 635,926 -1,720,369
Less: Net income attributable to noncontrolling interests -51,105 -124,033
Net income (loss) attributable to stockholders $
1,090,254 $
-790,005 $
511,893 $
-1,720,369
Net income (loss) $
1,141,359 $
-790,005 $
635,926 $
-1,720,369
Other comprehensive loss
Foreign currency translation adjustment -374,192 -57,965 -460,415 -106,700
Comprehensive income (loss) 767,167 -847,970 175,511 -1,827,069
Less: Total comprehensive income attributable to noncontrolling interests -46,200 -1,548
Total comprehensive income (loss) attributable to stockholders $
813,367 $
-847,970 $
177,059 $
-1,827,069
===
Weighted average number of common stock
Basic 28,237,413 25,879,400 27,185,205 25,879,400
Diluted 28,237,430 25,879,400 27,185,212 25,879,400
Earnings (loss) per share
Basic $
0.04 $
-0.03 $
0.02 $
-0.07
Diluted $
0.04 $
-0.03 $
0.02 $
-0.07
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,
---
2019 2018
(Unaudited) (Unaudited)
Cash Flows from Operating Activities:
Net income (loss) $
635,926 $
-1,720,369
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of property and equipment 56,016 4,897
Amortization of right-of-use assets 90,800
Amortization of intangible assets 26,568 173,088
Provision for doubtful accounts 166,558
Impairment loss of intangible assets 266,534
Loss on disposal of an equipment 4,621
Change in fair value of derivative liabilities -1,994,806
Change in operating assets and liabilities
Accounts receivable -2,606,829 -40,229
Inventories -804,853
Prepayments, receivables and other assets -1,311,125 31,418
Finance lease receivables -1,109,277
Accounts payable 167,472
Advances from customers 66,019
Income tax payable 87,469
Accrued expenses and other liabilities 319,448 -30,524
Lease liabilities -124,945
Net Cash Used in Operating Activities -6,064,404 -1,581,719
Cash Flows from Investing Activities:
Purchases of property and equipment -384,695 -27,271
Purchase of intangible assets -42,472
Prepayment of intangible assets -470,000
Net Cash Used in Investing Activities -854,695 -69,743
Cash Flows from Financing Activities:
Net proceeds from issuance of common stock in registered direct offering 5,142,124
Net proceeds from issuance of common stock upon warrants exercised 96
Proceeds borrowed from stockholders 1,574,617
Repayments to stockholders -870,249 -1,500,000
Repayments to third parties -462,370
Borrowings from related parties and affiliates 1,177,651
Repayments to related parties and affiliates -838,949
Repayments of current borrowings from financial institutions -97,306
Release of escrow receivable 600,000 600,000
Net Cash Provided by Financing Activities 4,650,997 674,617
Effect of exchange rate changes on cash and cash equivalents -213,741 -98,647
Net decrease in cash and cash equivalents -2,481,843 -1,075,492
Cash and cash equivalents, beginning of period 5,020,510 11,141,566
Cash and cash equivalents, end of period $
2,538,667 $
10,066,074
Supplemental Cash Flow Information
Cash paid for interest expense $
62,345
$
Cash paid for income tax
$
$
Non-cash Transaction in Investing and Financing Activities
IPO expenses paid by the Company's stockholders
$ $
70,687
Right-of-use assets obtained in exchange of operating lease liabilities $
960,908
$
===
Intangible assets received from prepayment $
40,457
$
Allocation of fair value of derivative liabilities for issuance of common stock proceeds $
3,150,006
$
===
Allocation of fair value of derivative liabilities to additional paid in capital upon warrants exercised $
961,631
$
===
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SOURCE Senmiao Technology Limited
