CHENGDU, China, July 9, 2020 /PRNewswire/ -- Senmiao Technology Limited (NASDAQ: AIHS) ("Senmiao"), a provider of automobile transaction and related services targeting the ride-hailing industry in China, today announced its financial results for its full fiscal year ended March 31, 2020.
Fiscal Year 2020 Highlights
"Although we faced a significantly weaker operating environment as a result of COVID-19 in our fiscal fourth quarter after maintaining profitability through the first nine months, we grew our streamlined automobile transaction and related services revenue by five-fold" commented Xi Wen, Chairman, Chief Executive Officer and President of Senmiao. "We continue to believe in the huge long-term market opportunity resulting from the rapid development of the online ride-hailing service industry in China. Our near-term strategic business focus has shifted from the facilitation of automobile transactions and financing to providing more rentals of automobiles, and we are also streamlining expenses while the business environment improves. We are also actively exploring opportunities for new capital, such as our recently announced US$7 million financing transaction into our auto business operating entity in China, that will increase our ability to weather the downturn resulting from COVID-19 as well as competition and continue to expand our business in southwestern China. To summarize, we believe we are executing on our goal in becoming an outstanding and leading provider of automobile transaction and related services to the growing online ride-hailing eco-system in China."
Revenues
Total revenue from Senmiao's automobile transaction and related services business (the "Auto Business") was $15,655,575 for the full fiscal year ended March 31, 2020, an increase of $13,104,468, or 514% as compared with the fiscal year ended March 31, 2019, primarily due to Senmiao's significant expansion of the Auto Business. The revenue excludes $112,440 in revenue from online lending services that is now a discontinued business.
The increase is attributed to Senmiao's business expansion in Chengdu and Changsha. Although, Senmiao believes there is huge market opportunity resulting from the rapid development of the online ride-hailing service market in China, due to impact of measures and restrictions to combat the COVID-19 nationwide epidemic in China, Senmiao experienced a decrease in its revenue from its Auto Business for the three months ended March 31, 2020 as compared with the prior year.
Cost of Revenues
Cost of revenues was $12,280,238 for the full fiscal year ended March 31, 2020. Cost of revenues increased by $10,468,051, or 578% during the year ended March 31, 2020 as compared with the prior year and was attributed to the increase in the number of automobiles sold that increased from 212 to 1,176 as well as operating lease expenses in the year ended March 31, 2020.
Gross Profit
Gross profit was $3,375,337. Gross profit from Auto Business increased by $2,636,417 or 357% during the year ended March 31, 2020 as compared with the prior year mainly due to the business expansion and the increase in the number of facilitated new automobile purchases from the Auto Business.
Selling, General and Administrative Expenses
Selling, general and administrative expenses from Auto Business were $5,567,939 for the fiscal year ended March 31, 2020 as compared to $1,776,690 during the prior year, representing an increase of $3,791,249. The increase was mainly attributable to the increased salary and employee benefits, advertising and promotion, amortization of automobiles, rental and other office expenses by the expansion of the Auto Business. Meanwhile, the selling, general and administrative expenses for the discontinued online lending services decreased to $1,365,733 for the fiscal year ended March 31, 2020 from $2,242,905 for the fiscal year ended March 31, 2019.
Change in Fair Value of Derivative Liabilities
The change in fair value of derivative liabilities resulted in a gain of $1,796,724, derived from change of the fair value between March 31, 2020 and June 20, 2019 of the warrants issued in Senmiao's registered direct offering in June 2019.
Net Loss
Total net loss for the full fiscal year ended March 31, 2020 was $9,935,803 as compared to a net loss of $4,542,525 in the prior year. Net loss from Auto Business and discontinued online lending services for the full fiscal year ended March 31, 2020 was $4,348,776 and $5,587,027 as compared with a net loss of $1,155,775 and $3,386,750, respectively, during the prior year.
Loss per share
Loss per share for Auto Business was $0.11 and $0.05 and loss per share for discontinued online lending services was $0.20 and $0.13, respectively, for the full fiscal years ended March 31, 2020 and 2019.
Financial Position
As of March 31, 2020, Senmiao had cash and cash equivalents of $833,888 as compared to $3,967,980 as of March 31, 2019 for its Auto Business. Senmiao also had cash and cash equivalents of $10,139 as of March 31, 2020 as compared with $1,052,530 as of March 31, 2019 for its discontinued online lending services.
Impact of COVID-19
The COVID-19 outbreak in China adversely and materially affected Senmiao's business operations, financial condition and operating results in the quarter ended March 31, 2020, including but not limited to temporary closure of offices, decrease in revenues, slower collection of accounts receivables and additional allowance for doubtful accounts. However, as the ride-hailing markets in Chengdu and Changsha are gradually recovering from the impact of COVID-19, Senmiao expects its business to improve in the second half of 2020.
For additional related information, please see Senmiao's Annual Report on Form 10-K for the fiscal year ended March 31, 2020, 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, operating lease, guarantee and other automobile transaction services aimed principally at the growing ride-sharing market in Senmiao's areas of operation in China. 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 of Senmiao's Auto Business, the Chinese ride-sharing 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. 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 discontinuance of Senmiao's online lending business; Senmiao's future business development; product and service demand and acceptance; the risks and impact of any reoccurrence of the COVID-19 pandemic in China; 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:
Rene Vanguestaine
Christensen
Email: rvanguestaine@ChristensenIR.com
Phone: +86 178 1749 0483
Linda Bergkamp
Christensen
Email: lbergkamp@ChristensenIR.com
Phone: +1 480 614 3004
SENMIAO TECHNOLOGY LIMITED |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
As of March 31, 2020 and 2019 |
||||||||
(Expressed in U.S. dollar, except for the number of shares) |
||||||||
March 31, |
March 31, |
|||||||
2020 |
2019 |
|||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ |
833,888 |
$ |
3,967,980 |
||||
Accounts receivable, net, current portion |
660,645 |
199,909 |
||||||
Inventories |
1,000,675 |
1,508,244 |
||||||
Finance lease receivables, net, current portion |
459,110 |
10,254 |
||||||
Prepayments, other receivables and other assets, net |
2,798,780 |
3,787,254 |
||||||
Escrow receivable due within one year |
- |
600,000 |
||||||
Due from related parties |
26,461 |
140,498 |
||||||
Current assets - discontinued operations |
826,580 |
1,185,016 |
||||||
Total Current Assets |
6,606,139 |
11,399,155 |
||||||
Property and equipment, net |
||||||||
Property and equipment, net |
469,201 |
100,680 |
||||||
Property and equipment, net - discontinued operations |
11,206 |
25,205 |
||||||
Total Property and equipment, net |
480,407 |
125,885 |
||||||
Other Assets |
||||||||
Operating lease right-of-use assets, net |
473,661 |
- |
||||||
Operating lease right-of-use assets, net, related parties |
236,305 |
- |
||||||
Financing lease right-of-use assets, net |
5,440,362 |
- |
||||||
Intangible assets, net |
777,621 |
1,627 |
||||||
Prepayment for intangible assets |
- |
280,000 |
||||||
Accounts receivable, net, noncurrent |
882,078 |
- |
||||||
Finance lease receivables, net, noncurrent portion |
734,145 |
22,298 |
||||||
Other assets - discontinued operations |
- |
485,170 |
||||||
Total Other Assets |
8,544,172 |
789,095 |
||||||
Total Assets |
$ |
15,630,718 |
$ |
12,314,135 |
||||
LIABILITIES AND EQUITY |
||||||||
Current Liabilities |
||||||||
Borrowings from financial institutions |
$ |
226,753 |
$ |
219,157 |
||||
Borrowings from third parties |
- |
476,765 |
||||||
Accounts payable |
4,065 |
- |
||||||
Advance from customers |
90,349 |
31,776 |
||||||
Income tax payable |
16,267 |
21,905 |
||||||
Accrued expenses and other liabilities |
2,008,391 |
962,291 |
||||||
Due to related parties and affiliates |
152,679 |
415,931 |
||||||
Operating lease liabilities |
149,582 |
- |
||||||
Operating lease liabilities - related parties |
151,655 |
- |
||||||
Financing lease liabilities |
3,473,967 |
- |
||||||
Derivative liabilities |
342,530 |
- |
||||||
Current liabilities - discontinued operations |
4,516,292 |
1,625,779 |
||||||
Total Current Liabilities |
11,132,530 |
3,753,604 |
||||||
Other Liabilities |
||||||||
Borrowings from financial institutions, noncurrent |
64,221 |
177,789 |
||||||
Operating lease liabilities, noncurrent |
297,167 |
- |
||||||
Operating lease liabilities, noncurrent - related parties |
88,349 |
- |
||||||
Financing lease liabilities, noncurrent |
2,576,094 |
- |
||||||
Total Other Liabilities |
3,025,831 |
177,789 |
||||||
Total liabilities |
14,158,361 |
3,931,393 |
||||||
Commitments and Contingencies |
||||||||
Stockholders' Equity |
||||||||
Common stock (par value $0.0001 per share, 100,000,000 shares authorized; 29,008,818 and 25,945,255 shares issued and outstanding at March 31, 2020 and |
2,901 |
2,595 |
||||||
Additional paid-in capital |
27,013,137 |
23,833,112 |
||||||
Accumulated deficit |
(23,704,863) |
(15,031,538) |
||||||
Accumulated other comprehensive loss |
(507,478) |
(428,771) |
||||||
Total Senmiao Technology Limited Stockholders' Equity |
2,803,697 |
8,375,398 |
||||||
Noncontrolling interests |
(1,331,340) |
7,344 |
||||||
Total Equity |
1,472,357 |
8,382,742 |
||||||
Total Liabilities and Equity |
$ |
15,630,718 |
$ |
12,314,135 |
||||
SENMIAO TECHNOLOGY LIMITED |
||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
||||||||
(Expressed in U.S. dollar, except for the number of shares) |
||||||||
For the Years Ended March 31, |
||||||||
2020 |
2019 |
|||||||
Revenues |
$ |
15,655,575 |
$ |
2,551,107 |
||||
Cost of revenues |
(12,280,238) |
(1,812,187) |
||||||
Gross profit |
3,375,337 |
738,920 |
||||||
Operating expenses |
||||||||
Selling, general and administrative expenses |
(5,567,939) |
(1,776,690) |
||||||
Bad debt expense |
(3,404,336) |
(5,077) |
||||||
Total operating expenses |
(8,972,275) |
(1,781,767) |
||||||
Loss from operations |
(5,596,938) |
(1,042,847) |
||||||
Other income (expense) |
||||||||
Other expense, net |
(45,347) |
(57,145) |
||||||
Interest expense |
(96,624) |
(33,878) |
||||||
Interest expense on finance leases |
(373,407) |
- |
||||||
Change in fair value of derivative liabilities |
1,796,724 |
- |
||||||
Total other income (expense), net |
1,281,346 |
(91,023) |
||||||
Loss before income taxes |
(4,315,592) |
(1,133,870) |
||||||
Income tax expenses |
(33,184) |
(21,905) |
||||||
Net loss from continuing operations |
(4,348,776) |
(1,155,775) |
||||||
Net loss from discontinued operations, net of applicable income taxes |
(5,587,027) |
(3,386,750) |
||||||
Net loss |
(9,935,803) |
(4,542,525) |
||||||
Net loss (income) attributable to noncontrolling interests from continuing operations |
1,262,478 |
(7,344) |
||||||
Net loss attributable to stockholders |
$ |
(8,673,325) |
$ |
(4,549,869) |
||||
Net loss |
$ |
(9,935,803) |
$ |
(4,542,525) |
||||
Other comprehensive loss |
||||||||
Foreign currency translation adjustment |
(154,913) |
(175,010) |
||||||
Comprehensive loss |
(10,090,716) |
(4,717,535) |
||||||
Total comprehensive loss (income) attributable to noncontrolling interests |
1,338,684 |
(7,344) |
||||||
Total comprehensive loss attributable to stockholders |
$ |
(8,752,032) |
$ |
(4,724,879) |
||||
Weighted average number of common stock |
||||||||
Basic and diluted |
28,023,498 |
25,882,287 |
||||||
Loss per share - basic and diluted |
||||||||
Continuing operations |
$ |
(0.11) |
$ |
(0.05) |
||||
Discontinued operations |
$ |
(0.20) |
$ |
(0.13) |
||||
SENMIAO TECHNOLOGY LIMITED |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Expressed in U.S. dollar, except for the number of shares) |
||||||||
For the Years Ended March 31, |
||||||||
2020 |
2019 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net loss |
$ |
(9,935,803) |
$ |
(4,542,525) |
||||
Net loss from discontinued operations |
(5,587,027) |
(3,386,750) |
||||||
Net loss from continuing operations |
(4,348,776) |
(1,155,775) |
||||||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization of property and equipment |
103,009 |
12,247 |
||||||
Stock compensation expense |
133,150 |
44,200 |
||||||
Amortization of right-of-use assets |
1,553,523 |
- |
||||||
Amortization of intangible assets |
283 |
- |
||||||
Bad debt expense |
3,404,336 |
5,077 |
||||||
Impairment loss of right-of-use assets |
70,984 |
- |
||||||
Loss on disposal of equipment |
3,608 |
- |
||||||
Change in fair value of derivative liabilities |
(1,796,724) |
- |
||||||
Change in operating assets and liabilities |
||||||||
Accounts receivable |
(3,047,955) |
(148,249) |
||||||
Inventories |
437,012 |
(1,491,928) |
||||||
Prepayments, other receivables and other assets |
(964,889) |
(1,952,696) |
||||||
Finance lease receivables |
(1,185,031) |
- |
||||||
Accounts payable |
4,144 |
- |
||||||
Advances from customers |
61,409 |
12,725 |
||||||
Income tax payable |
(4,582) |
21,905 |
||||||
Accrued expenses and other liabilities |
1,138,316 |
99,515 |
||||||
Operating lease liabilities |
(94,235) |
- |
||||||
Operating lease liabilities - related parties |
2,125 |
- |
||||||
Net cash used in operating activities from continuing operations |
(4,530,293) |
(4,552,979) |
||||||
Net cash used in operating activities from discontinued operations |
(1,917,371) |
(1,703,247) |
||||||
Net Cash Used in Operating Activities |
(6,447,664) |
(6,256,226) |
||||||
Cash Flows from Investing Activities: |
||||||||
Purchases of property and equipment |
(495,241) |
(1,365) |
||||||
Purchase of intangible assets |
(470,000) |
(280,869) |
||||||
Addition in finance lease receivable |
- |
(32,200) |
||||||
Net cash used in investing activities from continuing operations |
(965,241) |
(314,434) |
||||||
Net cash provided by (used in) investing activities from discontinued operations |
1,825 |
(218,191) |
||||||
Net Cash Used in Investing Activities |
(963,416) |
(532,625) |
||||||
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 |
111 |
- |
||||||
Borrowings from financial institutions |
55,159 |
- |
||||||
Repayments to stockholders |
- |
(1,900,000) |
||||||
Repayments to third parties |
(604,562) |
- |
||||||
Repayments from related parties |
108,566 |
- |
||||||
Borrowings from related parties and affiliates |
1,305,166 |
471,608 |
||||||
Repayments to related parties and affiliates |
(1,405,356) |
(487,115) |
||||||
Repayments of current borrowings from financial institutions |
(145,048) |
- |
||||||
Repayments of noncurrent borrowings from financial institutions |
- |
(175,581) |
||||||
Release of escrow receivable |
600,000 |
600,000 |
||||||
Principal payments of finance lease liabilities |
(975,958) |
- |
||||||
Cash acquired from acquisition |
- |
218,816 |
||||||
Net cash provided by (used in) financing activities from continuing operations |
4,080,202 |
(1,272,272) |
||||||
Net cash (used in) provided by financing activities from discontinued operations |
(648,405) |
1,973,479 |
||||||
Net Cash Provided by Financing Activities |
3,431,797 |
701,207 |
||||||
Effect of exchange rate changes on cash and cash equivalents |
(197,200) |
(33,412) |
||||||
Net decrease in cash and cash equivalents |
(4,176,483) |
(6,121,056) |
||||||
Cash and cash equivalents, beginning of year |
5,020,510 |
11,141,566 |
||||||
Cash and cash equivalents, end of year |
844,027 |
5,020,510 |
||||||
Less: Cash and cash equivalents from discontinued operations |
(10,139) |
(1,052,530) |
||||||
Cash and cash equivalents from continuing operations, end period |
$ |
833,888 |
$ |
3,967,980 |
||||
Supplemental Cash Flow Information |
||||||||
Cash paid for interest expense |
$ |
96,624 |
$ |
33,878 |
||||
Cash paid for income tax |
$ |
- |
$ |
- |
||||
Non-cash Transaction in Investing and Financing Activities |
||||||||
IPO expenses paid by the Company's stockholders |
$ |
- |
$ |
70,687 |
||||
Assume of net liabilities of Ruixi, excluding cash and cash equivalents |
$ |
- |
$ |
149,680 |
||||
Prepayment in exchange of intangible assets |
$ |
280,000 |
$ |
- |
||||
Right-of-use assets obtained in exchange of lease liabilities |
$ |
549,679 |
$ |
- |
||||
Right-of-use assets obtained in exchange of lease liabilities - related parties |
$ |
343,819 |
$ |
- |
||||
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 |
$ |
1,010,752 |
$ |
- |
||||
Issuance of restricted stock units from accrued expenses and other liabilities |
$ |
44,200 |
$ |
- |
||||
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