CHENGDU, China, Nov. 15, 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
"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 |
||||
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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