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Senmiao Technology Reports Fiscal 2021 Year-end Financial Results

July 8, 2021 GMT

CHENGDU, China, July 8, 2021 /PRNewswire/ -- Senmiao Technology Limited (“Senmiao” or the “Company”) (Nasdaq: AIHS), a financing and servicing company focused on the online ride-hailing industry in China and an operator of its own online ride-sharing platform, today announced financial results for the fiscal year ended March 31, 2021.

Fiscal 2021 Financial and Operating Highlights

  • Total revenues of $6.2 million, compared to $15.7 million in the prior fiscal year, primarily as a result of fewer newly facilitated automobile purchases and automobiles sold due to the adverse effects of the COVID-19 pandemic on online ride-hailing and the greater transportation industry as public travel restrictions were instituted
  • Significant decrease in revenues from automobile sales was offset by a $2.1 million increase in operating lease revenues from automobile rentals as Senmiao shifted its focus to this business in direct response to the pandemic, as well as $0.9 million in revenues from its online ride-hailing platform, which launched in October 2020 and has seen a significant ramp over the past several months, which is expected to continue given new and expanded partnerships and plans to expand to other cities
  • From October 23, 2020, the date Senmiao launched its online ride-hailing platform, to March 31, 2021, 4.4 million rides were completed through the platform with fares paid by riders totaling $12.4 million
  • Net cash used in operating activities from continuing operations of $2.2 million, compared to $4.5 million in the prior fiscal year

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Management Commentary

Xi Wen, Chairman, Chief Executive Officer and President of Senmiao, stated, “We believe Senmiao is better positioned today to become the leading financing and servicing company for the online ride-hailing industry in China as a result of the business decisions made in response to the challenges we overcame during the global pandemic. Our more flexible automobile rental options have been well received by the growing population of ride-hailing drivers in China, particularly as the industry has mostly recovered from the devastating impacts of COVID-19 and continues to improve as tourism and day-to-day travel are picking up once again. We anticipate the launch of our own online ride-hailing platform in October of last year to be our primary growth driver going forward, and we continue to ramp its development with key industry partnerships and expansion into new cities. As of the end of June 2021, our platform has helped facilitate 10.5 million rides since launch, and we believe this is only the beginning as we have established licensing agreements allowing us to bring our platform online in major cities including Beijing and Shanghai.”

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Mr. Wen continued, “Over the course of fiscal year 2021, we saw sequential top line revenue growth with each passing quarter, demonstrating the accelerating growth trajectory of our ride-hailing focused businesses. We are incredibly excited about the opportunities we see in this space, and given our strong financial position following registered direct offerings in 2021 that generated aggregate gross proceeds of $13.5 million for us to put toward growing the business, we are working earnestly toward becoming a major player in China’s online ride-hailing industry.”

Financial Review

Revenues

Total revenues were $6.2 million for the fiscal year ended March 31, 2021, compared to $15.7 million in the prior fiscal year. The decline from the prior fiscal year was largely due to the impact of COVID-19, which resulted in a significant decrease in the number of new automobile purchases as a significant number of ride-hailing drivers exited the ride-hailing business and tendered their vehicles to Senmiao for sublease and sale.

As the ride-hailing markets in Chengdu and Changsha have gradually recovered from the effects of the pandemic since April 2020, the number of automobiles tendered to Senmiao by ride-hailing drivers exiting the business has also decreased.

During the year ended March 31, 2021, Senmiao strategically shifted its business focus to automobile rental options for ride-hailing drivers. As a result, the automobile rental business generated operating lease revenues of $3.4 million for the year ended March 31, 2021, a 163% increase from $1.3 million in the prior fiscal year.

Cost of Revenues

Cost of revenues decreased to $6.0 million for the year ended March 31, 2021, from $12.3 million in the prior fiscal year, primarily due to a $10.9 million decrease in cost of automobiles sold during the period, which was partially offset by a $3.2 million increase in cost of automobiles under operating leases and a $1.3 million increase in direct expense and technical service fees related to Senmiao’s new online ride-hailing platform, as a result of the commencement and expansion of those two businesses.

Gross Profit

Gross profit was $0.2 million, or 3.1% gross margin, for the year ended March 31, 2021, compared to $3.4 million, or 21.6% gross margin, in the prior fiscal year, due to the decreased number of automobiles sold and facilitated new automobile purchases. During fiscal 2021, Senmiao shifted its business focus to operating its own online ride-hailing platform, which launched in October 2020. This business introduced a new revenue stream for the Company and mitigated the negative impact of the COVID-19 pandemic and intense competition in the online ride-hailing market in Chengdu and Changsha. As noted above, Senmiao incurred increased cost of revenues related to the launch of this new business, as well as paid cash incentives to attract drivers to its platform.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $10.3 million for the year ended March 31, 2021, compared to $5.5 million in the prior fiscal year. The SG&A increase mainly consisted of a $1.0 million increase in amortization of automobiles which were tendered to Senmiao but have not been sub-leased or sold, an increase of $1.9 million in salary and employee benefits as Senmiao’s employee headcount increased from 181 to 275, an increase of $1.0 million in professional service fees such as financial, legal and market consulting, and an increase of $0.9 million in advertising and promotion, rental and other office expenses.

Net Loss

Net loss from Senmiao’s continuing operations for the year ended March 31, 2021, was $12.6 million, compared to $4.3 million in the prior fiscal year, which was primarily the result of the decrease in revenue and gross profit and increase in SG&A expenses as stated above, as well as a $3.5 million increase in the loss as a result of the fair value change of derivative liabilities, and a $0.4 million increase in interest expense on finance leases as a result of an increase in aggregated tendered automobiles from the prior fiscal year.

Loss per Share

Loss per share for continuing operations was approximately $0.26 based on a weighted average number of basic and diluted common stock of 39.4 million, compared to approximately $0.11 based on a weighted average number of basic and diluted common stock of 28.0 million.

Financial Position

As of March 31, 2021, Senmiao had cash and cash equivalents of $4.4 million, compared to $0.8 million as of March 31, 2020, for its continuing operations. Total stockholders’ equity was $2.6 million as of March 31, 2021, compared to $1.5 million as of March 31, 2020.

The Company’s business is capital intensive. Subsequent to year-end (on May 13, 2021), Senmiao closed a registered direct offering of an aggregate of 5,531,916 shares of common stock at a price of $1.175 per share for aggregate gross proceeds of $6.5 million. Senmiao has 55.4 million common shares outstanding after the offering. Following the completion of this offering, the Company’s working capital deficit was $0.1 million.

Further information regarding Senmiao’s results of operations for the fiscal year ended March 31, 2021, can be found in Senmiao’s Annual Report on Form 10-K, which will be filed with the Securities and Exchange Commission.

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. The Company routinely provides important information 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 the 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.
Adam Prior, Senior Vice President
(212) 836-9606
aprior@equityny.com

In China
Lucy Ma, Associate
+86 10 5661 7012
lma@equityny.com

© 2021 Senmiao Technology Ltd. All rights reserved.


SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS

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




March 31,



March 31,




2021



2020


ASSETS









Current assets









Cash, and cash equivalents


$

4,448,075



$

833,888


Accounts receivable, net, current portion



1,437,195




660,645


Inventories



127,933




1,000,675


Finance lease receivables, net, current portion



541,605




459,110


Prepayments, other receivables and other assets, net



3,905,278




2,798,780


Due from related parties



39,572




26,461


Current assets - discontinued operations



393,348




826,580


Total current assets



10,893,006




6,606,139











Property and equipment, net









Property and equipment, net



3,700,147




469,201


Property and equipment, net - discontinued operations



5,592




11,206


Total property and equipment, net



3,705,739




480,407











Other assets









Operating lease right-of-use assets, net



499,221




473,661


Operating lease right-of-use assets, net, related parties



580,367




236,305


Financing lease right-of-use assets, net



4,778,772




5,440,362


Intangible assets, net



968,131




777,621


Goodwill



135,388




-


Accounts receivable, net, non-current



269,183




882,078


Finance lease receivables, net, non-current



473,472




734,145


Total other assets



7,704,534




8,544,172











Total assets


$

22,303,279



$

15,630,718











LIABILITIES AND EQUITY









Current liabilities









Borrowings from financial institutions


$

310,662



$

226,753


Accounts payable



44,769




4,065


Advances from customers



155,586




90,349


Income tax payable



17,408




16,267


Accrued expenses and other liabilities



6,655,592




2,008,391


Due to related parties and affiliates



352,827




152,679


Operating lease liabilities



209,644




149,582


Operating lease liabilities - related parties



243,726




151,655


Financing lease liabilities



5,172,943




3,473,967


Derivative liabilities



1,278,926




342,530


Current liabilities - discontinued operations



2,336,861




4,516,292


Total current liabilities



16,778,944




11,132,530











Other liabilities









Borrowings from financial institutions, non-current



44,962




64,221


Operating lease liabilities, non-current



263,708




297,167


Operating lease liabilities, non-current - related parties



341,549




88,349


Financing lease liabilities, non-current



2,256,553




2,576,094


Deferred tax liability



44,993




-


Total other liabilities



2,951,765




3,025,831











SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS (CONTINUED)

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





March 31,

2021




March 31,

2020











Total liabilities



19,730,709




14,158,361











Commitments and contingencies


















Stockholders' equity









Common stock (par value $0.0001 per share, 100,000,000 shares authorized; 49,780,725 and 29,008,818
shares issued and outstanding at March 31, 2021 and 2020, respectively)



4,978




2,901


Additional paid-in capital



40,755,327




27,013,137


Accumulated deficit



(34,064,921)




(23,704,863)


Accumulated other comprehensive loss



(838,671)




(507,478)


Total Senmiao Technology Limited stockholders' equity



5,855,342




2,803,697











Non-controlling interests



(3,284,143)




(1,331,340)











Total equity



2,572,570




1,472,357











Total liabilities and equity


$

22,303,279



$

15,630,718


SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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




For the
Three Months Ended
March 31,



For the
Year Ended
March 31,




2021



2020



2021



2020


Revenues


$

1,984,672



$

2,012,146



$

6,160,534



$

15,655,575


Cost of revenues



(2,380,906)




(1,647,337)




(5,969,492)




(12,280,238)


Gross profit (loss)



(396,234)




364,809




191,042




3,375,337



















Operating expenses

















Selling, general and administrative expenses



(3,162,220)




(2,238,794)




(10,273,104)




(5,496,955)


Recovery of (provision for) doubtful accounts



(78,477)




(3,176,087)




28,358




(3,404,336)


Impairments of long-lived assets



(8,633)




(70,984)




(130,839)




(70,984)


Total operating expenses



(3,249,330)




(5,485,865)




(10,375,585)




(8,972,275)



















Loss from operations



(3,645,564)




(5,121,056)




(10,184,543)




(5,596,938)



















Other income (expense)

















Other income (expense), net



31,093




8,017




87,888




(45,347)


Interest expense



(8,066)




(17,031)




(45,764)




(96,624)


Interest expense on finance leases



(145,745)




(373,407)




(733,202)




(373,407)


Change in fair value of derivative liabilities



(266,631)




287,318




(1,710,415)




1,796,724


Total other income (expense), net



(389,349)




(95,103)




(2,401,493)




1,281,346



















Loss before income taxes



(4,034,913)




(5,216,159)




(12,586,036)




(4,315,592)



















Income tax expenses



(163)




(234)




(14,627)




(33,184)



















Net loss from continuing operations



(4,035,076)




(5,216,393)




(12,600,663)




(4,348,776)



















Net income (loss) from discontinued operations, net of applicable
income taxes



16,375




6,600




(61,976)




(5,587,027)



















Net loss



(4,018,701)




(5,209,793)




(12,662,639)




(9,935,803)



















Net loss attributable to non-controlling interests from continuing operations



900,884




1,351,742




2,302,581




1,262,478



















Net loss attributable to stockholders


$

(3,117,817)



$

(3,858,051)



$

(10,360,058)



$

(8,673,325)



















Net loss


$

(4,018,701)



$

(5,209,793)



$

(12,662,639)



$

(9,935,803)



















Other comprehensive income (loss)

















Foreign currency translation adjustment



(99,217)




99,070




(314,669)




(154,913)



















Comprehensive loss



(4,117,918)




(5,110,723)




(12,977,308)




(10,090,716)



















Total comprehensive loss attributable to noncontrolling interests



(1,247,103)




(1,367,151)




(2,286,057)




(1,338,684)



















Total comprehensive loss attributable to stockholders


$

(2,870,815)



$

(3,743,572)



$

(10,691,251)



$

(8,752,032)


SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (CONTINUED)

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




For the Three Months Ended

March 31,



For the Year Ended

March 31,



2021



2020



2021



2020

Weighted average number of common stock
















Basic and diluted



47,143,967




29,008,818




39,430,889




28,023,498

















Earnings (loss) per share - basic and diluted
















Continuing operations


$

(0.07)



$

(0.13)



$

(0.26)



$

(0.11)

Discontinued operations


$

(0.00)



$

0.07



$

(0.00)



$

(0.13)


SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

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




For the Year Ended
March 31,



2021



2020

Cash Flows from Operating Activities:








Net loss


$

(12,662,639)



$

(9,935,803)

Net loss from discontinued operations



(61,976)




(5,587,027)

Net loss from continuing operations



(12,600,663)




(4,348,776)

Adjustments to reconcile net loss to net cash used in operating activities:








Depreciation and amortization of property and equipment



260,592




103,009

Stock based compensation expense



445,000




133,150

Amortization of right-of-use assets



4,316,162




1,553,523

Amortization of intangible assets



107,765




283

Provision (recovery) for doubtful accounts



(28,358)




3,404,336

Impairments of long-lived assets



130,839




70,984

Loss (gain) on disposal of equipment



(425)




3,608

Change in fair value of derivative liabilities



1,710,415




(1,796,724)

Change in operating assets and liabilities








Accounts receivable



49,624




(3,047,955)

Inventories



172,626




437,012

Prepayments, other receivables and other assets



(864,420)




(964,889)

Finance lease receivables



278,406




(1,185,031)

Accounts payable



(10,251)




4,144

Advances from customers



55,859




61,409

Income tax payable



(168)




(4,582)

Accrued expenses and other liabilities



4,083,378




1,138,316

Operating lease liabilities



(130,534)




(94,235)

Operating lease liabilities - related parties



(195,519)




2,125

Net cash used in operating activities from continuing operations



(2,219,672)




(4,530,293)

Net cash used in operating activities from discontinued operations



(1,716,395)




(1,917,371)

Net Cash used in Operating Activities



(3,936,067)




(6,447,664)









Cash Flows from Investing Activities:








Purchases of property and equipment



(2,491,296)




(495,241)

Prepayment of intangible assets



(25,347)




(470,000)

Cash acquired from XXTX, net of cash paid to XXTX[1]



8,065




-

Net cash used in investing activities from continuing operations



(2,508,578)




(965,241)

Net cash provided by (used in) investing activities from discontinued operations



(2,284)




1,825

Net Cash Used in Investing Activities



(2,510,862)




(963,416)









Cash Flows from Financing Activities:








Net proceeds from issuance of common stock and warrants in an underwritten public offering



5,261,297




-

Net proceeds from exercise of underwriters' over-allotment option



837,000




-

Net proceeds from issuance of common stock in registered direct public offering



5,743,905




5,142,124

Net proceeds from issuance of common stock upon warrants exercised



683,046




111

Borrowings from financial institutions



572,035




55,159

Repayments to third parties



-




(604,562)

Loan to related party



(10,579)




-

Borrowings from related parties and affiliates



-




1,305,166

Repayments from related parties



-




108,566

Repayments to related parties and affiliates



(37,445)




(1,405,356)

Repayments of current borrowings from financial institutions



(529,288)




(145,048)

Release of escrow receivable



-




600,000

Principal payments of finance lease liabilities



(2,230,765)




(975,958)

[1] XXTX is the entity associated with Senmiao’s Xixingtianxia ride-hailing platform.

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

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





For the Year Ended
March 31,




2021



2020









Net cash provided by financing activities from continuing operations



10,289,206




4,080,202

Net cash used in financing activities from discontinued operations



(29,429)




(648,405)

Net Cash Provided by Financing Activities



10,259,777




3,431,797









Effect of exchange rate changes on cash and cash equivalents



(208,800)




(197,200)









Net increase (decrease) in cash and cash equivalents



3,604,048




(4,176,483)

Cash and cash equivalents, beginning of year



844,027




5,020,510

Cash and cash equivalents, end of year



4,448,075




844,027









Less: Cash and cash equivalents from discontinued operations



-




(10,139)









Cash and cash equivalents from continuing operations, end of year


$

4,448,075



$

833,888









Supplemental Cash Flow Information








Cash paid for interest expense


$

45,764



$

96,624

Non-cash Transaction in Investing and Financing Activities








Prepayment in exchange of intangible assets


$

-



$

280,000

Recognition of right-of-use assets and lease liabilities


$

3,785,526



$

549,679

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


$

-



$

343,819

Acquisition of equipment through prepayment and financing lease


$

941,263



$

-

Allocation of fair value of derivative liabilities for issuance of common stock proceeds


$

997,193



$

3,150,006

Allocation of fair value of derivative liabilities to additional paid in capital upon warrants exercised


$

1,771,213



$

1,010,752

Issuance of restricted stock units from accrued expenses and other liabilities


$

-



$

44,200

Acquisition of XXTX with payables


$

317,835



$

-


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SOURCE Senmiao Technology Limited