Senmiao Technology Reports Fiscal 2022 Year-end Financial Results

For the year ended March 31,

2022

2021

Revenues

$6,830,116

$3,978,847

Cost of revenues

$(5,183,806)

$(3,985,413)

Gross profit (loss)

$1,646,310

$(6,566)

Selling, general and administrative expenses

$(4,139,800)

$(4,455,967)

Loss from discontinued operations, net of applicable income taxes

$(2,747,209)

$(5,187,214)

Net gain from deconsolidation of VIEs - discontinued operations

$10,975,101

-

Gain (loss) from discontinued operations

$8,227,892

$(5,187,214)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS

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

March 31,

March 31,

2022

2021

ASSETS

Current assets

Cash, and cash equivalents

$

1,185,221

$

4,340,529

Accounts receivable, net, current portion

418,022

502,031

Inventories

286,488

127,933

Finance lease receivables, net, current portion

314,264

541,605

Prepayments, other receivables and other assets, net

2,713,208

2,660,083

Due from related parties

682,335

—

Current assets - discontinued operations

—

2,720,825

Total current assets

5,599,538

10,893,006

Property and equipment, net

Property and equipment, net

5,658,773

3,251,331

Property and equipment, net - discontinued operations

—

454,408

Total property and equipment, net

5,658,773

3,705,739

Other assets

Operating lease right-of-use assets, net

109,621

233,751

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

515,906

580,367

Financing lease right-of-use assets, net

305,933

577,079

Intangible assets, net

959,551

968,131

Goodwill

—

135,388

Accounts receivable, net, non-current

69

61,943

Finance lease receivables, net, non-current

92,980

473,472

Due from a related party, noncurrent

6,635,746

—

Other assets - discontinued operations

—

4,674,403

Total other assets

8,619,806

7,704,534

Total assets

$

19,878,117

$

22,303,279

LIABILITIES, MEZZANINE EQUITY AND EQUITY

Current liabilities

Borrowings from financial institutions

$

145,542

$

—

Accounts payable

14,446

44,769

Advances from customers

120,629

110,173

Accrued expenses and other liabilities

2,444,367

2,873,227

Due to related parties and affiliates

11,682

82,909

Operating lease liabilities

50,177

109,813

Operating lease liabilities - related parties

330,781

243,726

Financing lease liabilities

304,557

358,135

Derivative liabilities

2,215,204

1,278,926

Current liabilities - discontinued operations

528,426

11,677,266

Total current liabilities

6,165,811

16,778,944

Other liabilities

Operating lease liabilities, non-current

47,910

95,886

Operating lease liabilities, non-current - related parties

226,896

341,549

Financing lease liabilities, non-current

1,376

218,944

Deferred tax liability

46,386

44,993

Other liabilities - discontinued operations

—

2,250,393

Total other liabilities

322,568

2,951,765

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS (CONTINUED)

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

March 31,

2022

March 31,

2021

Total liabilities

$

6,488,379

$

19,730,709

Commitments and contingencies

Mezzanine Equity (redeemable)

Series A convertible preferred stock (par value $0.0001 per share, 5,000 shares authorized; 5,000 and
0 shares issued and outstanding at March 31, 2022 and 2021, respectively), net of issuance costs of
$118,344

820,799

—

Stockholders' equity

Common stock (par value $0.0001 per share, 10,000,000 shares authorized; 6,186,783
and 4,978,073 shares issued and outstanding at March 31, 2022 and 2021, respectively)*

630

498

Additional paid-in capital

42,803,033

40,759,807

Accumulated deficit

(34,601,545)

(34,064,921)

Accumulated other comprehensive loss

(109,454)

(838,671)

Total Senmiao Technology Limited stockholders' equity

8,092,664

5,856,713

Non-controlling interests

4,476,276

(3,284,143)

Total equity

12,568,939

2,572,570

Total liabilities and equity

$

19,878,117

$

22,303,279

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Expressed in U.S. dollars, except for share and per share amounts)

For the Year Ended
March 31,

2022

2021

Revenues

$

4,913,102

$

2,188,840

Cost of revenues

(6,511,031)

(1,984,079)

Gross profit (loss)

(1,597,929)

204,761

Operating expenses

Selling, general and administrative expenses

(9,525,408)

(5,905,579)

Provision for doubtful accounts, net of recovery

(235,279)

(299,658)

Impairments of inventories

(60,398)

—

Impairments of long-lived assets and goodwill

(142,974)

(10,953)

Total operating expenses

(9,964,059)

(6,216,190)

Loss from operations

(11,561,988)

(6,011,429)

Other income (expense)

Other income (expense), net

(107,444)

301,269

Interest expense

(5,893)

—

Interest expense on finance leases

(55,844)

(46,518)

Change in fair value of derivative liabilities

6,951,482

(1,710,415)

Issuance cost incurred for issuing series A convertible preferred stock

(821,892)

—

Total other income (expense), net

5,960,409

(1,455,664)

Loss before income taxes

(5,601,579)

(7,467,093)

Income tax expense

(4,566)

(8,332)

Net loss from continuing operations

(5,606,145)

(7,475,425)

Discontinued operations:

Loss from discontinued operations, net of applicable income taxes

(2,747,209)

(5,187,214)

Net gain from deconsolidation of VIEs - discontinued operations

10,975,101

—

Gain (loss) from discontinued operations

8,227,892

(5,187,214)

Net income (loss)

2,621,747

(12,662,639

Net (income) loss attributable to non-controlling interests from continuing operations

(3,872,645)

970,019

Net loss attributable to non-controlling interests from discontinued operations

714,274

1,332,562

Net loss attributable to stockholders

$

(536,624)

$

(10,360,058)

Net income (loss)

$

2,621,747

$

(12,662,639)

Other comprehensive income (loss)

Foreign currency translation adjustment

64,470

(314,669)

Comprehensive income (loss)

2,686,217

(12,977,308)

Less: Total comprehensive income (loss) attributable to noncontrolling interests

3,142,520

(2,286,057)

Total comprehensive loss attributable to stockholders

$

(456,303)

$

(10,691,251)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (CONTINUED)

(Expressed in U.S. dollars, except for share and per share amounts)

For the Year Ended

March 31,

2022

2021

Weighted average number of common stock

     Basic and diluted

5,726,997

3,943,089

Earnings (loss) per share - basic and diluted

Continuing operations

$

(1.66)

$

(1.65)

Discontinued operations

$

1.56

$

(0.98)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

For the Year Ended
March 31,

2022

2021

Cash Flows from Operating Activities:

Net income (loss)

$

2,621,747

$

(12,662,639)

Net income (loss) from discontinued operations

8,227,892

(5,187,214)

Net loss from continuing operations

(5,606,145)

(7,475,425)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization of property and equipment

956,400

85,530

Stock based compensation expense

653,000

445,000

Issuance cost incurred for issuing series A convertible preferred stock

821,892

-

Amortization of right-of-use assets

955,443

398,292

Amortization of intangible assets

160,831

107,765

Provision for doubtful accounts, net of recovery

235,279

299,658

Impairments of inventories

60,398

-

Impairments of long-lived assets

142,974

10,953

Gain on disposal of equipment

-

(425)

Change in fair value of derivative liabilities

(6,951,482)

1,710,415

Change in operating assets and liabilities

Accounts receivable

4,456

162,828

Inventories

(260,464)

172,626

Prepayments, other receivables and other assets

28,254

(1,366,724)

Finance lease receivables

634,103

348,919

Accounts payable

(31,434)

(6,067)

Advances from customers

6,678

47,895

Income tax payable

-

(168)

Accrued expenses and other liabilities

(377,965)

2,123,010

Operating lease liabilities

(240,051)

(64,701)

Operating lease liabilities - related parties

(228,281)

(195,519)

Net cash used in operating activities from continuing operations

(9,036,114)

(3,196,138)

Net cash used in operating activities from discontinued operations

(123,167)

(739,929)

Net Cash used in Operating Activities

(9,159,281)

(3,936,067)

Cash Flows from Investing Activities:

Purchases of property and equipment

(3,223,992)

(2,293,415)

Purchases of intangible assets

(141,730)

(25,347)

Cash released upon termination of a VIE

(193)

-

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

-

8,065

Net cash used in investing activities from continuing operations

(3,365,915)

(2,310,697)

Net cash used in investing activities from discontinued operations

(111,210)

(200,165)

Net Cash Used in Investing Activities

(3,477,125)

(2,510,862)

Cash Flows from Financing Activities:

Net proceeds from issuance of common stock and warrants in a registered direct offering

5,771,053

5,743,905

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

-

5,261,297

Net proceeds from issuance of common stock upon warrants exercised

22,015

683,046

Net proceeds from issuance of series A convertible preferred stock and warrants in a
private placement offering

4,369,937

-

Net proceeds from exercise of underwriters' over-allotment option

-

837,000

Borrowings from a financial institution

183,390

-

Loan to related parties

-

(101,142)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

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

For the Year Ended
March 31,

2021

2020

Repayments to related parties and affiliates

(117,761)

(37,445)

Repayments of current borrowings from financial institutions

(39,613)

-

Principal payments of finance lease liabilities

(433,611)

(2,230,765)

Net cash provided by financing activities from continuing operations

9,755,410

10,155,896

Net cash provided by financing activities from discontinued operations

-

103,881

                         Net Cash Provided by Financing Activities

9,755,410

10,259,777

Effect of exchange rate changes on cash and cash equivalents

(381,858)

(208,800)

Net (decrease) increase in cash and cash equivalents

(3,262,854)

3,604,048

Cash and cash equivalents, beginning of year

4,448,075

844,027

Cash and cash equivalents, end of year

1,185,221

4,448,075

Less: Cash and cash equivalents from discontinued operations

-

(107,546)

Cash and cash equivalents from continuing operations, end of year

$

1,185,221

$

4,340,529

Supplemental Cash Flow Information

Cash paid for interest expense

$

5,893

$

45,764

Non-cash Transaction in Investing and Financing Activities

Recognition of right-of-use assets and lease liabilities

$

273,555

$

3,785,526

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

$

181,620

$

-

Recognition of other receivables from Jinkailong upon deconsolidation

$

7,298,208

-

Acquisition of equipment through prepayment and financing lease

$

-

$

941,263

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

$

7,932,341

$

997,193

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

$

45,674

$

1,771,213

Acquisition of XXTX with payables

$

-

$

317,835

Acquisition of XXTX's minority interest with issuance of common stock

$

1,972,717

$

-