Financial Performance - Total revenues for the three months ended September 30, 2024, were $745,880, a decrease of 37% compared to $1,183,138 for the same period in 2023[13]. - Gross profit for the three months ended September 30, 2024, was $96,899, down from $180,256 in the same period last year, representing a decline of 46%[13]. - Net loss attributable to the Company's stockholders for the three months ended September 30, 2024, was $711,449, compared to a net loss of $925,957 for the same period in 2023, indicating a reduction in losses by approximately 23%[13]. - Total operating expenses for the three months ended September 30, 2024, were $712,646, a decrease from $1,352,511 in the same period last year, reflecting a reduction of 47%[13]. - The company reported a net loss from continuing operations of $238,739 for the three months ended September 30, 2024, compared to a loss of $1,082,401 for the same period in 2023[13]. - Total comprehensive loss attributable to stockholders for the three months ended September 30, 2024, was $(618,393), compared to $(961,711) for the same period in 2023, indicating an improvement of approximately 36%[13]. - For the six months ended September 30, 2024, the net loss from continuing operations was $974,624, compared to a net loss of $1,451,914 for the same period in 2023, indicating an improvement of approximately 33%[16]. - The company recorded a net loss of $1,188,271 for the six months ended June 30, 2024, compared to a net loss of $1,628,799 for the same period in 2023, reflecting an improvement of approximately 27%[16]. Liabilities and Equity - The total liabilities as of September 30, 2024, were $8,596,506, down from $9,861,484 as of March 31, 2024[12]. - The accumulated deficit increased to $(42,769,137) as of September 30, 2024, compared to $(41,384,268) as of March 31, 2024[12]. - As of September 30, 2024, total equity was $2,952,520, a decrease from $4,054,004 as of March 31, 2024, reflecting a decline of about 27%[15]. - The working capital deficit as of September 30, 2024, was approximately $3.4 million, indicating liquidity challenges[29]. Cash Flow and Investments - The company reported a net cash provided by operating activities of $192,349 for the six months ended June 30, 2024, compared to $88,129 for the same period in 2023, representing an increase of approximately 118%[16]. - The net cash used in investing activities from continuing operations was $271,250 for the six months ended June 30, 2024, compared to $276,658 for the same period in 2023, showing a slight decrease of about 2%[16]. - The cash, cash equivalents, and restricted cash at the end of the period were $792,025 as of June 30, 2024, down from $1,129,530 at the end of the previous period[17]. - As of September 30, 2024, cash and cash equivalents from continuing operations decreased to $792,025 from $1,127,615 as of September 30, 2023, representing a decline of approximately 29.7%[18]. Foreign Currency and Derivative Liabilities - The company experienced a foreign currency translation adjustment of $119,823 for the three months ended September 30, 2024, compared to a loss of $(37,597) in the same period last year[13]. - As of September 30, 2024, the carrying value of derivative liabilities was $304,247, an increase from $288,833 as of March 31, 2024, representing a change of approximately 5%[41]. - The fair value of derivative liabilities as of March 31, 2024, included a change of $(105,242) due to various factors, indicating significant volatility in the company's financial instruments[42]. Credit Losses and Allowances - The allowance for credit losses due from Jinkailong increased to $3,554,026 as of September 30, 2024, up from $3,099,701 as of March 31, 2024[26]. - The company recorded provisions for credit losses of $181,995 and $355,436 for the three and six months ended September 30, 2024, respectively[26]. - The Company recorded an allowance for credit losses of $1,590 against accounts receivable as of September 30, 2024, compared to $1,545 as of March 31, 2024, reflecting a slight increase in expected credit losses[52]. Business Operations and Strategy - The company completed the acquisition of its ride-hailing platform, Xixingtianxia, on August 20, 2024, disposing of its 100% equity interest[21]. - Management has expressed substantial doubt about the company's ability to continue as a going concern due to financial losses and liquidity issues[31]. - The company is exploring equity financing and other sources of financing to support its working capital needs[31]. - The Company aims to enhance its revenue growth by improving existing services and pricing strategies to attract new customers[178]. Market and Industry Trends - The online ride-hailing market in China is projected to grow from RMB354.7 billion in 2024 to RMB751.3 billion in 2028, driven by rising consumer demand and increased penetration of shared mobility services[187]. - Approximately 503 million users were reported in the online ride-hailing service sector by the end of December 2023, representing about 45.7% of total Chinese internet users[187]. - The total volume of online ride-hailing orders in China reached approximately 1,029 million in August 2024, marking a 10% increase from August 2023[189]. Revenue Breakdown - Operating lease revenues from automobile rentals were $584,418 million for the three months ended September 30, 2024, down from $1,020,993 million in the prior year[68]. - Financing revenues increased to $26,853 million in Q3 2024, compared to $11,340 million in Q3 2023, reflecting a significant growth of 137%[68]. - Service fees from NEVs leasing rose to $51,694 million in Q3 2024, compared to $4,626 million in Q3 2023, indicating a growth of 1023%[68]. - Monthly services commissions generated revenues of $30,681 for the three months ended September 30, 2024, down 53.7% from $66,221 in the same period in 2023, attributed to a decrease in the number of automobiles and drivers served[202]. Operational Challenges - The company has been fined approximately $323,000 since October 2020 for providing services to unqualified drivers, highlighting regulatory challenges in the industry[193]. - Approximately 36% of ride-hailing drivers had not obtained the necessary driver's license for online ride-hailing services as of September 30, 2024, which could impact operational capabilities[192].

Financial Position - Total current assets decreased from $2,651,160 to $2,273,697, a decline of approximately 14.2%[11] - Cash and cash equivalents decreased from $792,299 to $748,869, a reduction of about 5.5%[11] - Total liabilities increased from $5,573,116 to $5,714,908, an increase of approximately 2.5%[12] - Accumulated deficit increased from $(41,384,268) to $(42,057,688), reflecting a worsening financial position[12] - Total stockholders' equity decreased from $4,054,004 to $3,258,150, a decline of approximately 19.6%[12] - Total assets decreased from $9,861,484 to $9,207,422, a decline of approximately 6.6%[12] - The working capital deficit was approximately $3.3 million as of June 30, 2024, indicating liquidity challenges[32] Revenue and Profitability - Total revenues for the three months ended June 30, 2024, were $1,122,400, a decrease of 46.4% compared to $2,094,714 for the same period in 2023[14] - Gross profit for the three months ended June 30, 2024, was $320,535, down from $581,940 in 2023, reflecting a gross margin decline[14] - Net loss attributable to the Company's stockholders for the three months ended June 30, 2024, was $673,420, compared to a net loss of $427,828 in 2023, representing a 57.4% increase in loss[14] - Operating expenses totaled $1,113,709 for the three months ended June 30, 2024, down from $1,370,362 in 2023, indicating a reduction of 18.7%[14] - Total comprehensive loss attributable to the Company's stockholders for the three months ended June 30, 2024, was $735,740, compared to $923,965 in 2023, indicating a decrease of 20.4%[14] Cash Flow and Liquidity - Net cash provided by operating activities was $16,762 for the three months ended June 30, 2024, a significant decrease from $204,866 in 2023[19] - Cash, cash equivalents, and restricted cash at the end of the period were $751,457, down from $1,173,795 at the end of June 30, 2023[19] - As of June 30, 2024, total cash, cash equivalents, and restricted cash amounted to $751,457, a decrease of approximately 36% from $1,173,795 as of June 30, 2023[21] Credit Losses and Provisions - The company recognized a provision for credit losses of $173,441 for the three months ended June 30, 2024, compared to $127,073 in 2023, reflecting an increase of 36.5%[19] - The Company recorded an allowance for credit losses of $1,535 against accounts receivable as of June 30, 2024, slightly down from $1,545 as of March 31, 2024[60] - The allowance for credit losses for prepayments and other receivables was $20,342 as of June 30, 2024, down from $20,474 as of March 31, 2024[100] Segment Performance - Revenue from Automobile Transaction and Related Services was $879,009, down 26.0% from $1,189,108 in the previous year[73] - Online Ride-hailing Platform Services generated $243,391, a significant decline of 73.1% from $905,606 in the prior year[73] Derivative Liabilities and Fair Value - As of June 30, 2024, the total derivative liabilities amounted to $297,120, an increase from $288,833 as of March 31, 2024, reflecting a change in fair value of $8,287[48] - The fair value of derivative instruments related to warrants as of June 30, 2024, totaled $291,973, down from $294,833 as of March 31, 2024, reflecting a decrease of 1.0%[122] Management and Operational Challenges - Management has expressed substantial doubt about the company's ability to continue as a going concern due to ongoing financial losses and liquidity issues[33] - The company is exploring equity financing and other sources of financing to support its working capital needs[33] - The company is actively seeking to improve its internal controls and financial reporting processes due to identified weaknesses[275] - The company plans to enhance its IT environment and internal audit functions to address compliance and operational deficiencies[276] Stock and Equity - The weighted average number of common stock shares increased to 10,518,040 for the three months ended June 30, 2024, compared to 7,891,392 in 2023[14] - The conversion price of the series A Convertible Preferred Shares was reduced from $4.10 to $2.00, increasing the number of common stock shares available upon conversion from 1,092,683 to 2,240,000[130] - As of June 30, 2024, the Company granted a total of 30,379 RSUs, with 26,447 RSUs issued under the Equity Incentive Plan[128] Expenses and Cost Management - The company made employee benefit contributions of $44,549 for the three months ended June 30, 2024, compared to $78,843 for the same period in 2023, a decrease of 43.5%[119] - The company incurred rental expenses of $4,516 for the three months ended June 30, 2024, compared to $30,327 for the same period in 2023, indicating a decrease of 85.1%[156] - Operating lease costs for automobiles totaled $224,713 for the three months ended June 30, 2024, down 56.5% from $515,874 in the same period of 2023[163]

Revenue Generation - The company generated revenue of approximately $2.5 million from online ride-hailing platform services during the year ended March 31, 2024, after deducting $0.3 million in incentives paid to active drivers[26]. - Revenue from automobile sales amounted to $8,822, with a total of 1,516 automobiles sold valued at approximately $14.5 million since the acquisition of Hunan Ruixi[24]. - The company earned $196,099 from monthly service commissions related to automobile management and related services during the year ended March 31, 2024[19]. - Revenue from NEVs leasing and purchase services was $45,231 and $36,637, respectively, for the year ended March 31, 2024[21]. - The average monthly rental income from over 1,400 leased automobiles was approximately $485 per automobile for the year ended March 31, 2024[18]. Ride-Hailing Operations - Approximately 4.9 million rides were completed through the Xixingtianxia platform, with a gross fare of approximately $15.1 million during the same period[26]. - The online ride-hailing platform currently services drivers in 22 cities across China, including Chengdu and Changsha[25]. - As of March 31, 2024, Hunan Ruixi serviced 108 online ride-hailing drivers, with a provision for credit losses of $4,209 recognized against receivables[41]. - The average daily rides completed through the online ride-hailing platform decreased during COVID-19 resurgence periods, impacting income[43]. - The company plans to expand its driver base for the ride-hailing platform and automobile rental business while enhancing driver loyalty[26]. Regulatory Compliance - The company is required to obtain specific permits for its online ride-hailing business and for drivers and vehicles on its platform, ensuring regulatory compliance[70]. - Regulatory measures in China, including the Personal Information Protection Law, impose strict requirements on the collection and processing of user personal information, affecting operational costs[66]. - The company has incurred significant expenses to comply with cybersecurity and information security standards, which may increase due to changes in regulations[69]. - The company actively monitors the regulatory landscape, particularly regarding cybersecurity and personal information protection, to mitigate risks associated with compliance[59]. - The company must ensure that no unqualified vehicles and drivers are provided with information for online ride-hailing services[75]. Competition and Market Position - The online ride-hailing industry in China is highly competitive, with approximately 300 automobile financing and leasing companies operating in Chengdu and Changsha as of June 2024[55]. - Didi Chuxing holds over 80% market share in China's online ride-hailing platforms, prompting the company to collaborate with well-known aggregation platforms instead of competing directly[56]. - The company faces significant competition from well-capitalized rivals offering discounts and incentives, which may impact its market position[57]. - The company expects to enhance cooperation with other aggregation platforms to gain a competitive advantage in the online ride-hailing industry[56]. Financial Health and Investments - The company has made cumulative capital contributions of RMB40.41 million (approximately $5.60 million) to XXTX, which became a wholly-owned subsidiary[36]. - As of March 31, 2024, the total registered capital of all the Company's direct subsidiaries was approximately RMB 513 million (approximately $71.1 million)[97]. - Most of the Company's subsidiaries in the PRC have suffered accumulated losses, indicating they do not have the ability to transfer net assets to the Company[99]. - The Company may require additional cash resources from its PRC subsidiaries in the future due to changes in business conditions or to fund acquisitions[99]. Employee and Operational Management - The company has a total of 55 full-time employees, with 45 in the Automobile Transaction and Related Services segment and 7 in the Online Ride-hailing Platform Services segment[150]. - The company is developing an integrated information system for its Automobile Transaction and Related Services to standardize transaction processes and improve efficiency[157]. - The company is in the process of developing a comprehensive management system linking key information between its Automobile Transaction and Related Services and Online Ride-hailing Platform Services[157]. Legal and Taxation Matters - The PRC Anti-money Laundering Law requires financial institutions to adopt precautionary measures and report large and suspicious transactions[110]. - The PRC Enterprise Income Tax Law imposes a uniform 25% tax rate on worldwide income for resident enterprises established outside the PRC with "de facto management bodies" in China[130]. - Non-PRC resident enterprises transferring equity interests in PRC tax resident enterprises must report to tax authorities and may face a withholding tax of up to 10%[133]. - Small low profit enterprises in China benefit from a reduced tax rate of 20% on the first RMB1 million of annual income and 50% on income exceeding RMB1 million, applicable until December 31, 2024[136]. Insurance and Employee Benefits - The company maintains adequate insurance coverage as required by Chinese laws, including accident and commercial liability insurance for its automobiles[161]. - The company participates in various government statutory employee benefit plans, including pension and medical insurance, but has not made adequate payments and may face penalties[153].

Core Viewpoint - Senmiao Technology Limited has entered into a strategic cooperation agreement with Chengdu Daren Duoduo Culture Media to develop an AI-driven application called "Thinking Cell" aimed at enhancing support and services for local lifestyle merchants and ride-hailing drivers [1][2][3] Group 1: Agreement Details - The agreement was signed on February 20, 2024, between Senmiao's subsidiary Zecheng and Daren Duoduo [2] - Thinking Cell will provide customized operational support for local merchants and ride-hailing drivers, utilizing existing AI models for technological support [2] - Daren Duoduo will manage the comprehensive operation of the Thinking Cell application [2] Group 2: Application Expansion - There are plans to explore additional application scenarios for Thinking Cell, including enhancing the online ride-hailing experience and improving financial outcomes for influencers [3] - The collaboration aims to support Senmiao's SMS promotional campaigns and enable drivers to offer customized services to customers [2][3] Group 3: Company Overview - Senmiao Technology Limited is headquartered in Chengdu, Sichuan Province, and focuses on the online ride-hailing market in China, providing various automobile transaction services [4]

Core Insights - Senmiao Technology Limited reported total revenues of $1.6 million for the fiscal 2024 third quarter, a decrease from $1.7 million in the prior-year period, primarily due to reduced revenues from online ride-hailing services, partially offset by growth in the automobile rental business [1][3] - The company narrowed its loss from operations to $1.1 million from $1.3 million year-over-year, and net loss decreased to $0.9 million from $1.0 million [1][5] - The automobile rental business saw a 27.0% increase in operating lease revenues, reaching $1.0 million, attributed to improved utilization rates [3][5] Financial Performance - Total revenues for the third quarter were $1.6 million, with the automobile rental business contributing $1.0 million and the online ride-hailing platform generating $0.5 million [1][3] - Gross profit increased by 128.5% to $0.4 million, driven by higher contributions from the automobile rental segment [5] - Selling, general and administrative expenses decreased by 24.0% to $1.1 million, reflecting ongoing cost control measures [5] Operational Highlights - Since the launch of its online ride-hailing platform on October 23, 2020, Senmiao has completed over 35.4 million rides, generating total fares of $114.0 million [1] - The company operates in 26 cities across China, including major markets like Chengdu, Changsha, and Guangzhou [1] - A partnership with Anhui Lianma Technology Co., Ltd. is expected to enhance order completion rates and operational efficiency [2] Cost Management - Cost of revenues decreased by 22.9% to $1.2 million, mainly due to reduced maintenance and insurance expenses related to the automobile rental business [4][5] - The company has implemented cost-cutting initiatives that have successfully reduced SG&A expenses [2][5] Financial Position - As of December 31, 2023, cash and cash equivalents stood at $1.1 million, down from $1.6 million as of March 31, 2023 [5][8] - Total stockholders' equity decreased to $2.2 million from $4.4 million during the same period [5][11]

Financial Position - Total assets decreased from $14,238,615 to $12,135,150, representing a decline of approximately 14.8%[12] - Current liabilities increased from $5,184,823 to $5,418,047, reflecting an increase of about 4.5%[12] - Cash and cash equivalents decreased from $1,610,090 to $1,064,822, a reduction of approximately 33.9%[12] - Total stockholders' equity decreased from $4,394,214 to $2,238,876, a decline of approximately 49.1%[13] - Non-controlling interests decreased from $3,833,466 to $3,626,870, a reduction of about 5.4%[14] - Total liabilities increased from $5,741,549 to $6,035,040, representing an increase of about 5.1%[14] - Total current assets increased from $4,854,786 to $5,042,414, reflecting an increase of approximately 3.9%[12] - The total accumulated deficit as of December 31, 2023, was $40,003,077, compared to $36,323,523 as of December 31, 2022, indicating an increase of approximately 10.5%[22] - The total equity as of December 31, 2023, was $5,865,746, a decrease from $10,005,952 as of December 31, 2022, representing a decline of approximately 41.5%[22] Revenue and Profitability - Total revenues for the three months ended December 31, 2023, were $1,611,277, a decrease of 5.8% compared to $1,710,172 for the same period in 2022[15] - Gross profit for the nine months ended December 31, 2023, was $1,373,619, compared to $951,548 for the same period in 2022, reflecting a significant increase of 44.4%[15] - Net loss attributable to the Company's stockholders for the three months ended December 31, 2023, was $(933,998), compared to $(971,341) for the same period in 2022, indicating a reduction in losses[15] - Total comprehensive loss attributable to stockholders for the nine months ended December 31, 2023, was $(2,634,660), compared to $(2,940,216) for the same period in 2022, showing an improvement[15] - The company reported a loss from operations of $(1,079,707) for the three months ended December 31, 2023, compared to $(1,329,376) for the same period in 2022, indicating a decrease in operational losses[15] - The cost of revenues for the nine months ended December 31, 2023, was $(4,166,456), down from $(5,372,370) for the same period in 2022, indicating cost management efforts[15] Cash Flow and Investments - The company reported a net cash provided by operating activities of $254,749 for the nine months ended December 31, 2023, compared to $249,287 for the same period in 2022, indicating a slight increase of 2%[20] - The company had a net cash used in investing activities of $541,204 for the nine months ended December 31, 2023, compared to a net cash provided of $287,146 in the same period of 2022[20] - As of December 31, 2023, total cash, cash equivalents, and restricted cash amounted to $1,067,197, a decrease from $1,537,609 at the end of December 31, 2022[22] Segment Information - The Company operates in two segments: automobile transaction and related services, and online ride-hailing platform services, with operations in Chengdu, Changsha, and 24 other cities in China[26] Credit and Allowance for Losses - The allowance for credit losses due from Jinkailong was $2,115,735 as of December 31, 2023, with a provision for credit losses of $680,396 recorded during the nine months ended December 31, 2023[34] - The company did not record any allowance for credit losses against accounts receivable as of December 31, 2023, and March 31, 2023[65] - The company has not recorded any allowance against the balance from automobile purchasers during the three and nine months ended December 31, 2023[127] Derivative Liabilities and Fair Value - The fair value of derivative liabilities as of December 31, 2023, is $91,755, a decrease from $501,782 as of March 31, 2023[54] - The change in fair value of derivative liabilities for the nine months ended December 31, 2023, resulted in a decrease of $410,021[54] - The company reported a significant change in the fair value of derivative liabilities, with a notable decrease in values for various warrants from March 31, 2023, to December 31, 2023[54] Taxation and Valuation Allowances - The net operating loss for U.S. income taxes for the nine months ended December 31, 2023, was approximately $1.3 million, compared to $0.4 million for the same period in 2022[164] - As of December 31, 2023, the Company's net operating loss carryforward for U.S. income taxes was approximately $8.5 million[164] - The Company provided a 100% valuation allowance on deferred tax assets related to net operating loss carryforwards in the U.S. and PRC, totaling approximately $4.9 million as of December 31, 2023[168] Operational Expenses - Employee benefit contributions for the three months ended December 31, 2023, were $67,565, down from $107,638 for the same period in 2022, a decrease of about 37.2%[143] - The total interest expense for the three months ended December 31, 2023, was $7,852, compared to $6,975 for the same period in 2022, an increase of approximately 12.6%[137] Future Commitments and Liabilities - As of December 31, 2023, the Company had a working capital deficit of approximately $0.4 million and a purchase commitment of approximately $0.8 million for 100 automobiles[39] - The company expects to complete the remaining automobile purchase of 100 units by December 31, 2024, with prepayments of $650,713 made as of December 31, 2023[135] - The company is subject to a potential future payment of approximately $840,000 to Impawn due to joint and several liability guarantees for loans[204] Management Concerns - Management has expressed substantial doubt about the Company's ability to continue as a going concern if significant revenue is not generated[41]

Core Viewpoint - Senmiao Technology Limited reported a 13.6% increase in completed orders for its online ride-hailing platform in December 2023, reaching approximately 0.55 million orders, attributed to a strategic partnership with Anhui Lianma Technology [1][2]. Group 1: Operating Metrics - In December 2023, Senmiao and its affiliates completed approximately 0.55 million total orders, up from 0.48 million in November 2023 [1]. - Since the launch of its platform in October 2020, Senmiao has completed over 26.2 million rides, with approximately 9.2 million rides completed through partner platforms under a new operational model [2][3]. - The number of Active Drivers in December 2023 was 5,127, a decrease from 5,240 in November 2023 [1][2]. Group 2: Business Models - The original model allows orders from partner platforms to be completed by Senmiao's own platform, where Senmiao earns commissions based on a percentage of the order value [4]. - The new model, initiated in August 2021, enables ride-hailing requests to be completed on partner platforms using Senmiao's network of cars and drivers for a fixed monthly fee [4][5]. Group 3: Future Reporting - Starting in 2024, Senmiao will provide updates on its operating metrics on a quarterly basis as part of its financial disclosures [2].

Core Viewpoint - Senmiao Technology Limited has entered into a strategic cooperation agreement with Anhui Lianma Technology Co., Ltd to enhance its online ride-hailing platform operations in major Chinese cities, aiming to increase completed orders and operational efficiency amidst rising competition and compliance challenges [1][2][3]. Group 1: Strategic Cooperation - The agreement, signed on November 30, 2023, involves Senmiao and Lianma collaborating on ride-hailing platform operations in cities such as Chengdu, Changsha, and Guangzhou [2]. - Lianma will manage various operational aspects for Senmiao, including business development, driver and vehicle resource management, platform management, and customer service, with service fees based on completed orders [2][3]. Group 2: Operational Impact - Senmiao's Chairman and CEO, Xi Wen, expressed confidence that the partnership with Lianma will lead to an increase in monthly completed orders and improved operational efficiency, which is crucial given the competitive landscape and compliance scrutiny from Gaode [3]. - The original model allows orders from partner platforms to be fulfilled by Senmiao's platform, enabling riders to access Senmiao's services through partner platforms [3]. Group 3: Company Overview - Senmiao Technology Limited, headquartered in Chengdu, Sichuan Province, provides automobile transaction services and operates its own ride-hailing platform, targeting the growing online ride-hailing market in China [4].

[Front Matter](index=1&type=section&id=Front%20Matter) This section contains preliminary information including the report type, company details, and a cautionary note regarding forward-looking statements [Cover Page](index=1&type=section&id=Cover%20Page) This Form 10-Q Quarterly Report for Senmiao Technology Limited (AIHS) covers the period ended September 30, 2023 - The report is a **Form 10-Q Quarterly Report**[2](index=2&type=chunk) - The company is **Senmiao Technology Limited (AIHS)**[3](index=3&type=chunk) - The reporting period ended on **September 30, 2023**[2](index=2&type=chunk) - **9,568,040 shares** of common stock were outstanding as of November 10, 2023[3](index=3&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section warns that the report contains forward-looking statements subject to significant risks and uncertainties - The report contains forward-looking statements based on management's current expectations, subject to various risks[6](index=6&type=chunk) - Key risk factors include business expansion, public health epidemics, Chinese economic growth, competition, and policy changes[6](index=6&type=chunk) - The company operates in an evolving environment with emerging risks and disclaims any obligation to update forward-looking statements[7](index=7&type=chunk)[8](index=8&type=chunk) [PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's unaudited consolidated financial statements and related notes for the period ended September 30, 2023 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | Sep 30, 2023 (USD) | Mar 31, 2023 (USD) | | :--- | :--- | :--- | | **Total Current Assets** | 5,263,710 | 4,854,786 | | **Total Assets** | 12,658,665 | 14,238,615 | | **Total Current Liabilities** | 5,596,978 | 5,184,823 | | **Total Liabilities** | 6,281,320 | 5,741,549 | | **Total Equity** | 6,142,981 | 8,227,680 | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Sep 30, 2023 (USD) | Six Months Ended Sep 30, 2023 (USD) | | :--- | :--- | :--- | | **Total Revenues** | 1,826,951 | 3,921,665 | | **Gross Profit** | 374,111 | 956,051 | | **Loss from Operations** | (1,281,945) | (2,070,367) | | **Net Loss** | (1,207,452) | (1,628,799) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Six Months Ended Sep 30, 2023 (USD) | Six Months Ended Sep 30, 2022 (USD) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | 88,129 | 512,205 | | **Net Cash (Used in) Provided by Investing Activities** | (276,658) | 414,261 | | **Net Cash (Used in) Provided by Financing Activities** | (22,926) | 32,075 | | **Net (Decrease) in Cash** | (302,976) | 780,311 | [Note 1. ORGANIZATION AND PRINCIPAL ACTIVITIES](index=8&type=section&id=Note%201.%20ORGANIZATION%20AND%20PRINCIPAL%20ACTIVITIES) Senmiao Technology Limited operates in China through two segments: automobile transaction services and online ride-hailing platform services - The company operates two primary business segments in the PRC: **automobile transaction services** and **online ride-hailing platform services (Xixingtianxia)**[25](index=25&type=chunk)[26](index=26&type=chunk) - The ride-hailing platform operates in **27 cities** across China[26](index=26&type=chunk) - On March 31, 2022, the company deconsolidated Jinkailong, which is now a **35% equity investee**[31](index=31&type=chunk)[32](index=32&type=chunk) - As of September 30, 2023, a net balance of **$4,250,553** was due from Jinkailong[33](index=33&type=chunk) [Note 2. GOING CONCERN](index=11&type=section&id=Note%202.%20GOING%20CONCERN) Management expresses substantial doubt about the company's ability to continue as a going concern due to financial losses and commitments - Management has determined substantial doubt exists about the company's ability to continue as a going concern[40](index=40&type=chunk) - Key factors include a net loss of approximately **$1.6 million** for the six-month period, an accumulated deficit of approximately **$39.1 million**, a working capital deficit of approximately **$0.3 million**, and purchase commitments for **120 automobiles** totaling approximately **$1.2 million**[39](index=39&type=chunk) - Management plans to seek equity financing, debt from PRC banks, and related party support, though success is not assured[40](index=40&type=chunk)[41](index=41&type=chunk) [Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=Note%203.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details significant accounting policies, including foreign currency translation, fair value measurements, revenue recognition, and lease accounting - Financial statements are prepared under **U.S. GAAP**, with the U.S. dollar as reporting currency and Chinese Renminbi (RMB) as functional currency for PRC operations[42](index=42&type=chunk)[44](index=44&type=chunk) - Derivative liabilities, primarily warrants, are measured at fair value using the Black-Scholes model, decreasing from **$501,782** at March 31, 2023, to **$137,943** at September 30, 2023[51](index=51&type=chunk)[52](index=52&type=chunk) - Revenue is recognized under **ASC 606**, disaggregated into Automobile Transaction and Related Services and Online Ride-hailing Platform Services, with ride-hailing revenue recognized on a net basis[77](index=77&type=chunk)[79](index=79&type=chunk)[83](index=83&type=chunk) - The company adopted the **CECL model** for credit losses on April 1, 2023, with no material financial impact[95](index=95&type=chunk) [Note 4. DISCONTINUED OPERATIONS](index=22&type=section&id=Note%204.%20DISCONTINUED%20OPERATIONS) The company discontinued its online P2P lending services in October 2019 due to regulatory changes, with remaining liabilities of $459,186 - The company discontinued its online **P2P lending services** business on October 17, 2019, due to regulatory tightening in China[100](index=100&type=chunk) Liabilities from Discontinued Operations | Liability Class | Sep 30, 2023 (Unaudited) | Mar 31, 2023 | | :--- | :--- | :--- | | Accrued expenses and other liabilities | $459,186 | $487,829 | [Note 17. RELATED PARTY TRANSACTIONS AND BALANCES](index=31&type=section&id=Note%2017.%20RELATED%20PARTY%20TRANSACTIONS%20AND%20BALANCES) This note details transactions and balances with related parties, primarily Jinkailong, including intercompany balances and lease agreements - As of September 30, 2023, the net balance due from related parties was **$4.27 million**, primarily from Jinkailong, the company's equity investee[162](index=162&type=chunk) - An allowance for credit losses of **$680,396** was recorded against the balance due from Jinkailong for the six months ended September 30, 2023[164](index=164&type=chunk) - Operating lease agreements with related parties resulted in rental expenses of **$80,901** for the six months ended September 30, 2023[167](index=167&type=chunk)[169](index=169&type=chunk) - For the six months ended September 30, 2023, the company generated **$22,147** in revenue from leasing automobiles to Jinkailong and incurred **$392,344** in rental costs from leasing automobiles from Jinkailong[171](index=171&type=chunk) [Note 19. COMMITMENTS AND CONTINGENCIES](index=35&type=section&id=Note%2019.%20COMMITMENTS%20AND%20CONTINGENCIES) The company has significant purchase commitments for automobiles and contingent liabilities from loan guarantees and its equity investee - The company has purchase commitments for **120 automobiles** totaling approximately **$1.2 million**, expected by December 31, 2023[184](index=184&type=chunk) - The company faces credit risk from guaranteeing lease/loan payments for automobile purchasers, with no contingent liabilities for its own purchasers as of September 30, 2023[181](index=181&type=chunk)[185](index=185&type=chunk) - Jinkailong, an equity investee, has maximum contingent liabilities of approximately **$3.1 million**, with Senmiao's exposure capped at approximately **$480,000**[186](index=186&type=chunk)[187](index=187&type=chunk) [Note 20. SEGMENT INFORMATION](index=39&type=section&id=Note%2020.%20SEGMENT%20INFORMATION) The company operates in two segments: Automobile Transaction and Online Ride-hailing Platform Services, with most assets and revenue in the PRC Segment Performance for the Six Months Ended September 30, 2023 (Unaudited) | Segment | Revenues (USD) | Loss from Operations (USD) | | :--- | :--- | :--- | | Automobile Transaction and Related Services | 2,372,246 | (1,182,242) | | Online Ride-hailing Platform Services | 1,549,419 | (196,928) | | Unallocated | — | (691,197) | | **Consolidated Total** | **3,921,665** | **(2,070,367)** | - As of September 30, 2023, total assets were allocated as follows: **$10.86 million** to the automobile segment, **$0.90 million** to the ride-hailing segment, and **$0.90 million** unallocated[197](index=197&type=chunk) [Note 21. SUBSEQUENT EVENTS](index=40&type=section&id=Note%2021.%20SUBSEQUENT%20EVENTS) Subsequent events include a lawsuit settlement of $76,000 and the issuance of 1.5 million common shares for consulting services - On November 3, 2023, the company settled a lawsuit, agreeing to pay approximately **$76,000**[199](index=199&type=chunk) - In October 2023, the company agreed to issue **1,500,000 shares** of common stock for M&A, market research, and financial advisory services, issued on November 7, 2023[200](index=200&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, liquidity, and critical accounting policies for its two business segments - The company operates two core businesses: **Automobile Transaction and Related Services** and an **Online Ride-hailing Platform (Xixingtianxia)**[202](index=202&type=chunk)[203](index=203&type=chunk) - The online ride-hailing platform, Xixingtianxia, operates in **27 cities** and collaborates with major aggregation platforms[208](index=208&type=chunk) - Key operational risks include intense competition, regulatory compliance, managing vehicle defaults, and the adverse impacts of the COVID-19 pandemic[214](index=214&type=chunk)[220](index=220&type=chunk)[231](index=231&type=chunk) [Results of Operations](index=51&type=section&id=Results%20of%20Operations) This section analyzes financial performance, noting revenue decreases in ride-hailing due to competition, partially offset by automobile leasing growth Comparison of Results for the Three Months Ended September 30 | Metric | 2023 (USD) | 2022 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | **Revenues** | 1,826,951 | 2,241,202 | (414,251) | | **Gross Profit** | 374,111 | 308,818 | 65,293 | | **Loss from Operations** | (1,281,945) | (1,585,206) | 303,261 | | **Net Loss** | (1,207,452) | (1,179,804) | (27,648) | Comparison of Results for the Six Months Ended September 30 | Metric | 2023 (USD) | 2022 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | **Revenues** | 3,921,665 | 4,582,998 | (661,333) | | **Gross Profit** | 956,051 | 768,798 | 187,253 | | **Loss from Operations** | (2,070,367) | (3,025,801) | 955,434 | | **Net Loss** | (1,628,799) | (935,884) | (692,915) | - Revenue from online ride-hailing platform services decreased to **$643,813** from **$972,703** year-over-year for the three-month period, primarily due to increased competition[253](index=253&type=chunk) - Gross profit margin for the six-month period increased to **24.4%** from **16.8%** year-over-year, driven by profitability in the automobile operating leasing business[283](index=283&type=chunk) [Liquidity and Going Concern](index=62&type=section&id=Liquidity%20and%20Going%20Concern) The company faces liquidity challenges and going concern doubts due to net losses, a working capital deficit, and significant purchase commitments - Cash and cash equivalents were **$1,305,199** as of September 30, 2023, a decrease from **$1,610,090** at March 31, 2023[294](index=294&type=chunk) - Substantial doubt about going concern exists due to net losses, a working capital deficit of approximately **$0.3 million**, and purchase commitments of approximately **$1.2 million**[295](index=295&type=chunk) Cash Flow Summary for the Six Months Ended September 30 | Cash Flow Activity | 2023 (USD) | 2022 (USD) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 88,129 | 512,205 | | Net Cash (Used in)/Provided by Investing Activities | (276,658) | 414,261 | | Net Cash (Used in)/Provided by Financing Activities | (22,926) | 32,075 | [Off-Balance Sheet Arrangements](index=64&type=section&id=Off-Balance%20Sheet%20Arrangements) The company has off-balance sheet arrangements including purchase commitments for automobiles and contingent liabilities from loan guarantees - The company has outstanding purchase commitments for **120 automobiles** totaling approximately **$1.8 million**, expected by December 31, 2023[303](index=303&type=chunk) - The company has contingent liabilities from guaranteeing loans for automobile purchasers and is exposed to a maximum of approximately **$480,000** of liabilities from its **35% equity interest** in Jinkailong[304](index=304&type=chunk) [Critical Accounting Policies and Estimates](index=64&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines critical accounting policies and estimates, including fair value measurements, revenue recognition, credit losses, and asset impairment - Critical accounting policies involve significant judgments and estimates[305](index=305&type=chunk) - Key areas of estimation include fair value of derivative liabilities, revenue recognition for leases, allowances for credit losses, lease accounting, and impairment of long-lived assets[308](index=308&type=chunk)[309](index=309&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk)[317](index=317&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - This section is not applicable for the company[319](index=319&type=chunk) [Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to material weaknesses in accounting staff, internal audit, and IT controls - The CEO and CFO concluded that disclosure controls and procedures were **not effective** as of September 30, 2023[319](index=319&type=chunk) - Identified material weaknesses include insufficient U.S. GAAP expertise, inadequate internal audit function, and deficiencies in IT general controls[319](index=319&type=chunk) - Remediation plans involve hiring qualified accounting staff, improving internal audit, and enhancing system security[320](index=320&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter[321](index=321&type=chunk) [PART II - OTHER INFORMATION](index=68&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part includes exhibits filed with the report and the official signatures [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL documents - Filed exhibits include **CEO and CFO certifications** under Sarbanes-Oxley Sections 302 and 906[323](index=323&type=chunk) - Various **Inline XBRL documents** are included for financial data tagging[323](index=323&type=chunk) [Signatures](index=69&type=section&id=SIGNATURES) The report is signed by the Chief Executive Officer and Chief Financial Officer on November 14, 2023 - The report was signed on **November 14, 2023**[325](index=325&type=chunk) - Signatories are **Xi Wen (CEO)** and **Xiaoyuan Zhang (CFO)**[326](index=326&type=chunk)

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Unaudited Q2 2023 financials show a **$0.42 million net loss**, **$13.5 million total assets**, and going concern doubts [Financial Statements Overview](index=4&type=section&id=Financial%20Statements%20Overview) Q2 2023 financials show a **$421,347 net loss**, total assets of **$13.5 million**, and a **$436,295 net cash outflow** Condensed Consolidated Balance Sheet Data (Unaudited) | Balance Sheet Items | June 30, 2023 ($) | March 31, 2023 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 4,794,779 | 4,854,786 | | **Total Assets** | 13,540,348 | 14,238,615 | | **Total Current Liabilities** | 5,263,360 | 5,184,823 | | **Total Liabilities** | 5,917,954 | 5,741,549 | | **Total Equity** | 7,379,947 | 8,227,680 | Condensed Consolidated Statements of Operations (Unaudited) | Income Statement Items | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | **Total Revenues** | 2,094,714 | 2,341,796 | | **Gross Profit** | 581,940 | 459,980 | | **Loss from Operations** | (788,422) | (1,440,595) | | **Net Income (Loss)** | (421,347) | 243,920 | | **Net Earnings (Loss) Per Share** | (0.05) | 0.05 | Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Items | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | 204,866 | 514,139 | | **Net Cash Provided by (Used in) Investing Activities** | (330,066) | 24,332 | | **Net Cash Provided by (Used in) Financing Activities** | (247,322) | 171,073 | | **Net (Decrease) in Cash and Cash Equivalents** | (436,295) | 669,117 | | **Cash and Cash Equivalents, End of Period** | 1,173,795 | 1,854,338 | [Note 1. Organization and Principal Activities](index=8&type=section&id=Note%201.%20Organization%20and%20Principal%20Activities) The company operates two segments in China: automobile services for ride-hailing and its Xixingtianxia platform - The company's business is divided into two segments: **Automobile transaction and related services** focusing on the online ride-hailing industry in China, and **Online ride-hailing platform services** operating its own platform, Xixingtianxia[25](index=25&type=chunk)[26](index=26&type=chunk) - On March 31, 2022, the company deconsolidated Jinkailong, its former VIE, and now accounts for it as a **35% equity investee company** through its subsidiary Hunan Ruixi[38](index=38&type=chunk)[39](index=39&type=chunk) [Note 2. Going Concern](index=11&type=section&id=Note%202.%20Going%20Concern) Substantial doubt about going concern stems from a **$0.4M net loss**, **$38.1M accumulated deficit**, and **$1.2M purchase commitments** - Factors contributing to substantial doubt about the company's ability to continue as a going concern include a **net loss of approximately $0.4 million** for the quarter, an **accumulated deficit of approximately $38.1 million**, a **working capital deficit of approximately $0.5 million**, and **purchase commitments totaling approximately $1.2 million**[43](index=43&type=chunk) - Management is attempting to mitigate going concern risk through equity financing, debt financing, and related-party financial support, though success is not assured[44](index=44&type=chunk)[45](index=45&type=chunk) [Note 20. Segment Information](index=45&type=section&id=Note%2020.%20Segment%20Information) The company reports two segments, Automobile Services and Online Ride-hailing, both incurring operational losses in Q2 2023 Segment Performance for Three Months Ended June 30, 2023 | Segment | Revenues ($) | Loss from Operations ($) | | :--- | :--- | :--- | | Automobile Transaction and Related Services | 1,189,108 | (334,966) | | Online Ride-hailing Platform Services | 905,606 | (72,632) | | Unallocated | — | (380,824) | | **Consolidated Total** | **2,094,714** | **(788,422)** | Segment Performance for Three Months Ended June 30, 2022 | Segment | Revenues ($) | Loss from Operations ($) | | :--- | :--- | :--- | | Automobile Transaction and Related Services | 1,154,276 | (291,788) | | Online Ride-hailing Platform Services | 1,187,520 | (517,352) | | Unallocated | — | (631,455) | | **Consolidated Total** | **2,341,796** | **(1,440,595)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A reports an **11% revenue decrease** to **$2.1M**, a **$421K net loss**, and reiterates going concern doubts [Business Overview](index=47&type=section&id=Business%20Overview) Core operations include automobile services (**$1.19M revenue**) and Xixingtianxia ride-hailing platform (**$0.9M revenue**) Automobile Services Breakdown (Q1 2023 vs Q1 2022) | Service Type | Vehicles (2023) | Revenue (2023) | Vehicles (2022) | Revenue (2022) | | :--- | :--- | :--- | :--- | :--- | | Auto Operating Leasing | >1,000 | $1,056,000 | >1,100 | $853,000 | | Auto Sales | 1 | $5,000 | 13 | $70,000 | | Auto Financing | 148 | $14,000 | 136 | $11,000 | | Other Services | >530 | $114,000 | >770 | $221,000 | - For the three months ended June 30, 2023, the Xixingtianxia ride-hailing platform completed approximately **1.7 million rides** with a **gross fare of $5.3 million**, generating about **$0.9 million** in platform service fees[220](index=220&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Q2 2023 revenues decreased **11% to $2.1M**, gross profit rose to **$582K**, resulting in a **$421K net loss** Comparison of Operations (Three Months Ended June 30) | Metric | 2023 ($) | 2022 ($) | Change ($) | | :--- | :--- | :--- | :--- | | **Revenues** | 2,094,714 | 2,341,796 | (247,082) | | **Gross Profit** | 581,940 | 459,980 | 121,960 | | **Loss from Operations** | (788,422) | (1,440,595) | 652,173 | | **Change in fair value of derivative liabilities** | 304,173 | 1,628,510 | (1,324,337) | | **Net Income (Loss)** | (421,347) | 243,920 | (665,267) | - The overall gross profit margin increased to **27.8% in Q1 2023** from **19.6% in Q1 2022**, primarily due to the operating leasing business shifting from a gross loss to a **12.4% gross profit margin**[273](index=273&type=chunk) - Selling, general and administrative expenses decreased by **$676,058 (35.2%) year-over-year**, mainly due to reduced salary expenses from a lower employee headcount, decreased office expenditures, and lower advertising costs[274](index=274&type=chunk) [Liquidity and Going Concern](index=62&type=section&id=Liquidity%20and%20Going%20Concern) Liquidity is precarious with cash at **$1.17M**, and substantial doubt about going concern persists due to losses and commitments - The company's ability to continue as a going concern is in substantial doubt due to a **net loss of ~$0.4M** for the quarter, an **accumulated deficit of ~$38.1M**, a **working capital deficit of ~$0.5M**, and **purchase commitments of ~$1.2M** for 120 automobiles[285](index=285&type=chunk) Cash Flow Summary (Three Months Ended June 30) | Cash Flow Activity | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 204,866 | 514,139 | | Net Cash from (Used in) Investing Activities | (330,066) | 24,332 | | Net Cash from (Used in) Financing Activities | (247,322) | 171,073 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is deemed not applicable by the company for the current report - The company states this item is 'Not applicable'[314](index=314&type=chunk) [Item 4. Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of June 30, 2023, due to material weaknesses in U.S. GAAP expertise and IT controls - Disclosure controls and procedures were concluded to be **ineffective** as of June 30, 2023[315](index=315&type=chunk) - Identified material weaknesses include insufficient personnel with adequate U.S. GAAP accounting knowledge, lack of an adequate internal audit function, and deficiencies in IT general controls related to security, change management, and operations[315](index=315&type=chunk) [PART II – OTHER INFORMATION](index=69&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 6. Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including SOX certifications and XBRL interactive data files - The report includes required certifications from the CEO and CFO under **Sarbanes-Oxley Act Sections 302 and 906**[319](index=319&type=chunk) - Interactive data files (XBRL documents) are also filed as exhibits[319](index=319&type=chunk)