Senmiao Technology(AIHS) - 2026 Q1 - Quarterly Report

Cover Page and Company Information This section provides fundamental details about Senmiao Technology Limited, a Nevada-registered company headquartered in Chengdu, China, whose common stock trades on Nasdaq under the ticker AIHS Company Information This section provides fundamental details about Senmiao Technology Limited, a Nevada-registered company headquartered in Chengdu, China, whose common stock trades on Nasdaq under the ticker AIHS - Report type: Quarterly Report (Form 10-Q) for the quarter ended June 30, 2025[1] - Company name: Senmiao Technology Limited[2] Company Securities Information | Security Class | Trading Symbol | Listing Exchange | | :--- | :--- | :--- | | Common Stock, par value $0.0001 | AIHS | Nasdaq Stock Market | - As of August 8, 2025, the company had 1,108,312 shares of common stock issued and outstanding[6] Cautionary Note Regarding Forward-Looking Statements This section outlines the forward-looking statements within the report, which are based on management's current expectations and subject to risks and uncertainties that may cause actual results to differ materially Forward-Looking Statements This section clarifies that the report contains forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ significantly from expectations - Forward-looking statements cover company objectives, strategies, business growth, financial expectations, and projections for China's ride-hailing and auto finance industries[10][14] - Actual results may differ significantly due to factors including changes in Chinese regulations, public health impacts, market competition, macroeconomic conditions, and government policies[11][14] - Statistical data and estimates from industry publications and third-party reports, though not independently verified, are considered reliable but involve assumptions and uncertainties[13] PART I – FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Unaudited Condensed Consolidated Financial Statements This section provides Senmiao Technology's unaudited condensed consolidated financial statements for the period ended June 30, 2025, showing a decrease in total assets and liabilities, and a narrowed net loss Unaudited Condensed Consolidated Balance Sheets As of June 30, 2025, total assets decreased to $5.31 million from $5.80 million, total liabilities decreased to $4.81 million from $5.22 million, and total shareholders' equity increased to $0.45 million from $0.35 million Consolidated Balance Sheet Key Items (USD) | Item | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 867,767 | 833,577 | | Total current assets | 2,291,298 | 2,238,762 | | Total assets | 5,305,627 | 5,800,792 | | Liabilities and Equity | | | | Total current liabilities | 4,783,613 | 5,218,172 | | Total liabilities | 4,814,209 | 5,218,172 | | Total shareholders' equity | 448,475 | 348,256 | | Total liabilities, mezzanine equity and equity | 5,305,627 | 5,800,792 | Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss For the three months ended June 30, 2025, total revenue was $0.86 million, slightly down from $0.88 million last year, while net loss significantly narrowed to $0.28 million from $0.76 million Operating Performance Comparison (Three Months Ended June 30) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Total revenue | $860,099 | $879,009 | | Gross profit | $196,955 | $252,970 | | Operating loss | ($611,290) | ($773,969) | | Net loss from continuing operations | ($276,438) | ($735,885) | | Net loss | ($276,438) | ($762,818) | | Net loss attributable to company shareholders | ($164,397) | ($673,420) | | Loss per share (basic and diluted) | ($0.15) | ($0.64) | Unaudited Condensed Consolidated Statements of Changes in Equity Total equity increased from $0.35 million at the beginning of the period to $0.45 million at the end, primarily due to warrant exercises and preferred stock conversions, partially offset by net loss - Beginning total equity was $348,256, increasing to $448,475 at period-end[23] - Equity changes include: net loss of $276,438, increase from warrant exercises of $226,000, and increase from preferred stock conversion of $191,421[23] Unaudited Condensed Consolidated Statements of Cash Flows For the three months ended June 30, net cash used in operating activities was $0.32 million, while financing activities provided $0.38 million, resulting in an ending cash balance of $0.87 million Cash Flow Summary (Three Months Ended June 30) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Net cash from operating activities | ($321,155) | $16,762 | | Net cash from investing activities | ($385) | $7,250 | | Net cash from financing activities | $377,471 | ($53,707) | | Net increase (decrease) in cash | $34,190 | ($43,179) | | Cash and cash equivalents at end of period | $867,767 | $751,457 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail the company's structure, going concern issues, accounting policies, discontinued operations, equity, related party transactions, and subsequent events, including a 1-for-10 reverse stock split in July 2025 - Company operations focus on auto transactions and related services in China, primarily for the ride-hailing industry[27] - The company completed the disposition of its ride-hailing platform XXTX on August 20, 2024, and now operates with a single segment[29] - Management has identified substantial doubt about the company's ability to continue as a going concern due to recurring net losses, accumulated deficit, and working capital deficit[37][38] - The company implemented a 1-for-10 reverse stock split on July 29, 2025, with all share and per-share data retroactively adjusted[175] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses the company's business, financial condition, and results, focusing on auto transaction services, the discontinued ride-hailing platform, and ongoing liquidity challenges Overview and Business Segments The company primarily offers auto transaction and related services, having discontinued its ride-hailing platform (Xixingtianxia) on August 20, 2024, which is now reported as a discontinued operation - Core business involves auto transactions and related services, primarily serving ride-hailing drivers in China[177] - The company sold and discontinued its ride-hailing platform business (XXTX) on August 20, 2024[178][183] - As of June 30, 2025, the company facilitated financing for 312 vehicles, sold 1,516 vehicles, and delivered 2,185 operating lease vehicles and 192 finance lease vehicles[180] Key Factors and Risks Affecting Results of Operations Operating results are influenced by factors such as attracting lessees, managing auto leases, pricing, partner relationships, receivables collection, default risk, market competition, and Chinese ride-hailing regulations - Key factors include: expanding the lessee base, effective management of leased vehicles (Q1 2025 utilization rate approximately 88.0%), service pricing, maintaining partner relationships, timely collections, and effective competition[184][185][186][187][193] - Competition in China's ride-hailing market has intensified, with saturation warnings issued in several cities[195] - Significant regulatory risks exist, as approximately 39% of leased drivers lacked ride-hailing driver permits as of June 30, 2025, potentially leading to fines or service suspension[198] Results of Operations For the three months ended June 30, total revenue from continuing operations slightly decreased to $0.86 million from $0.88 million, but net loss significantly narrowed to $0.28 million from $0.74 million due to reduced expenses and non-operating gains Continuing Operations Performance Comparison (Three Months Ended June 30) | Item | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $860,099 | $879,009 | ($18,910) | | Gross profit | $196,955 | $252,970 | ($56,015) | | Operating loss | ($611,290) | ($773,969) | $162,679 | | Net loss from continuing operations | ($276,438) | ($735,885) | $459,447 | - Revenue decline primarily attributed to lower average monthly rental fees in the auto leasing business, with operating lease revenue decreasing from $0.76 million to $0.70 million[202][203] - Selling, general, and administrative expenses decreased by 5.3%, mainly due to lower compensation and benefits from reduced headcount[212] - Other income of $0.26 million was recorded, primarily from a $0.25 million gain on the disposal of subsidiary Corenel[214] - A $0.08 million gain from fair value changes in derivative liabilities was recorded, compared to an $0.01 million loss in the prior year, significantly contributing to the improved net loss[217] Liquidity and Going Concern The company faces severe liquidity issues and substantial doubt about its ability to continue as a going concern, with a $2.5 million working capital deficit and $45.3 million accumulated deficit as of June 30, 2025 - The company has substantial doubt about its ability to continue as a going concern, primarily due to: Q1 2025 net loss of approximately $0.3 million, accumulated deficit of approximately $45.3 million, and a working capital deficit of approximately $2.5 million[231] - Management is actively seeking equity financing, bank loans, and related party financial support to mitigate going concern risks[232][235] Cash Flow Summary (Three Months Ended June 30) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | ($321,155) | $16,762 | | Net cash from investing activities | ($385) | $7,250 | | Net cash from financing activities | $377,471 | ($53,707) | Critical Accounting Estimates The financial statements rely on critical accounting estimates involving significant judgment and uncertainty, including fair value measurement of financial instruments, credit loss provisions, and impairment assessments of long-lived assets - Critical accounting estimates include: fair value of derivative liabilities, allowance for credit losses on accounts receivable, and impairment of long-lived assets[245] - Fair value of derivative liabilities is estimated using the Black-Scholes model[246] - Allowance for credit losses is estimated based on analysis of aging, collectibility, economic conditions, and customer-specific circumstances; as of June 30, 2025, a $5.23 million allowance was recorded for related party receivables[247][249] Item 3. Quantitative and Qualitative Disclosures About Market Risk This item is marked as "Not Applicable," indicating the company, as a smaller reporting company, is not required to provide this disclosure or deems its market risk exposure immaterial - The company has not provided quantitative and qualitative disclosures about market risk in this report, marked as "Not Applicable"[251] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses in internal control over financial reporting, including insufficient US GAAP accounting personnel and IT general control deficiencies - The company's CEO and CFO concluded that disclosure controls and procedures were ineffective as of June 30, 2025[252] - Internal control over financial reporting had three material weaknesses: 1. Lack of sufficient US GAAP accounting professionals. 2. Inadequate internal audit function policies and procedures. 3. Deficiencies in IT general controls (e.g., logical access security, change management)[254] - No significant changes in internal control over financial reporting occurred during the quarter that materially affected or are reasonably likely to materially affect internal control[253] PART II – OTHER INFORMATION This section contains additional information not covered in Part I, including exhibits and required certifications Item 6. Exhibits This section lists exhibits filed with the 10-Q report, primarily including CEO and CFO certifications required by Sarbanes-Oxley Sections 302 and 906, and XBRL-related files for interactive data submission - The exhibit list includes CEO and CFO certifications signed under Sarbanes-Oxley Act Sections 302 and 906[256] - It also includes a series of XBRL (eXtensible Business Reporting Language) files for SEC electronic reporting[256] SIGNATURES This report was formally signed by CEO Xi Wen and CFO Xiaoyuan Zhang on August 19, 2025, confirming its authenticity and completeness - The report was signed by Chief Executive Officer Xi Wen and Chief Financial Officer Xiaoyuan Zhang[259] - The signing date was August 19, 2025[259]