Senmiao Technology(AIHS) - 2024 Q3 - Quarterly Report

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]