Senmiao Technology Ltd
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
VAI$2.19+30.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001213900-24-069107
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001213900-24-098379
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 127 previous paragraphs and 171 current paragraphs.
46 unchanged; 60 reworded; 46 added; 21 removed; 0 previous and 19 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (46)
Current report
Our Discontinued Online Ride-Hailing Platform Services
Current report
Due the fierce competition of the online ride-hailing industry, XXTX had been suffered loss. Since December 2023, XXTX had engaged Anhui Lianma Technology Co., Ltd. (“Anhui Lianma”), a third-party to co-operate the online ride-hailing platform by outsourcing certain daily operation work to Anhui Lianma in most of cities it operates platform in XXTX and Anhui Lianma will jointly share the operational profits, with the specific calculation method being defined in the cooperation agreement. However, considering the changes in online ride-hailing industry and development plan of the Company, on August 8, 2024, we entered into an acquisition agreement with debt assumption takeover (“Acquisition Agreement”) with a third party named Jiangsu Yuelaiyuexing Technology Co., Ltd. (“Yuelai”), and certain other parties thereto. Pursuant to the Acquisition Agreement, Yuelai acquired all of the equity interests the XXTX at a total purchase price of zero, while taking over certain liabilities of XXTX as defined in the Acquisition Agreement. On August 20, 2024, the acquisition was completed and we ceased the online ride-hailing platform services.
Current report
Ability to Manage Defaults Effectively
Current report
Service fees from automobile purchase services and Sales of automobiles
Current report
For the three months ended September 30, 2024, we had other income, net of $388,405, which primarily consist of (1) a gain of $397,775 from deconsolidation of XXTX; (2) penalty income of approximately $28,000 from the customers; (3) income of approximately $3,000 from the disposal of our own vehicles used for operating leases; partially offset by (4) the expense of approximately $20,000 from the termination of our right-of-use assets for an exhibition hall we leased in Changsha; and (5) the miscellaneous expense of approximately $20,000.
Current report
Interest Expense on Finance Leases
Current report
Income Tax Expense
Current report
Net loss from continuing operations
Current report
Results of Continuing Operations for the six months ended September 30, 2024 Compared to the six months ended September 30, 2023
Current report
Monthly services commissions
Current report
Financing revenues
Current report
Service fees from NEVs leasing
Current report
We had no income from sales of automobiles during the six months ended September 30, 2024. Meanwhile, we sold two used automobiles with income of $8,822 during the six months ended September 30, 2023.
Current report
Other Service fees
Current report
Gross Profit
Current report
We had gross profit of $349,869 and $453,313, respectively, during the six months ended September 30, 2024 and 2023. The decrease of $103,444 was mainly due to the decrease in profit from Auto Operating Leasing. The following table sets forth the breakdown of gross profit (loss) by major revenue source for the six months ended September 30, 2024 and 2023:
Current report
We had a gross profit of $65,713 in our Auto Operating Leasing during the six months ended September 30, 2024, which decreased by $103,280 from a gross profit of $168,993 in the six months ended September 30, 2023. The decrease was mainly attributable to the decrease in the number of the automobiles leased for operating lease from approximately 1,200 for the six months ended September 30, 2023 to approximately 600 for the six months ended September 30, 2024, respectively. However, our overall gross profit margin of slightly increased to approximately 21.5% during the six months ended September 30, 2024 from approximately 19.1% during the six months ended September 30, 2023 due the proportion of the revenues from other services increased.
Current report
Other income, net
Current report
For the six months ended September 30, 2024, we had other income, net of $439,864, which primarily consist of the (1) a gain of $397,775 from deconsolidation of XXTX; (2) penalty income of approximately $60,000 from the customers; (3) income of approximately $6,000 from the disposal of our own vehicles used for operating leases; partially offset by (4) the expense of approximately $20,000 from the termination of our right-of-use assets for an exhibition hall we leased in Changsha, and (5) the miscellaneous expense of approximately $4,000.
Current report
For the six months ended September 30, 2023, we had other income, net of $115,803, which primarily consist of (1) the income of approximately $27,000 from the disposal of our right-of-use assets and our own vehicles used for operating leases; (2) penalty income of approximately $52,000 from the customers; and (3) the miscellaneous income of approximately $37,000.
Current report
Interest expense for the six months ended September 30, 2023 resulted from Corenel’s borrowings from a financial institution for its automobile commercial insurance by installment.
Current report
Income Tax Expense
Current report
Net loss from continuing operations
Current report
As a result of the foregoing, net loss from continuing operations for the six months ended September 30, 2024 was $974,624, representing a decrease of $477,290 from net loss of $1,451,914 for the six months ended September 30, 2023.
Current report
Results of Discontinued Operations for the three and six months ended September 30, 2024 Compared to the three and six months ended September 30, 2023
Current report
The results of discontinued operations mainly consist of the financial figures of our former subsidiary, XXTX. As of August 20, 2024, we deconsolidated XXTX and its business result was included in our online ride-hailing platform services before we deconsolidated its financial figures.
Current report
During the three months ended September 30, 2023, approximately 1.2 million rides with gross fare of approximately $3.8 million were completed through Xixingtianxia platform and an average of over 4,900 Active Drivers each month. XXTX earned online ride-hailing platform service fees of $643,813, after netting off approximately $0.2 million incentives paid to Active Drivers.
Current report
During the six months ended September 30, 2024, approximately 0.6 million rides with gross fare of approximately $1.8 million were completed through our Xixingtianxia platform and an average of over 2,100 Active Drivers each month. XXTX earned online ride-hailing platform service fees of $344,241, after netting off approximately $32,000 incentives paid to Active Drivers.
Current report
During the six months ended September 30, 2023, approximately 2.9 million rides with gross fare of approximately $9.0 million were completed through our Xixingtianxia platform and an average of over 5,500 Active Drivers each month. XXTX earned online ride-hailing platform service fees of $1,549,419, after netting off approximately $0.2 million incentives paid to Active Drivers for the six months ended September 30, 2023.
Current report
Selling, general and administrative expenses from discontinued operations primarily consisted of $29,081 in salary and employee benefits and other miscellaneous expenses in the three months ended September 30, 2024. While it primarily consisted of (1) $133,612 in salary and employee benefits; (2) $139,412 in entertainment, advertising and promotion and (3) other miscellaneous expenses in the three months ended September 30, 2023.
Current report
Selling, general and administrative expenses from discontinued operations primarily consisted of (1) $64,859 in salary and employee benefits; (2) $32,187 in entertainment, advertising and promotion; and (3) other miscellaneous expenses in the six months ended September 30, 2024. While it primarily consisted of (1) $276,285 in salary and employee benefits; (2) $289,826 in entertainment, advertising and promotion and (3) other miscellaneous expenses in the six months ended September 30, 2023.
Current report
For the three and six months ended September 30, 2024, XXTX provided provision for credit losses of $173,278 against receivables from a prepaid software development fee and a deposit due to the termination on the development which resulting from the discontinuing of the business.
Current report
Other income (expense), net
Current report
For the three and six months ended September 30, 2024, XXTX had other income, net of $37,017 and $33,214, respectively, which primarily due to the miscellaneous income in its daily operations.
Current report
For the three and six months ended September 30, 2023, XXTX had other expense, net of $13,128 and $19,000, respectively, which primarily due to the miscellaneous expense in its daily operations.
Current report
Interest Expense
Current report
Interest expense for the three and six months ended September 30, 2024 from discontinued operations was $2,512 and $8,372, respectively, which resulted from the borrowings of XXTX from a financial institution for its working capital turnover.
Current report
For three and six months ended September 30, 2024, XXTX had deferred tax benefit of $2,575 and $4,510, respectively, resulted from deferred tax, while all the subsidiaries of XXTX suffered losses for the three and six months ended September 30, 2024 and 2023.
Current report
Net loss from discontinued operations
Current report
As a result of the foregoing, the net loss from discontinued operations for the three and six months ended September 30, 2024 was $186,714 and $213,647, respectively. While the net loss from discontinued operations for the three and six months ended September 30, 2023 was $125,051 and $176,885, respectively.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Removed paragraphs (21)
Previous report
Our Ride-Hailing Platform Services
Previous report
As part of our goal to provide an all-round solution for online ride-hailing drivers as well as to increase our competitive power in an increasingly competitive online ride-hailing industry and to take advantage of the market potential, in October 2020, we began operating our own online ride-hailing platform in Chengdu. The platform (called Xixingtianxia) was owned and operated by XXTX, of which Senmiao Consulting acquired the 100% equity interest pursuant to a series of investment and supplementary agreements. As of the filing date of this Report, Senmiao Consulting has made accumulated capital contribution of RMB40.3 million (approximately $5.55 million) to XXTX.
Previous report
During the three months ended June 30, 2023, approximately 1.7 million rides with gross fare of approximately $5.3 million were completed through Xixingtianxia and the platform had an average of over 6,200 Active Drivers each month. During the three months ended June 30, 2023, we earned online ride-hailing platform service fees of approximately $0.9 million, netting off approximately $0.1 million incentives paid to Active Drivers.
Previous report
Ability to Manage Defaults and Potential Guarantee Liability Effectively
Previous report
Ability to Cut down the Loss from Ride-Hailing Platform Services
Previous report
The growth of our online ride-hailing platform depends in part on our ability to cost-effectively attract and retain online ride-hailing drivers who satisfy our screening criteria and procedures, and to increase their utilization of our platform. However, to attract and retain qualified drivers, we have, among other things, offered incentives for drivers, which would adversely affecting the liquidity and financial performance. Our Ride-Hailing Platform Services has suffered accumulated loss during the past years. Due to the fierce competition of online ride-hailing industry in Chengdu and Changsha, and in order to improve the efficiency of the daily operation and profitability of our platform, we have engaged Anhui Lianma to co-operate the online ride-hailing platform by outsourcing certain daily operation work to it in most of cities our platform operates in Since December 2023. We also reduced the incentives paid to the drivers and had witnessed both the number of Active Drivers on our platform and the total number of the completed orders decreased accordingly. However, both the revenue and the operation loss of the Ride-Hailing Platform Services decreased.
Previous report
If we could not maintain the scale of the online ride-hailing drivers who use our platform which may cause we could not generate sufficient revenue and we may have a larger cash outflow in our daily operations in the next twelve months. Our cash flow situation may worsen if the economy in China does not improve as expected.
Previous report
Meanwhile, pursuant to the cooperation agreement signed with Didi Chuxing Technology Co., Ltd. (“Didi”) for our Automobile Transaction and Related Services, we may be penalized by Didi, or our partnership with Didi may be terminated as we now operate a business competitive with Didi. However, the service fees we earned from Didi for automobile transaction and related services currently represent less than 0.1% of our total revenue. Therefore, we believe that the risk of termination of cooperation with Didi on automobile transaction and related services will not have a material influence on our business or results of operations.
Previous report
In order to manage the rapidly growing ride-hailing service market and control relevant risks, on July 27, 2016, seven ministries and commissions in China, including the MOT, jointly promulgated the “Interim Measures for the Administration of Online Taxi Booking Business Operations and Services” (“Interim Measures”) and amended it on December 28, 2019 and November 30, 2022, which legalizes online ride-hailing services such as XXTX and requires the online ride-hailing services to meet the requirements set out by the measures and obtain taxi-booking service licenses and take full responsibility of the ride services to ensure the safety of riders.
Previous report
On July 23, 2018, the General Office of Changsha Municipal People’s Government issued the “Detailed Rules for the Administration of Online Booking Taxi Management Services for Changsha.” On June 12, 2019, the Municipal Communications Commission of Changsha City further issued “Transfer and Registration Procedures of Changsha Online Booking of Taxi.” According to the regulations and guidelines, to operate a ride-hailing business in Changsha requires similar licenses in Chengdu, except those automobiles used for online ride-hailing services are required to meet certain standards, including that the sales price (including taxes) is over RMB120,000 (approximately $17,000). In practice, Hunan Ruixi is also required to employ a safety administrator for every 50 automobiles used for online ride-hailing services and submit daily operation information of these automobiles such as traffic violation to the Transport Management Office of the Municipal Communications Commission of Changsha City every month. On November 28, 2016, Guangzhou Municipal People’s Government also promulgated Interim Measures for the Management of Online Ride Hailing Operation and Service in Guangzhou, as amended on November 14, 2019.
Previous report
In addition to the national online reservation taxi operating license, XXTX and its subsidiaries also obtained the online reservation taxi operating license in 29 cities, including Chengdu, Changsha, Tianjin, six cities in Jiangsu Province, five cities in Sichuan Province, three cities in Guizhou Province, and 12 cities in other 10 provinces from June 2020 to October 2023, to operate the online ride-hailing platform services.
Previous report
We are in the process of assisting the drivers to obtain the required certificate and license both for our Automobile Transaction and Related Services and our Online Ride-hailing Platform Services. However, there is no guarantee that all of the drivers who run their online ride-hailing business through our platform would be able to obtain all the certificates and licenses. Our business and results of operations shall be materially and adversely affected if our affiliated drivers are suspended from providing ride-hailing services or imposed substantial fines or if we are found to be in serious violation of the Interim Measures due to the drivers’ failure to obtain requite licenses and/or automobile certificates in connection with providing services through our platform.
Previous report
Revenues
Previous report
Revenue from Automobile Transactions and Related Services
Previous report
Revenue from online ride-hailing platform services
Previous report
During the three months ended June 30, 2023, approximately 1.7 million rides with gross fare of approximately $5.3 million were completed through our Xixingtianxia platform and we earned online ride-hailing platform service fees of $905,606, after netting off approximately $0.1 million incentives paid to Active Drivers. The decrease was mainly due to fewer completed orders as a result of increased competition and we have shrunk our investment in the Online Ride-hailing Platform Services.
Previous report
Cost of Revenues
Previous report
Selling, General and Administrative Expenses
Previous report
Provision for credit losses
Previous report
Net loss
Previous report
For the three months ended June 30, 2024, we had net cash provided by investing activities of $7,250. The majority of net cash provided by in investing activities was the proceeds from sales of the used-automobiles of $8,433, which was partially offset the purchase furniture for office purpose of $1,183.
Reworded paragraphs (60)
Previous wording
We are a provider of automobile transaction and related services, connecting consumers, who are mostly existing and prospective ride-hailing drivers affiliated with different operators of online ride-hailing platforms in the People’s Republic of China (“PRC” or “China”). We provide automobile transaction and related services through our wholly owned subsidiary, Chengdu Corenel Technology Limited, a PRC limited liability company (“Corenel”), and our majority owned subsidiaries, Chengdu Jiekai Technology Ltd. (“Jiekai”), and Hunan Ruixi Financial Leasing Co., Ltd. (“Hunan Ruixi”), a PRC limited liability company. Since October 2020, we also operate an online ride-hailing platform through Hunan Xixingtianxia Technology Co., Ltd. (“XXTX”), a wholly-owned subsidiary of Sichuan Senmiao Zecheng Business Consulting Co., Ltd., our wholly-owned subsidiary (“Senmiao Consulting”). Our platform enables qualified ride-hailing drivers to provide application-based transportation services mainly in Chengdu, Changsha and other 20 cities in China. Substantially all of our operations are conducted in China.
Current wording
We are a provider of automobile transaction and related services, connecting consumers, who are mostly existing and prospective ride-hailing drivers affiliated with different operators of online ride-hailing platforms in the People’s Republic of China (“PRC” or “China”). We provide automobile transaction and related services through our wholly owned subsidiary, Chengdu Corenel Technology Limited, a PRC limited liability company (“Corenel”), and our majority owned subsidiaries, Chengdu Jiekai Technology Ltd. (“Jiekai”), and Hunan Ruixi Financial Leasing Co., Ltd. (“Hunan Ruixi”), a PRC limited liability company. Substantially all of our operations are conducted in China.
Previous wording
Our Automobile Transaction and Related Services are mainly comprised of (i) automobile operating lease where we provide car rental services to individual customers to meet their personal needs with lease term no more than twelve months (the “Auto Operating Leasing”); (ii) monthly services where we provide management and related services to Partner Platforms and other companies and earn commission from them (the “Auto Commissions”); (iii) automobile financing where we provide our customers with auto finance solutions through financing leases (the “Auto Financing”); (iv) service fees from new energy vehicles (“NEVs”) leasing, automobile purchase services where we charge NEVs lessees or automobile purchasers for a series of the services provided to them throughout the leasing or purchase process based on the chosen product solutions, such as ride-hailing driver training, assisting with a series of administrative procedures and other consulting services (the “NEVs and Purchase Services”); and (v) automobile sales (the “Auto Sales”) and other supporting services provided to online ride-hailing drivers, including auto management and guarantee services (the “Auto Management and Guarantee Services”). We started our facilitation and supporting services in November 2018, the sale of automobiles in January 2019, and financial and operating leasing in March 2019, respectively.
Current wording
Our Automobile Transaction and Related Services are mainly comprised of (i) automobile operating lease where we provide car rental services to individual customers to meet their personal needs with lease term no more than twelve months (the “Auto Operating Leasing”); (ii) monthly services where we provide management and related services to other online ride-hailing platforms we cooperated with (“Partner Platforms”) and other companies and earn commission from them (the “Auto Commissions”); (iii) automobile financing where we provide our customers with auto finance solutions through financing leases (the “Auto Financing”); (iv) service fees from new energy vehicles (“NEVs”) leasing, automobile purchase services where we charge NEVs lessees or automobile purchasers for a series of the services provided to them throughout the leasing or purchase process based on the chosen product solutions, such as ride-hailing driver training, assisting with a series of administrative procedures and other consulting services (the “NEVs and Purchase Services”); and (v) automobile sales (the “Auto Sales”) and other supporting services provided to online ride-hailing drivers, including auto management and other related services (the “Auto Management Services”). We started our facilitation and supporting services in November 2018, the sale of automobiles in January 2019, and financial and operating leasing in March 2019, respectively.
Previous wording
Since November 22, 2018, the acquisition date of Hunan Ruixi, and as of June 30, 2024, we have facilitated financing for an aggregate of 312 automobiles with a total value of approximately $5.3 million, sold an aggregate of 1,516 automobiles with a total value of approximately $14.5 million and delivered 1,892 automobiles under operating leases and 178 automobiles under financing leases to customers, the vast majority of whom are online ride-hailing drivers.
Current wording
Since November 22, 2018, the acquisition date of Hunan Ruixi, and as of September 30, 2024, we have facilitated financing for an aggregate of 312 automobiles with a total value of approximately $5.3 million, sold an aggregate of 1,516 automobiles with a total value of approximately $14.5 million and delivered 1,935 automobiles under operating leases and 180 automobiles under financing leases to customers, the vast majority of whom are online ride-hailing drivers.
Previous wording
The table below provides a breakdown of the number of vehicles sold or delivered under different leasing arrangements or managed/guaranteed by us and corresponding revenue generated for the three months ended June 30, 2024 and 2023:
Current wording
The table below provides a breakdown of the number of vehicles sold or delivered under different leasing arrangements or managed by us and corresponding revenue generated for the three and six months ended September 30, 2024 and 2023:
Previous wording
During the three months ended June 30, 2024, our Auto Operating Leasing, Auto Commissions, Auto Financing and other services income accounted for approximately 86.0%, 3.0%, 2.5%, and 8.5% of our total revenue from our automobile transactions and related services, respectively, while our Auto Operating Leasing, Auto Commissions, Auto Financing, Auto Sales, and other services income accounted for approximately 88.8%, 4.3%, 1.1%, 0.4% and 5.4% for the three months ended June 30, 2023, respectively.
Current wording
During the three months ended September 30, 2024, our Auto Operating Leasing, Auto Commissions, Auto Financing and other services income accounted for approximately 78.4%, 4.1%, 3.6%, and 13.9% of our total revenue from our automobile transactions and related services, respectively, while our Auto Operating Leasing, Auto Commissions, Auto Financing, and other services income accounted for approximately 86.3%, 5.6%, 1.0%, and 7.1% for the three months ended September 30, 2023, respectively. During the six months ended September 30, 2024, our Auto Operating Leasing, Auto Commissions, Auto Financing and other services income accounted for approximately 82.5%, 3.5%, 3.0%, and 11.0% of our total revenue from our automobile transactions and related services, respectively, while our Auto Operating Leasing, Auto Commissions, Auto Financing, and other services income accounted for approximately 87.6%, 4.9%, 1.1%, and 6.4% for the six months ended September 30, 2023, respectively.
Previous wording
XXTX operates Xixingtianxia and holds a national online reservation taxi operating license. The platform is presently servicing online ride-hailing drivers in 22 cities in China, including Chengdu, Changsha and so on, providing the drivers in these cities with a platform to view and take customer orders for rides. We currently collaborate with Gaode Map, a well-known aggregation platform in China on our ride-hailing platform services. Under our collaboration, when a rider uses the platform to search for taxi/ride-hailing services on the aggregation platform, the platform provides such rider a number of online ride-hailing platforms for selection, including ours and if our platform is selected by the rider, the order will then be distributed to registered drivers on our platform for viewing and acceptance. The rider may also simultaneously select multiple online ride-hailing platforms in which case, the aggregation platform will distribute the requests to different online ride-hailing platforms which they cooperate with, based on the number of available drivers using the platform in a certain area and these drivers’ historical performance, among other things. XXTX generates revenue from providing services to online ride-hailing drivers to assist them in providing transportation services to the riders looking for taxi/ride-hailing services. XXTX earns commissions for each completed order as the difference between an upfront quoted fare and the amount earned by a driver based on actual time and distance for the ride charged to the rider. XXTX settles its commissions with the aggregation platforms on a weekly basis. Since December 2023, in order to improve the efficiency of XXTX’s daily operation and profitability, XXTX has engaged Anhui Lianma Technology Co., Ltd. (“Anhui Lianma”), a third-party to co-operate the online ride-hailing platform by outsourcing certain daily operation work to Anhui Lianma in most of cities it operates platform in XXTX and Anhui Lianma will jointly share the operational profits, with the specific calculation method being defined in the cooperation agreement.
Current wording
From October 2020 to August 2024, we operated our own online ride-hailing platform in China. The platform (called Xixingtianxia) was owned and operated by XXTX, of which Senmiao Consulting acquired the 100% equity interest pursuant to a series of investment and supplementary agreements. XXTX operated Xixingtianxia and held a national online reservation taxi operating license, which served online ride-hailing drivers in 22 cities in China, providing them with a platform to view and take customer orders for rides. XXTX generated revenue from providing services to online ride-hailing drivers to assist them in providing transportation services to the riders looking for taxi/ride-hailing services. XXTX earned commissions for each completed order as the difference between an upfront quoted fare and the amount earned by a driver based on actual time and distance for the ride charged to the rider.
Previous wording
Our revenue growth has been largely driven by the expansion of our automobile lessee base and the corresponding revenue generated from operating and financial leasing, as well as the number of completed online ride-hailing orders on our platform, which largely depends on the number of Active Drivers who complete ride-hailing transactions on our platform. We acquire customers for our Automobile Transaction and Related Services, as well as for our Online Ride-hailing Platform Services, through the network of third-party sales teams, referral from online ride-hailing platforms and our own efforts including online advertising and billboard advertising. We also send out fliers and participate in trade shows to advertise our services. We plan to maintain the number of our Active Drivers by marketing our platform to our existing and prospective automobile lessees in the cities we now operate in. We expect the expansion of our Active Driver base to promote the growth of our automobile rental business because we offer automobile rental solutions/incentives specifically targeted at drivers using our platform and the Partner Platforms. An effective cross-selling strategies between our automobile leasing business and Online Ride-hailing Platform Services business is important to our expansion and revenue growth. We also plan to strengthen our marketing efforts through the collaboration with certain automobile dealers and through our own team by employing more experienced staff, sharing market resources with our equity investee company, and improving the quality and variety of our services. As of June 30, 2024, we had 5 employees in our own sales department.
Current wording
Our revenue growth has been largely driven by the expansion of our automobile lessee base and the corresponding revenue generated from operating and financial leasing. We acquire customers for our Automobile Transaction and Related Services through the network of third-party sales teams, referral from online ride-hailing platforms and our own efforts including online advertising and billboard advertising. We also send out fliers and participate in trade shows to advertise our services. We plan to maintain the number of our customers by marketing our companies to our existing and prospective automobile lessees in the cities we now operate in. We expect to keep our Active Driver base to promote the growth of our automobile rental business because we offer automobile rental solutions/incentives specifically targeted at drivers using our Partner Platforms. An effective cross-selling strategies between our automobile leasing business and our Partner Platforms is important to our expansion and revenue growth. We also plan to strengthen our marketing efforts through the collaboration with certain automobile dealers and through our own team by employing more experienced staff, sharing market resources with our equity investee company, and improving the quality and variety of our services. As of September 30, 2024, we had 4 employees in our own sales department.
Previous wording
Due to the fierce competition of online ride-hailing industry in those cities we operate in, we have witnessed a high turn-over rate on the short-term car rentals during the three months ended June 30, 2024. To meet the demand in Chengdu and Changsha, we have purchased and leased automobiles from third parties for our operating lease. The daily management and timely maintenance of leased automobiles will have a significant effect on the growth of our income from leasing automobiles in the next twelve months. The effective management of our automobiles through our proprietary system and experienced auto-management team could provide in-time delivery and qualified automobiles to potential lessees, either for personal use or providing online ride-hailing services. As of June 30, 2024, for parking and management of automobiles for operating lease, we had one parking lot, an exhibition hall and 3 employees in Changsha, and we also share the parking lot with our equity investee company, Jinkailong in Chengdu. During the three months ended June 30, 2024 and 2023, the average utilization of the automobiles for operating lease was approximately 90.4% and 79.8%, respectively.
Current wording
Due to the fierce competition of online ride-hailing industry in those cities we operated in, we have witnessed a high turn-over rate on the short-term car rentals during the six months ended September 30, 2024. To meet the demand in Chengdu and Changsha, we have purchased and leased automobiles from third parties for our operating lease. The daily management and timely maintenance of leased automobiles will have a significant effect on the stability and potential growth of our income from leasing automobiles in the next twelve months. The effective management, including maintaining the high turn-over rate of our automobiles through our proprietary system and experienced auto-management team could provide in-time delivery and qualified automobiles to potential lessees, either for personal use or providing online ride-hailing services. As of September 30, 2024, for parking and management of automobiles for operating lease, we had one parking lot, an exhibition hall and 3 employees in Changsha, and we also share the parking lot with our equity investee company, Jinkailong in Chengdu. During the three months ended September 30, 2024 and 2023, the average utilization of the automobiles for operating lease was approximately 80.4% and 72.6%, respectively. During the six months ended September 30, 2024 and 2023, the average utilization of the automobiles for operating lease was approximately 85.2% and 76.1%, respectively.
Previous wording
The growth of our revenue depends on our ability to improve existing solutions and services provided, continue identifying evolving business needs, refine our collaborations with business partners and provide value-added services to our customers. The attraction of new automobile leases depends on our leasing solutions with attractive rental price and flexible leasing terms. We have also adopted a series of pricing formulas to adopt the market changes, considering the historical and future expenditure, remaining available leasing months and market price to determine our rental price for varied rental solutions. Furthermore, our product designs affect the type of automobile leases we attract, which in turn affect our financial performance. The attraction of new Active Drivers depends on the comprehensive income they could earn from our own or cooperated platform, which is mainly affected by the number of orders distributed to them through our platform and the amount of the incentives paid to them from platforms. Our revenue growth also depends on our abilities to effectively price our services, which enables us to attract more customers and improve our profit margin.
Current wording
The growth of our revenue depends on our ability to improve existing solutions and services provided, continue identifying evolving business needs, refine our collaborations with business partners and provide value-added services to our customers. The attraction of new automobile leases depends on our leasing solutions with attractive rental price and flexible leasing terms. We have also adopted a series of pricing formulas to adopt the market changes, considering the historical and future expenditure, remaining available leasing months and market price to determine our rental price for varied rental solutions. Furthermore, our product designs affect the type of automobile leases we attract, which in turn affect our financial performance. The attraction of new customers depends on the comprehensive income they could earn from our own or Partner Platforms, which is mainly affected by the number of orders distributed to them through our platform and the amount of the incentives paid to them from platforms. Our revenue growth also depends on our abilities to effectively price our services, which enables us to attract more customers and improve our profit margin.
Previous wording
Historically, we have set up a series of strategy and business relationships with certain affiliates of some famous and leading companies of NEVs manufacturers, online ride-hailing platforms, local NEVs leasing companies, and travel service providers to develop our Automobile Transaction and Related Services and Online Ride-hailing Platform Services. We earned commission or services fee from them, purchased and leased automobiles for our business at a favorable price. The close relationships have provided us with the necessary capacity to support the development of our online ride-hailing platform and leasing business. To retain these valuable cooperators and continuously explore opportunities to collaborate with them in more areas is important to us to have considerable resources to support the exploration and expansion of our business into new cities.
Current wording
Historically, we have set up a series of strategy and business relationships with certain affiliates of some famous and leading companies of NEVs manufacturers, online ride-hailing platforms, local NEVs leasing companies, and travel service providers to develop our Automobile Transaction and Related Services. We earned commission or services fee from them, purchased and leased automobiles for our business at a favorable price. The close relationships have provided us with the necessary capacity to support the development of our online ride-hailing platform and leasing business. To retain these valuable cooperators and continuously explore opportunities to collaborate with them in more areas is important to us to have considerable resources to support the exploration and expansion of our business into new cities.
Previous wording
Meanwhile, in order to strengthen our market position in certain cities, during the three months ended June 30, 2024, our subsidiaries, Hunan Ruixi and Jiekai, cooperated with other online ride-hailing platforms (“Partner Platforms”), such as Hunan DiDi Technology Co., Ltd., Chengdu Anma Zhixing Technology Co., Ltd., Sichuan Peitu Kuaixing Technology Co., Ltd. and Chongqing Yiqizhao Technology Co., Ltd. Chengdu Branch, whereby the online ride-hailing requests and orders shall be completed on Partner Platforms utilizing the network of cars and drivers of us while Hunan Ruixi and Jiekai earned rental income from drivers and earned commissions from Partner Platforms.
Current wording
Meanwhile, in order to strengthen our market position in certain cities, during the six months ended September 30, 2024, our subsidiaries, Hunan Ruixi and Jiekai, cooperated with Partner Platforms, such as Hunan DiDi Technology Co., Ltd., Chengdu Anma Zhixing Technology Co., Ltd., Sichuan Peitu Kuaixing Technology Co., Ltd. and Chongqing Yiqizhao Technology Co., Ltd. Chengdu Branch, whereby the online ride-hailing requests and orders shall be completed on Partner Platforms utilizing the network of cars and drivers of us while Hunan Ruixi and Jiekai earned rental income from drivers and earned commissions from Partner Platforms.
Previous wording
For receivables from Auto Operating Leasing, we usually settle the rental income with each online ride-hailing driver monthly based on the product solutions they chose. In accordance with the development of the operating lease business, our Partner Platforms, such as Gaode, agree to temporarily “lock-up” the fares of the rides which Active Drivers earn from the platform to ensure the timely collection of its rental receivables from those Active Drivers. As of June 30, 2024, we had accounts receivable of operating lease of approximately $12,000 in total. Besides, during the three months ended June 30, 2024, we settled our commissions with the Partner Platforms for our online ride-hailing platform services and automobile rental income on a monthly basis. As of June 30, 2024, we had accounts receivable of online ride-hailing service fees of approximately $8,000 in total. We used to advance the purchase price of automobiles and all service expenses when we provide related services to the purchasers. We collect the receivables due from automobile purchasers from their monthly installment payments during the relevant affiliation periods. As of June 30, 2024, we had accounts receivable of approximately $2,000 and advanced payments of approximately $3,000 due from the historical automobile purchasers.
Current wording
For receivables from Auto Operating Leasing, we usually settle the rental income with each online ride-hailing driver monthly based on the product solutions they chose. In accordance with the development of the operating lease business, our Partner Platforms, such as Gaode, agree to temporarily “lock-up” the fares of the rides which the driver earned from the platform to ensure the timely collection of our rental receivables from them. As of September 30, 2024, we had accounts receivable of operating lease of approximately $22,000 in total. Besides, during the six months ended September 30, 2024, we settled our commissions with the Partner Platforms for our online ride-hailing platform services and automobile rental income on a monthly basis.
Previous wording
The efficiency of collection of the monthly and weekly payments has a material impact on our daily operation. Our risk and asset management department has set up a series of procedures to monitor the collection from drivers. Our business department has also set up a stable and close relationship with cooperated platform to ensure the timely collection of commissions. The accounts receivable and advance payments may increase our liquidity risk. We have used the majority of the proceeds from our equity offerings and plan to seek equity and/or debt financings to pay for the expenditure related to the automobile purchase. To pay for the expenditure in advance will enhance the stability of our daily operation and lower the liquidity risk, and attract more customers.
Current wording
The efficiency of collection of the monthly and weekly payments has a material impact on our daily operation. Our risk and asset management department has set up a series of procedures to monitor the collection from drivers. Our business department has also set up a stable and close relationship with Partner Platforms to ensure the timely collection of commissions. The accounts receivable and advance payments may increase our liquidity risk. We have used the majority of the proceeds from our equity offerings and plan to seek equity and/or debt financings to pay for the expenditure related to the automobile purchase. To pay for the expenditure in advance will enhance the stability of our daily operation and lower the liquidity risk, and attract more customers.
Previous wording
We manage the credit risk arising from the default of automobile purchasers and lessees by performing credit checks on each automobile purchaser or lessee based on the credit reports from People’s Bank of China and third-party credit rating companies, and personal information including residence, ethnicity group, driving history and involvement in legal proceeding. Our risk department continuously monitors the payment by each purchaser and sends them payment reminders. We also keep monitoring the daily gross fare earned by the online ride-hailing drivers, who are our majority customers and run their business through our online ride-hailing platform during the three months ended June 30, 2024. We do this so that we can evaluate their financial conditions and provide them with assistance including the transfer of automobile to a new driver if they are no longer interested in providing ride-hailing services or are unable to earn enough income to make monthly lease/loan payments.
Current wording
We manage the credit risk arising from the default of automobile purchasers and lessees by performing credit checks on each automobile purchaser or lessee based on the credit reports from People’s Bank of China and third-party credit rating companies, and personal information including residence, ethnicity group, driving history and involvement in legal proceeding. Our risk department continuously monitors the payment by each purchaser and sends them payment reminders. We also keep monitoring the daily gross fare earned by the online ride-hailing drivers, who are our majority customers and run their business through our online ride-hailing platform during the six months ended September 30, 2024. We do this so that we can evaluate their financial conditions and provide them with assistance including the transfer of automobile to a new driver if they are no longer interested in providing ride-hailing services or are unable to earn enough income to make monthly lease/loan payments.
Previous wording
Further, the automobiles subject to our financing leases are not collateralized by us. As of June 30, 2024, the total value of non-collateralized automobiles was approximately $255,000. We believe our risk exposure of financing leasing is immaterial as we have experienced limited default cases and we are able to re-lease those automobiles to drivers under financing leases.
Current wording
Further, the automobiles subject to our financing leases are not collateralized by us. As of September 30, 2024, the total value of non-collateralized automobiles was approximately $260,000. We believe our risk exposure of financing leasing is immaterial as we have experienced limited default cases and we are able to re-lease those automobiles to drivers under financing leases.
Previous wording
The demand for our services depends on overall market conditions of the online ride-hailing industry in China. The continuous growth of the urban population places increasing pressure on the urban transportation and the improvement of living standards has increased the market demand for quality travel in China. Traditional taxi service is limited, and the emerging online platforms have created good opportunities for the development of the online ride-hailing service market. The market value is expected to increase from RMB354.7 billion in 2024 to RMB751.3 billion in 2028, owing to rising consumer demand for economical mobility options and an amplified penetration of shared mobility services, especially in lower-tier cities. According to the 53th Statistical report on Internet Development in China published in March 2024 by the China Internet Network Information Center (the “CNNIC”), the number of online ride-hailing service users had reached 528 million by the end of December 2023, and took approximately 48.3% of the total number of Chinese internet users. In addition, in recent years, aggregation platforms have gained rising significance in the shared mobility industry. According to Frost & Sullivan, the portion of ride hailing orders fulfilled through aggregation platforms increased from 3.5% in 2018 to 30.0% in 2023, and is expected to further increase to 49.0% by 2028. The online ride-hailing industry is also facing increasing competition in China and is attracting more capital investment. For example, Dida Inc., Chenqi Technology Limited and CaoCao Inc. have filed their prospectuses to the Stock Exchange of Hong Kong Limited in March 2024 and April 2024, respectively.
Current wording
The demand for our services depends on overall market conditions of the online ride-hailing industry in China. The continuous growth of the urban population places increasing pressure on the urban transportation and the improvement of living standards has increased the market demand for quality travel in China. Traditional taxi service is limited, and the emerging online platforms have created good opportunities for the development of the online ride-hailing service market. The market value is expected to increase from RMB354.7 billion in 2024 to RMB751.3 billion in 2028, owing to rising consumer demand for economical mobility options and an amplified penetration of shared mobility services, especially in lower-tier cities. According to the 54th Statistical report on Internet Development in China published in August 2024 by the China Internet Network Information Center (the “CNNIC”), the number of online ride-hailing service users had reached 503 million by the end of December 2023, and took approximately 45.7% of the total number of Chinese internet users. In addition, in recent years, aggregation platforms have gained rising significance in the shared mobility industry. According to Frost & Sullivan, the portion of ride hailing orders fulfilled through aggregation platforms increased from 3.5% in 2018 to 30.0% in 2023, and is expected to further increase to 49.0% by 2028. The online ride-hailing industry is also facing increasing competition in China and is attracting more capital investment. For example, Dida Inc., Chenqi Technology Limited and CaoCao Inc. have filed their prospectuses to the Stock Exchange of Hong Kong Limited in March 2024 and April 2024, respectively.
Previous wording
However, the participants in the online ride-hailing industry are facing increasingly fierce competitions. According to the Ministry of Transportation (the “MOT”) of the People’s Republic of China, as of June 30, 2024, approximately 354 online ride-hailing platforms have obtained booking taxi operating licenses and the total volume of online ride-hailing orders was approximately 971 million in June 2024 in China, representing an increase of approximately 11% and 27% as compared with the ones as of June 30, 2023, respectively. Meanwhile, approximately 3.01 million online booking taxi transportation certificates and approximately 7.13 million online booking taxi driver’s licenses were issued nationwide in China, representing an increase of approximately 24% and 23% as compared with the ones as of June 30, 2023, respectively. Since 2023, the municipal transportation bureaus in a series of cities in China have released operational dynamics and risk warnings for the online ride-hailing industry, stating that the online ride-hailing market has become saturated. They remind enterprises and practitioners who intend to engage in online ride-hailing services should have a detailed understanding of relevant regulations, conduct market research, fully consider changes in operating income due to factors such as supply and demand, market conditions, fluctuations or continuous declines, objectively evaluate the actual income level of industry practitioners, and make rational and prudent career choices.
Current wording
However, the participants in the online ride-hailing industry are facing increasingly fierce competitions. According to the Ministry of Transportation (the “MOT”) of the People’s Republic of China, as of August 31, 2024, approximately 359 online ride-hailing platforms have obtained booking taxi operating licenses and the total volume of online ride-hailing orders was approximately 1,029 million in August 2024 in China, representing an increase of approximately 10% and 25% as compared with the ones as of August 31, 2023, respectively. Meanwhile, approximately 3.10 million online booking taxi transportation certificates and approximately 7.30 million online booking taxi driver’s licenses were issued nationwide in China, representing an increase of approximately 21% and 20% as compared with the ones as of September 30, 2023, respectively. Since 2023, the municipal transportation bureaus in a series of cities in China have released operational dynamics and risk warnings for the online ride-hailing industry, stating that the online ride-hailing market has become saturated. They remind enterprises and practitioners who intend to engage in online ride-hailing services should have a detailed understanding of relevant regulations, conduct market research, fully consider changes in operating income due to factors such as supply and demand, market conditions, fluctuations or continuous declines, objectively evaluate the actual income level of industry practitioners, and make rational and prudent career choices.
Previous wording
The online ride-hailing industry may also be affected by, among other factors, the general economic conditions in China. The interest rates and unemployment rates may affect the demand of ride-hailing services and automobile purchasers’ willingness to seek credit from financial institutions. Adverse economic conditions could also reduce the average income of individual and intensify the competition between platforms. The platforms may spend more incentives and increase promotion activities to attract more riders and maintain sufficient online ride-hailing drivers to provide transportation services to riders. Should any of those negative situations occur, the volume and value of the automobile transactions we service will decline, and our revenue and financial condition will be negatively impacted.
Current wording
The online ride-hailing industry may also be affected by, among other factors, the general economic conditions in China. The interest rates and unemployment rates may affect the demand of ride-hailing services and automobile purchasers’ willingness to seek credit from financial institutions. Adverse economic conditions could also reduce the average income of individual and intensify the competition between platforms. Should any of those negative situations occur, the volume and value of the automobile transactions we service will decline, and our revenue and financial condition will be negatively impacted.
Previous wording
On November 5, 2016, the Municipal Communications Commission of Chengdu City and a number of municipal departments jointly issued the “Implementation Rules for the Administration of Online Booking Taxi Management Services for Chengdu”, which was abolished and replaced by the updated version issued on July 26, 2021. On August 10, 2017, the Transportation Commission of Chengdu further issued the guidelines on compliance requirements for online ride-hailing businesses, including Working Process for the Online Appointment of Taxi Drivers Qualification Examination and Issuance and Online Appointment Taxi Transportation Certificate Issuance Process. On November 28, 2016, Guangzhou Municipal People’s Government promulgated Interim Measures for the Management of Online Ride Hailing Operation and Service in Guangzhou, as amended on November 14, 2019. According to these regulations and guidelines, three licenses /certificates are required for operating the online ride-hailing business in Chengdu and Guangzhou: (1) the ride-hailing service platform such as XXTX should obtain the online booking taxi operating license; (2) the automobiles used for online ride-hailing should obtain the online booking taxi transportation certificate (“automobile certificate”); (3) the drivers should obtain the online booking taxi driver’s license (“driver’s license”). Besides, all the new cars used for online ride-hailing in Chengdu should be NEVs since July 2021.
Current wording
On November 5, 2016, the Municipal Communications Commission of Chengdu City and a number of municipal departments jointly issued the “Implementation Rules for the Administration of Online Booking Taxi Management Services for Chengdu”, which was abolished and replaced by the updated version issued on July 26, 2021. On August 10, 2017, the Transportation Commission of Chengdu further issued the guidelines on compliance requirements for online ride-hailing businesses, including Working Process for the Online Appointment of Taxi Drivers Qualification Examination and Issuance and Online Appointment Taxi Transportation Certificate Issuance Process. On November 28, 2016, Guangzhou Municipal People’s Government promulgated Interim Measures for the Management of Online Ride Hailing Operation and Service in Guangzhou, as amended on November 14, 2019. According to these regulations and guidelines, three licenses /certificates are required for operating the online ride-hailing business in Chengdu and Guangzhou: (1) the ride-hailing service platform should obtain the online booking taxi operating license; (2) the automobiles used for online ride-hailing should obtain the online booking taxi transportation certificate (“automobile certificate”); (3) the drivers should obtain the online booking taxi driver’s license (“driver’s license”). Besides, all the new cars used for online ride-hailing in Chengdu should be NEVs since July 2021.
Previous wording
However, approximately 32% of our ride-hailing drivers have not obtained the driver’s license for online ride-hailing services as of June 30, 2024 while all of the cars used for online ride-hailing services which we provided management services have the automobile certificate. Without requisite automobile certificate or driver’s license, these drivers may be suspended from providing ride-hailing services, confiscated their illegal income and subject to fines of up to 10 times of their illegal income. Starting in December 2019, Didi began to enforce such limitation on drivers in Chengdu who have a driver’s license but operate automobiles without the automobile certificate. Meanwhile, during the three months ended June 30, 2024, Gaode conducted several rounds of compliance checks in Chengdu and other cities. Gaode reduced the number of orders dispatched to XXTX platform as it found certain drivers who provide their online ride-hailing services through our platform without obtaining the driver’s licenses during the check. Accordingly, we have strengthened the drivers’ qualification check, and the decrease in the number of drivers without licenses further resulted to the decrease in the number of orders completed through XXTX platform. Thus, our revenue from online ride-hailing platform services decreased during the three months ended June 30, 2024 as compared with last year.
Current wording
However, approximately 36% of our ride-hailing drivers have not obtained the driver’s license for online ride-hailing services as of September 30, 2024 while all of the cars used for online ride-hailing services which we provided management services have the automobile certificate. Without requisite automobile certificate or driver’s license, these drivers may be suspended from providing ride-hailing services, confiscated their illegal income and subject to fines of up to 10 times of their illegal income. Starting in December 2019, Didi began to enforce such limitation on drivers in Chengdu who have a driver’s license but operate automobiles without the automobile certificate. Meanwhile, during the six months ended September 30, 2024, Gaode conducted several rounds of compliance checks in Chengdu and other cities. Gaode reduced the number of orders dispatched to XXTX platform as it found certain drivers who provide their online ride-hailing services through our platform without obtaining the driver’s licenses during the check. We had assisted the drivers to obtain the required certificate and license for our Automobile Transaction and Related Services. However, there was no guarantee that all of the drivers who run their online ride-hailing business would be able to obtain all the certificates and licenses. These Partner Platforms may not allow unqualified drivers who lease our automobiles to drive through these platforms, or reduce their commission income, so that they may not be able to earn enough income from those Partner Platforms to pay our rental fees. Our business and results of operations shall be materially and adversely affected if we could not serve qualified drivers or our served drivers are suspended from providing ride-hailing services.
Previous wording
Furthermore, according to the Interim Measures, no enterprise or individual is allowed to provide information for conducting online ride-hailing services to unqualified vehicles and drivers. Pursuant to the Interim Measures, XXTX and its subsidiaries may be fined between RMB5,000 to RMB30,000 ($688 to $4,128) for violations of the Interim Measures, including providing online ride-hailing platform services to unqualified drivers or vehicles. During the three months ended June 30, 2024, we have been fined by approximately $3,000 by Traffic Management Bureaus in Changsha. If we are deemed in serious violation of the Interim Measures, our Online Ride-hailing Platform Services may be suspended and the relevant licenses may be revoked by certain government authorities.
Current wording
Furthermore, according to the Interim Measures, no enterprise or individual is allowed to provide information for conducting online ride-hailing services to unqualified vehicles and drivers. Pursuant to the Interim Measures, during the three and six months ended September 30, 2024, XXTX had been fined by approximately $3,000 by Traffic Management Bureaus in Changsha for providing online ride-hailing platform services to unqualified drivers. Since October 2020, XXTX had been fined by approximately $323,000 by Traffic Management Bureaus in Changsha, Chengdu, Guangzhou and other cities, of which, approximately $65,000 was further compensated by drivers or cooperated third parties.
Previous wording
Results of Operations for the three months ended June 30, 2024 Compared to the three months ended June 30, 2023
Current wording
Results of Continuing Operations for the three months ended September 30, 2024 Compared to the three months ended September 30, 2023
Previous wording
We generate revenues from leasing our own automobiles, sub-leasing automobiles leased from third-parties or rendered by online ride-hailing drivers with their authorization for a lease term of no more than twelve months. The decrease of rental income of $300,079 or approximately 28.4% during the three months ended June 30, 2024 was mainly due to the decrease in the number of the automobiles leased for operating lease. We leased approximately 640 automobiles with an average monthly rental income of approximately $413 per automobile, resulting in a rental income of $756,315, including rental income of $5,243 from Jinkailong, for the three months ended June 30, 2024. While we leased over 1,000 automobiles with an average monthly rental income of approximately $491 per automobile, resulting in a rental income of $1,056,394, including rental income of $13,748 from Jinkailong, for the three months ended June 30, 2023.
Current wording
We generate revenues from leasing our own automobiles, sub-leasing automobiles leased from third-parties or rendered by online ride-hailing drivers with their authorization for a lease term of no more than twelve months. The decrease of rental income of $436,575 or approximately 42.8% during the three months ended September 30, 2024 was mainly due to the decrease in the number of the automobiles leased for operating lease as well as average monthly rental income per automobile. We leased approximately 596 automobiles with an average monthly rental income of approximately $405 per automobile, resulting in a rental income of $584,418, including rental income of $3,622 from Jinkailong, for the three months ended September 30, 2024. While we leased over 960 automobiles with an average monthly rental income of approximately $491 per automobile, resulting in a rental income of $1,020,993, including rental income of $8,399 from Jinkailong, for the three months ended September 30, 2023.
Previous wording
We generated revenues of $26,254 and $50,590 from the monthly management and related services provided to our Partner Platforms and other companies during the three months ended June 30, 2024 and 2023, respectively. The decrease of $24,336 or approximately 48.1% was due to decrease in the number of the automobiles and drivers we served, who ran their business through the Partner Platforms.
Current wording
We generated revenues of $30,681 and $66,221 from the monthly management and related services provided to our Partner Platforms and other companies during the three months ended September 30, 2024 and 2023, respectively. The decrease of $35,540 or approximately 53.7% was due to decrease in the number of the automobiles and drivers we served, who ran their business through the Partner Platforms.
Previous wording
We started our financial leasing business in March 2019 and began to generate interest income from providing financial leasing services to ride-hailing drivers in April 2019. We also charge the customers of our automobile financing facilitation services interest on their monthly payments which cover purchase price of automobile and our services fees and facilitation fees for terms of 36 or 48 months. We recognized a total interest income of $22,176 from an average monthly number of 38 automobiles and $13,600 from an average monthly number of 41 automobiles during the three months ended June 30, 2024 and 2023, respectively. The increase was due to the monthly payment we charged to customers for financial leasing increased during the three months ended June 30, 2024.
Current wording
We started our financial leasing business in March 2019 and began to generate interest income from providing financial leasing services to ride-hailing drivers in April 2019. We also charge the customers of our automobile financing facilitation services interest on their monthly payments which cover purchase price of automobile and our services fees and facilitation fees for terms of 36 or 48 months. We recognized a total interest income of $26,853 from an average monthly number of 48 automobiles and $11,340 from an average monthly number of 33 automobiles during the three months ended September 30, 2024 and 2023, respectively. The increase was due to the monthly payment we charged to customers and the average number of automobiles served for financial leasing increased during the three months ended September 30, 2024.
Previous wording
We generated revenues of $22,094 and $20,271 from leasing NEVs by charging leases service fees during the three months ended June 30, 2024 and 2023, respectively. The amount of services fees for NEVs leasing is based on its product solutions.
Current wording
We generated revenues of $51,694 and $4,626 from leasing NEVs by charging leases service fees during the three months ended September 30, 2024 and 2023, respectively. The amount of services fees for NEVs leasing is based on our product solutions in accordance which adjusted with different market conditions.
Previous wording
We had no income from sales of automobiles during the three months ended June 30, 2024. Meanwhile, we sold one used automobile with income of $5,044 during the three months ended June 30, 2023.
Current wording
We had no income from sales of automobiles during the three months ended September 30, 2024 while we sold one used automobile with income of $3,778 during the three months ended September 30, 2023.
Previous wording
Cost of revenues represents (1) the amortization of ROUs, depreciation and rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to our Auto Operating Leasing of $626,039; and (2) technical service charges, insurance and other expenses related to our Online Ride-Hailing Platform Services of $175,826. Cost of revenues decreased by $710,909 or approximately 47% during the three months ended June 30, 2024 as compared with the same period in 2023, mainly due to the decrease of $283,472 in costs of automobiles under operating leases due to the decrease in the number of the automobiles leased for operating lease in the three months ended June 30, 2024, decrease of $420,897 in direct expense and technical service fees of online ride-hailing platform services due to the decrease in the number of completed orders, and the decrease of $6,540 in costs of our Auto Sales. During the three months ended June 30, 2024 and 2023, the costs of automobiles under operating leases with amount of $1,627 and $210,179, respectively, was from a related party.
Current wording
Cost of revenues represents the amortization of ROUs, depreciation and rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to our Auto Operating Leasing. Cost of revenues decreased by $353,901 or approximately 35% during the three months ended September 30, 2024 as compared with the same period in 2023, mainly due to the decrease of $349,902 in costs of automobiles under operating leases due to the decrease in the number of the automobiles leased for operating lease in the three months ended September 30, 2024, and the decrease of $3,999 in costs of our Auto Sales. During the three months ended September 30, 2024 and 2023, the costs of automobiles under operating leases with amount of $17,334 and $182,165, respectively, was from a related party.
Previous wording
We had gross profit of $320,535 and $581,940, respectively, during the three months ended June 30, 2024 and 2023. The decrease of $261,405 was mainly due to the decrease in profit from online ride-hailing platform services. The following table sets forth the breakdown of gross profit (loss) by major revenue source for the three months ended June 30, 2024 and 2023:
Current wording
We had gross profit of $96,899 and $180,256, respectively, during the three months ended September 30, 2024 and 2023. The decrease of $83,357 was mainly due to the decrease in profit from Auto Operating Leasing. The following table sets forth the breakdown of gross profit (loss) by major revenue source for the three months ended September 30, 2024 and 2023:
Previous wording
We had a gross profit of $67,565 in our online ride-hailing platform services during the three months ended June 30, 2024, which decreased by $241,318 from a gross profit of $308,883 in the three months ended June 30, 2023. The decrease was attributable to the decrease of gross fare of rides completed through our Xixingtianxia platform from approximately $5.3 million for the three months ended June 30, 2023 to approximately $1.3 million for the three months ended June 30, 2024, respectively. As the gross margin of the revenues from our Auto Business increased during the three months ended June 30, 2024, our overall gross profit margin of slightly increased to approximately 28.6% from approximately 27.8% during the three months ended June 30, 2023.
Current wording
We had a gross loss of $64,563 in our Auto Operating Leasing during the three months ended September 30, 2024, which decreased by $86,673 from a gross profit of $22,110 in the three months ended September 30, 2023. The decrease was attributable to the average monthly rental income decreased from approximately $491 for the three months ended September 30, 2023 to approximately $405 for the three months ended September 30, 2024, respectively. As the gross margin of the revenues from our Auto Business decreased during the three months ended September 30, 2024, our overall gross profit margin slightly decreased to approximately 13.0% from approximately 15.2% during the three months ended September 30, 2023.
Previous wording
We re-evaluated the possibility of collection of unsettled balances from customers/suppliers of our automobile transactions and related services, and provided provision for credit losses of $173,441 and $127,073 against receivables from Jinkailong for the three months ended June 30, 2024 and 2023, respectively.
Current wording
We re-evaluated the possibility of collection of unsettled balances from customers/suppliers of our automobile transactions and related services, and provided provision for credit losses of $181,995 and $553,323 against receivables from Jinkailong for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
For the three months ended June 30, 2024, we had other income, net of $47,656, which primarily consist of the (1) penalty income of approximately $32,000 from the customers; (2) income of approximately $3,000 from the disposal of our own vehicles used for operating leases; and (3) the miscellaneous income of approximately $13,000. For the three months ended June 30, 2023, we had other income, net of $72,149, which primarily consist of the (1) income of approximately $23,000 from the disposal of our right-of-use assets and our own vehicles used for operating leases; (2) penalty income of approximately $23,000 from the customers; and (3) the miscellaneous income of approximately $26,000.
Current wording
For the three months ended September 30, 2023, we had other income, net of $37,782, which primarily consist of (1) the income of approximately $4,500 from the disposal of our right-of-use assets and our own vehicles used for operating leases; (2) penalty income of approximately $29,000 from the customers; and (3) the miscellaneous income of approximately $4,000.
Previous wording
Interest expense on finance leases for the three months ended June 30, 2024 and 2023 was $5,088 and $8,722, respectively, representing the interest expense accrued under financing leases for the leased automobiles Corenel leased from a third-party company, and the leased automobiles rendered to us for sublease or sale by the online ride-hailing drivers who exited the ride-hailing business.
Current wording
Interest expense on finance leases for the three months ended September 30, 2024 and 2023 was $4,270 and $7,594, respectively, representing the interest expense accrued under financing leases for the leased automobiles Corenel leased from a third-party company, and the leased automobiles rendered to us for sublease or sale by the online ride-hailing drivers who exited the ride-hailing business.
Previous wording
Warrants issued in our registered direct offerings that took place in September 2019, February 2021 and May 2021, and the August 2020 underwritten public offering, and the November 2021 private placement were classified as liabilities under the caption “Derivative Liabilities” in the consolidated balance sheet and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. The change in fair value of derivative liabilities for the three months ended June 30, 2024 was a loss of $8,287 in total. The following table sets forth the breakdown of the gain (loss) in fair value of derivative liabilities for the three months ended June 30, 2024 and 2023:
Current wording
Warrants issued in our registered direct offerings that took place in September 2019, February 2021 and May 2021, and the August 2020 underwritten public offering, and the November 2021 private placement were classified as liabilities under the caption “Derivative Liabilities” in the consolidated balance sheet and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. The change in fair value of derivative liabilities for the three months ended September 30, 2024 and 2023 was a loss of $7,127 and a gain of $59,666, respectively. The following table sets forth the breakdown of the gain (loss) in fair value of derivative liabilities for the three months ended September 30, 2024 and 2023:
Previous wording
Generally, our subsidiaries are subject to enterprise income tax on their taxable income in China at a rate of 25%. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. For three months ended June 30, 2024, we had deferred tax benefit of $1,935 resulted from deferred tax, while all the subsidiaries in China suffered losses for the three months ended June 30, 2024 and 2023.
Current wording
Generally, our subsidiaries are subject to enterprise income tax on their taxable income in China at a rate of 25%. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. For three months ended September 30, 2024, all the subsidiaries in China suffered losses and no tax expense was recorded for the three months ended September 30, 2024 and 2023.
Previous wording
As a result of the foregoing, net loss for the three months ended June 30, 2024 was $762,818, representing an increase of $341,471 from net loss of $421,347 for the three months ended June 30, 2023.
Current wording
As a result of the foregoing, net loss from continuing operations for the three months ended September 30, 2024 was $238,739, representing a decrease of $843,662 from net loss of $1,082,401 for the three months ended September 30, 2023.
Previous wording
We started generating revenue from Automobile Transaction and Related Services from our acquisition of Hunan Ruixi on November 22, 2018 and revenue from online ride-hailing platform services from our acquisition of XXTX on October 23, 2020, respectively.
Current wording
We started generating revenue from Automobile Transaction and Related Services from our acquisition of Hunan Ruixi on November 22, 2018.
Previous wording
Revenue for the three months ended June 30, 2024 decreased by $972,314, or approximately 46%, as compared with the three months ended June 30, 2023. The decrease was mainly due to the decrease of $662,215 of revenues from online ride-hailing platform services resulted from the decrease in orders caused by the market competition, and the decrease of $300,079 of operating lease revenues from automobile rentals resulted from the decrease number of the automobiles for operating lease.
Current wording
Revenue for the six months ended September 30, 2024 decreased by $747,357, or approximately 31.5%, as compared with the six months ended September 30, 2023. The decrease was mainly due to the decrease of $736,654 of operating lease revenues from automobile rentals resulted from the decrease number of the automobiles for operating lease.
Previous wording
Revenue from our automobile transaction and related services mainly includes operating lease revenues from automobile rentals, monthly services commissions, financing revenues, service fees from NEVs leasing, service fees from automobile purchase services, and other services fees, which accounted for approximately 86.0%, 3.0%, 2.5%, 2.5%, 2.5%, and 3.5%, respectively, of the total revenue from automobile transaction and related services during the three months ended June 30, 2024. Meanwhile, operating lease revenues from automobile rentals, monthly services commissions, financing revenues, service fees from NEVs leasing, service fees from automobile purchase services, sales revenue of automobiles and other services fees, which accounted for approximately 88.8%, 4.3%, 1.1%, 1.7%, 1.0%, 0.4% and 2.7%, respectively, of the total revenue from automobile transaction and related services during the three months ended June 30, 2023.
Current wording
Revenue from our automobile transaction and related services mainly includes operating lease revenues from automobile rentals, monthly services commissions, financing revenues, service fees from NEVs leasing, service fees from automobile purchase services, and other services fees, which accounted for approximately 82.5%, 3.5%, 3.0%,4.5%, 1.7%, and 4.8%, respectively, of the total revenue from automobile transaction and related services during the six months ended September 30, 2024. Meanwhile, operating lease revenues from automobile rentals, monthly services commissions, financing revenues, service fees from NEVs leasing, service fees from automobile purchase services, sales revenue of automobiles and other services fees, which accounted for approximately 87.6%, 4.9%, 1.1%, 1.0%, 0.5%, 0.4% and 4.5%, respectively, of the total revenue from automobile transaction and related services during the six months ended September 30, 2023.
Previous wording
We generate revenues from providing a series of automobile purchase services throughout the automobile purchase transaction process, including sales-type lease. We had revenue from 16 automobiles purchase transaction during the three months ended June 30, 2024 while we had revenue from 5 automobile purchase services during the three months ended June 30, 2023. As a result, the related service fees generated increased $9,506 from $12,232 during the three months ended June 30, 2023 to $21,738 during the three months ended June 30, 2024.
Current wording
We generate revenues from providing a series of automobile purchase services throughout the automobile purchase transaction process, including sales-type lease. We had revenue from 19 automobiles purchase transaction during the six months ended September 30, 2024 while we had revenue from 5 automobile purchase services during the six months ended September 30, 2023. As a result, the related service fees generated increased $14,671 from $12,232 during the six months ended September 30, 2023 to $26,903 during the six months ended September 30, 2024.
Showing the first 40 of 60 pairs. Open the source sections for the rest.
Rearranged current paragraphs (19)
Current report — wording carried from elsewhere
From October 2020 to August 2024, we also operated an online ride-hailing platform through Hunan Xixingtianxia Technology Co., Ltd. (“XXTX”), a wholly-owned subsidiary of Sichuan Senmiao Zecheng Business Consulting Co., Ltd., our wholly-owned subsidiary (“Senmiao Consulting”). The platform enabled qualified ride-hailing drivers to provide application-based transportation services mainly in Chengdu, Changsha and other 20 cities in China. As more fully discussed below under “– Our Discontinued Ride-Hailing Platform Services,” we ceased our online ride-hailing Platform Services on August 20, 2024.
Current report — wording carried from elsewhere
We started generating revenue from Automobile Transaction and Related Services from our acquisition of Hunan Ruixi on November 22, 2018. Revenue for the three months ended September 30, 2024 decreased by $437,258, or approximately 37.0%, as compared with the three months ended September 30, 2023. The decrease was mainly due to the decrease number of the automobiles for operating lease.
Current report — wording carried from elsewhere
Revenue from our automobile transaction and related services mainly includes operating lease revenues from automobile rentals, monthly services commissions, financing revenues, service fees from NEVs leasing, service fees from automobile purchase services, and other services fees, which accounted for approximately 78.4%, 4.1%, 3.6%, 6.9%, 0.7% and 6.3%, respectively, of the total revenue from automobile transaction and related services during the three months ended September 30, 2024. Meanwhile, operating lease revenues from automobile rentals, monthly services commissions, financing revenues, service fees from NEVs leasing, sales revenue of automobiles and other services fees, which accounted for approximately 86.3%, 5.6%, 1.0%, 0.4%, 0.3% and 6.4%, respectively, of the total revenue from automobile transaction and related services during the three months ended September 30, 2023.
Current report — wording carried from elsewhere
We had revenue from 3 automobiles purchase transaction during the three months ended September 30, 2024 while we had no revenue from automobile purchase services during the three months ended September 30, 2023.
Current report — wording carried from elsewhere
Selling, general and administrative expenses primarily consist of salary and employee benefits, office rental expense, travel expenses, and other costs. Selling, general and administrative expenses decreased from $799,188 for the three months ended September 30, 2023 to $530,651 for the three months ended September 30, 2024, representing a decrease of $268,537, or approximately 33.6%. The decrease was attributable to our continuous control on costs and streamline expenses during the three months ended September 30, 2024. The decrease mainly consisted of (1) a decrease of $140,224 in offices rental and charges; and (2) a decrease of $122,919 in professional service fees such as financial, legal and market consulting in the three months ended September 30, 2024.
Current report — wording carried from elsewhere
The following table sets forth the breakdown of revenues by revenue source for the six months ended September 30, 2024 and 2023:
Current report — wording carried from elsewhere
Operating lease revenues from automobile rentals
Current report — wording carried from elsewhere
We generate revenues from leasing our own automobiles, sub-leasing automobiles leased from third-parties or rendered by online ride-hailing drivers with their authorization for a lease term of no more than twelve months. The decrease of rental income of $736,654 or approximately 35.5% during the six months ended September 30, 2024 was mainly due to the decrease in the number of the automobiles leased for operating lease as well as average monthly rental income per automobile. We leased approximately 627 automobiles with an average monthly rental income of approximately $413 per automobile, resulting in a rental income of $1,340,733, including rental income of $8,865 from Jinkailong, for the six months ended September 30, 2024. While we leased over 1,200 automobiles with an average monthly rental income of approximately $490 per automobile, resulting in a rental income of $2,077,387, including rental income of $22,147 from Jinkailong, for the six months ended September 30, 2023.
Current report — wording carried from elsewhere
We generated revenues of $56,935 and $116,811 from the monthly management and related services provided to our Partner Platforms and other companies during the six months ended September 30, 2024 and 2023, respectively. The decrease of $59,876 or approximately 51.3% was due to decrease in the number of the automobiles and drivers we served, who ran their business through the Partner Platforms.
Current report — wording carried from elsewhere
We started our financial leasing business in March 2019 and began to generate interest income from providing financial leasing services to ride-hailing drivers in April 2019. We also charge the customers of our automobile financing facilitation services interest on their monthly payments which cover purchase price of automobile and our services fees and facilitation fees for terms of 36 or 48 months. We recognized a total interest income of $49,029 from an average monthly number of 43 automobiles and $24,940 from an average monthly number of 37 automobiles during the six months ended September 30, 2024 and 2023, respectively. The increase was due to the monthly payment we charged to customers and the average number of automobiles served for financial leasing increased during the six months ended September 30, 2024.
Current report — wording carried from elsewhere
We generated revenues of $73,788 and $24,897 from leasing NEVs by charging leases service fees during the six months ended September 30, 2024 and 2023, respectively. The amount of services fees for NEVs leasing is based on our product solutions which adjusted in accordance with different market conditions.
Current report — wording carried from elsewhere
We generate other revenues from other miscellaneous service fees charged to our customers. Other services fees mainly include the maintenance fees charged to our customers pursuant to certain new production solutions.
Current report — wording carried from elsewhere
Cost of revenues represents the amortization of ROUs, depreciation and rental cost of automobiles, daily maintenance and insurance expense of automobiles which related to our Auto Operating Leasing. Cost of revenues decreased by $643,913 or approximately 33.6% during the six months ended September 30, 2024 as compared with the same period in 2023, mainly due to the decrease of $633,374 in costs of automobiles under operating leases due to the decrease in the number of the automobiles leased for operating lease in the six months ended September 30, 2024, and the decrease of $10,539 in costs of our Auto Sales. During the six months ended September 30, 2024 and 2023, the costs of automobiles under operating leases with amount of $18,961 and $392,344, respectively, was from a related party.
Current report — wording carried from elsewhere
We re-evaluated the possibility of collection of unsettled balances from customers/suppliers of our automobile transactions and related services, and provided provision for credit losses of $355,436 and $680,396 against receivables from Jinkailong for the six months ended September 30, 2024 and 2023, respectively.
Current report — wording carried from elsewhere
Interest expense on finance leases for the six months ended September 30, 2024 and 2023 was $9,358 and $16,316, respectively, representing the interest expense accrued under financing leases for the leased automobiles Corenel leased from a third-party company, and the leased automobiles rendered to us for sublease or sale by the online ride-hailing drivers who exited the ride-hailing business.
Current report — wording carried from elsewhere
Change in Fair Value of Derivative Liabilities
Current report — wording carried from elsewhere
Warrants issued in our registered direct offerings that took place in September 2019, February 2021 and May 2021, and the August 2020 underwritten public offering, and the November 2021 private placement were classified as liabilities under the caption “Derivative Liabilities” in the consolidated balance sheet and recorded at estimated fair value at each reporting date, computed using the Black-Scholes valuation model. The change in fair value of derivative liabilities for the six months ended September 30, 2024 and 2023 was a loss of $15,414 and a gain of $363,839, respectively. The following table sets forth the breakdown of the gain (loss) in fair value of derivative liabilities for the six months ended September 30, 2024 and 2023:
Current report — wording carried from elsewhere
Generally, our subsidiaries are subject to enterprise income tax on their taxable income in China at a rate of 25%. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. All the subsidiaries in China suffered losses and no tax expense was recorded for the six months ended September 30, 2024 and 2023.
Current report — wording carried from elsewhere
Cost of revenues from discontinued operations represents technical service charges, insurance and other expenses related to Online Ride-Hailing Platform Services. During each of the three and six months ended September 30, 2024, cost of revenues decreased as compared with the same period in 2023, mainly due to the decrease in direct expense and technical service fees of online ride-hailing platform services due to the decrease in the number of completed orders.