Valor Energy Inc 10-Q for FY2022 Q1

Valor Energy Inc (VAI)

10-Q 2021-08-16 For: 2021-06-30

Added on April 11, 2026

About this 10-Q

Valor Energy Inc filed this 10-Q on August 16, 2021, covering the quarter ended June 30, 2021 (FY2022 Q1).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.85M; up 61.0% from $1.15M a year earlier
Net loss: $6.25M; compared with a net loss of $1.98M a year earlier

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Nevada		35-2600898
(State or other jurisdiction		(IRS Employer Identification No.)
of incorporation or organization)

16F, Shihao Square, Middle Jiannan Blvd. High-Tech Zone, Chengdu Sichuan, People’s Republic of China		610000
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		AIHS		The NASDAQ Stock Market LLC


Large accelerated filer	◻	Accelerated filer	◻
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒


Cautionary Note Regarding Forward-Looking Statements		3

PART I – FINANCIAL INFORMATION		5

Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4.	Controls and Procedures	70

PART II – OTHER INFORMATION		71
Item 1	Legal Proceedings	71
Item 5.	Other Information	71
Item 6.	Exhibits	72

SIGNATURES		73


	June 30, 2021		March 31, 2021
	(Unaudited)
ASSETS
Current assets
Cash, and cash equivalents	$	4,037,518	$	4,448,075
Accounts receivable, net, current portion		1,284,226		1,437,195
Inventories		255,954		127,933
Finance lease receivables, net, current portion		501,482		541,605
Prepayments, other receivables and other assets, net		4,560,491		3,905,278
Due from related parties		38,333		39,572
Current assets - discontinued operations		54,255		393,348
Total current assets		10,732,259		10,893,006

Property and equipment, net
Property and equipment, net		5,574,939		3,700,147
Property and equipment, net - discontinued operations		—		5,592
Total property and equipment, net		5,574,939		3,705,739

Other assets

Operating lease right-of-use assets, net		452,035		499,221
Operating lease right-of-use assets, net, related parties		718,804		580,367
Financing lease right-of-use assets, net		3,889,841		4,778,772
Intangible assets, net		935,122		968,131
Goodwill		—		135,388
Accounts receivable, net, noncurrent		111,591		269,183
Finance lease receivables, net, noncurrent		337,885		473,472
Total other assets		6,445,278		7,704,534

Total assets	$	22,752,476	$	22,303,279

LIABILITIES AND EQUITY （DEFICIENCY）
Current liabilities
Borrowings from financial institutions	$	451,742	$	310,662
Accounts payable		184,113		44,769
Advances from customers		154,779		155,586
Income tax payable		17,666		17,408
Accrued expenses and other liabilities		8,704,888		6,655,592
Due to related parties and affiliates		485,301		352,827
Operating lease liabilities		112,977		209,644
Operating lease liabilities - related parties		410,582		243,726
Financing lease liabilities		5,195,122		5,172,943
Derivative liabilities		6,164,941		1,278,926
Current liabilities - discontinued operations		934,524		2,336,861
Total current liabilities		22,816,635		16,778,944

Other liabilities
Borrowings from financial institutions, noncurrent		40,062		44,962
Operating lease liabilities, non-current		249,017		263,708
Operating lease liabilities, non-current - related parties		407,296		341,549
Financing lease liabilities, non-current		1,734,107		2,256,553
Deferred tax liability		45,659		44,993
Total other liabilities		2,476,141		2,951,765

Total liabilities		25,292,776		19,730,709

Commitments and contingencies

Stockholders’ equity (deficiency)
Common stock (par value $0.0001 per share, 100,000,000 shares authorized; 55,356,670 and 49,780,725 shares issued and outstanding at June 30, 2021 and March 31, 2021, respectively)		5,536		4,978
Additional paid-in capital		43,031,107		40,755,327
Accumulated deficit		(40,313,536)		(34,064,921)
Accumulated other comprehensive loss		(845,908)		(838,671)
Total Senmiao Technology Limited stockholders’ equity		1,877,199		5,856,713

Non-controlling interests		(4,417,499)		(3,284,143)

Total equity (deficiency)		(2,540,300)		2,572,570

Total liabilities and equity (deficiency)	$	22,752,476	$	22,303,279


	For the Three Months Ended
	June 30,
	2021		2020
	(Unaudited)		(Unaudited)
Revenues	$	1,850,075	$	1,146,916
Cost of revenues		(3,779,346)		(800,256)
Gross profit (loss)		(1,929,271)		346,660

Operating expenses
Selling, general and administrative expenses		(3,683,277)		(1,960,425)
Provision for doubtful accounts, net of recovery		(45,553)		(128,612)
Impairments of long-lived assets and goodwill		(164,257)		—
Total operating expenses		(3,893,087)		(2,089,037)

Loss from operations		(5,822,358)		(1,742,377)

Other expense
Other expense, net		(56,659)		(6,076)
Interest expense		(14,696)		(20,648)
Interest expense on finance leases		(107,639)		(226,177)
Change in fair value of derivative liabilities		(1,369,284)		(282,980)
Total other expense, net		(1,548,278)		(535,881)

Loss before income taxes		(7,370,636)		(2,278,258)
Income tax expense		—		(6,272)
Net loss from continuing operations		(7,370,636)		(2,284,530)
Net loss from discontinued operations, net of applicable income taxes		—		(85,654)

Net loss		(7,370,636)		(2,370,184)
Net loss attributable to non-controlling interests from continuing operations		1,122,021		389,699

Net loss attributable to stockholders	$	(6,248,615)	$	(1,980,485)
Net loss	$	(7,370,636)	$	(2,370,184)

Other comprehensive income (loss)
Foreign currency translation adjustment		(18,572)		11,717
Comprehensive loss		(7,389,208)		(2,358,467)

less: Total comprehensive loss attributable to noncontrolling interests		(1,133,356)		(387,386)
Total comprehensive loss attributable to stockholders	$	(6,255,852)	$	(1,971,081)
Weighted average number of common stock
Basic and diluted		52,731,560		29,008,818

Loss per share – basic and diluted
Continuing operations	$	(0.12)	$	(0.07)

Loss per share -
Discontinued operations	$	—	$	(0.00)


	For the Three Months Ended June 30, 2021
								Accumulated
				Additional				other				Total
	Common stock			paid-in		Accumulated		comprehensive		Non-controlling		equity
	Shares	Par value		capital		deficit		loss		interest		(deficiency)
BALANCE, March 31, 2021	49,780,725	$	4,978	$	40,755,327	$	(34,064,921)	$	(838,671)	$	(3,284,143)	$	2,572,570
Net loss	—		—		—		(6,248,615)				(1,122,021)		(7,370,636)
Exercise of Series A warrants into common stock	44,029		4		22,011		—		—		—		22,015
Fair value of derivative liabilities upon exerice of warrants	—		—		45,674		—		—		—		45,674
Issuance of common stock and warrants in a registered direct offerings, net of issuance costs	5,531,916		553		5,770,500		—		—		—		5,771,053
Fair value of warrants allocated to derivative liabilities	—		—		(3,562,404)		—		—		—		(3,562,404)
Foreign currency translation adjustment	—		—		—		—		(7,237)		(11,335)		(18,572)
BALANCE, June 30, 2021 (Unaudited)	55,356,670	$	5,536	$	43,031,107	$	(40,313,536)	$	(845,908)	$	(4,417,499)	$	(2,540,300)


	June 30, 2021		March 31, 2021
	(Unaudited)
Current assets:
Cash and cash equivalents	$	151,870	$	134,776
Accounts receivable, net, current portion		729,890		935,165
Prepayments, other receivables and other assets, net		1,866,991		1,245,330
Other receivable - intercompany		2,428,232		1,815,250
Due from related parties		38,333		39,572
Current assets - discontinued operations (1)		234,710		571,172
Total current assets		5,450,026		4,741,265

Property and equipment, net:
Property and equipment, net		390,292		451,522
Property and equipment, net - discontinued operations		—		2,706
Total property and equipment, net		390,292		454,228

Other assets:
Operating lease right-of-use assets, net		250,759		265,470
Operating lease right-of-use assets, net, related parties		8,852		9,896
Financing lease right-of-use assets, net		3,353,184		4,201,693
Accounts receivable, net, non-current		78,706		207,240
Total other assets		3,691,501		4,684,299

Total assets	$	9,531,819	$	9,879,792

Current liabilities:
Borrowings from financial institutions	$	451,742	$	310,662
Advances from customers		50,169		45,413
Income tax payable		17,666		17,408
Accrued expenses and other liabilities		4,063,098		3,750,393
Other payable - intercompany		7,781,428		6,895,543
Due to related parties and affiliates		485,301		352,827
Operating lease liabilities		64,568		99,831
Operating lease liabilities - related parties		6,496		4,989
Financing lease liabilities		4,791,939		4,814,808
Current liabilities - discontinued operations (2)		934,524		2,372,652
Total current liabilities		18,646,931		18,664,526

Other liabilities:
Borrowings from financial institutions, non-current		33,867		38,857
Operating lease liabilities, non-current		167,387		167,822
Operating lease liabilities, non-current - related parties		2,624		3,850
Financing lease liabilities, non-current		1,600,633		2,037,609
Total other liabilities		1,804,511		2,248,138

Total liabilities	$	20,451,442	$	20,912,664


	June 30, 2021	March 31, 2021
Balance sheet items, except for equity accounts	6.4572	6.5527


	Carrying Value at		Fair Value Measurement at
	June 30, 2021		June 30, 2021
	(Unaudited)		Level 1		Level 2		Level 3
Derivative liabilities	$	6,164,941	$	—	$	—	$	6,164,941


							Auigust		February		May		May
							2020		2021		2021		2021
	2019 Registered Direct Offering						Underwritten		Registered		Registered		Registered
							Public		Direct		Direct Offering		Direct Offering
	Series A		Series B		Placement		Offering		Offering		Investors		Placement
	Warrants		Warrants		Warrants		Warrants		Warrants		Warrants		Warrants		Total
BALANCE as of March 31, 2020	$	315,923	$	1,371	$	25,236	$	—	$	—	$	—	$	—	$	342,530
Derivative liabilities recognized at grant date		—		—		—		241,919		755,274		—		—		997,193
Change in fair value of derivative liabilities		1,234,630		—		138,336		455,162		(117,713)		—		—		1,710,415
Fair value of warrants exercised		(1,470,285)		—		—		(299,556)		—		—		—		(1,769,841)
Warrant forfeited due to expiration		—		(1,371)		—		—		—		—		—		(1,371)
BALANCE as of March 31, 2021		80,268		—		163,572		397,525		637,561		—		—		1,278,926
Derivative liabilities recognized at grant date		—		—		—		—		—		3,313,864		248,541		3,562,405
Change in fair value of derivative liabilities		(13,968)		—		(50,088)		(111,794)		(186,202)		1,610,545		120,791		1,369,284
Fair value of warrants exercised		(45,674)		—		—		—		—		—		—		(45,674)
BALANCE as of June 30, 2021 (Unaudited)	$	20,626	$	—	$	113,484	$	285,731	$	451,359	$	4,924,409	$	369,332	$	6,164,941


	June 20, 2019									August 4, 2020			February 10, 2021						May 13, 2021
	Series A			Series B			Placement Agent			Underwriters'			Placement Agent			ROFR			Investor			Placement Agent
	Warrants			Warrants			Warrants			Warrants			Warrants			Warrants			Warrants			Warrants
# of shares exercisable		1,336,021			1,116,320			142,509			568,000			380,435			152,174			5,531,916			414,894
Valuation date		6/20/2019			6/20/2019			6/20/2019			8/4/2020			2/10/2021			2/10/2021			5/13/2021			5/13/2021
Exercise price	$	3.72		$	3.72		$	3.38		$	0.63		$	1.38		$	1.73		$	1.05		$	1.05
Stock price	$	2.80		$	2.80		$	2.80		$	0.51		$	1.63		$	1.63		$	0.72		$	0.72
Expected term (years)		4			1			4			5			5			5			5			5
Risk-free interest rate		1.77	%		1.91	%		1.77	%		0.19	%		0.46	%		0.46	%		0.84	%		0.84	%
Expected volatility		86	%		91	%		86	%		129	%		132	%		132	%		131	%		131	%


	As of June 30, 2021
Granted Date	June 20, 2019						August 4, 2020			February 10, 2021						May 13, 2021
	Series A			Placement Agent			Underwriters'			Placement Agent			ROFR			Investor			Placement Agent
	Warrants			Warrants			Warrants			Warrants			Warrants			Warrants			Warrants
# of shares exercisable		25,902			142,509			318,080			380,435			152,174			5,531,916			414,894
Valuation date		6/30/2021			6/30/2021			6/30/2021			6/30/2021			6/30/2021			6/30/2021			6/30/2021
Exercise price	$	0.50		$	0.50		$	0.63		$	1.38		$	1.73		$	1.05		$	1.05
Stock price	$	1.05		$	1.05		$	1.05		$	1.05		$	1.05		$	1.05		$	1.05
Expected term (years)		1.97			1.97			4.10			4.62			4.62			4.87			4.87
Risk-free interest rate		0.24	%		0.24	%		0.69	%		0.79	%		0.79	%		0.84	%		0.84	%
Expected volatility		129	%		129	%		129	%		129	%		129	%		129	%		129	%


	As of March 31, 2021
Granted Date	June 20, 2019						August 4, 2020			February 10, 2021
				Placement						Placement
	Series A			Agent			Underwriters'			Agent			ROFR
	Warrants			Warrants			Warrants			Warrants			Warrants
# of shares exercisable		69,931			142,509			318,080			380,435			152,174
Valuation date		3/31/2021			3/31/2021			3/31/2021			3/31/2021			3/31/2021
Exercise price	$	0.5		$	0.5		$	0.63		$	1.38		$	1.73
Stock price	$	1.40		$	1.40		$	1.40		$	1.40		$	1.40
Expected term (years)		2.22			2.22			4.35			4.87			4.87
Risk-free interest rate		0.20	%		0.20	%		0.73	%		0.88	%		0.88	%
Expected volatility		132	%		132	%		132	%		132	%		132	%


	June 30,		March 31,
	2021		2021
	(Unaudited)
Minimum lease payments receivable	$	1,094,480	$	1,343,662
Less: Unearned interest		(255,113)		(328,585)
Financing lease receivables, net	$	839,367	$	1,015,077
Finance lease receivables, net, current portion	$	501,482	$	541,605
Finance lease receivables, net, non-current portion	$	337,885	$	473,472


	Minimum future payments
	receivable
Twelve months ending June 30, 2022	$	581,610
Twelve months ending June 30, 2023		391,806
Twelve months ending June 30, 2024		113,870
Twelve months ending June 30, 2025		7,194
Total	$	1,094,480


Categories		Useful life
Leasehold improvements		Shorter of the remaining lease terms or estimated useful lives
Computer equipment		2 - 5 years
Office equipment		3 - 5 years
Automobiles		3 - 5 years


Categories		Useful life
Software		5-10 years
Online ride-hailing platform operating license		5 years


	Fair value
Purchase consideration paid	$	472,573
Fair value of non-controlling interest		326,570
Less: fair value of nets assets of XXTX:
Cash and cash equivalents		105,386
Other current assets		525,005
Plant and equipment		790
Intangible assets		265,536
Total assets		896,717
Total liabilities		(230,247)
Total fair value of net assets of XXTX		666,470
Goodwill as of the acquisition date		132,673
Effect of exchange rate changes on goodwill		4,717
Less: impairment loss of goodwill		(137,390)
Goodwill as of June 30, 2021	$	—


	June 30,		March 31
	2021		2021
	(Unaudited)
Receivables of automobile sales due from automobile purchasers	$	539,793	$	760,126
Receivables of service fees due from automobile purchasers		314,360		731,962
Receivables of online ride hailing fees from online ride-hailing drivers		246,929		162,197
Receivables of operating lease		383,268		170,707
Less: Unearned interest		(28,323)		(40,447)
Less: Allowance for doubtful accounts		(60,210)		(78,167)
Accounts receivable, net	$	1,395,817	$	1,706,378

Accounts receivable, net, current portion	$	1,284,226	$	1,437,195
Accounts receivable, net, non-current portion	$	111,591	$	269,183


	Amortization
	expenses
Twelve months ending June 30, 2022	$	149,370
Twelve months ending June 30, 2023		149,372
Twelve months ending June 30, 2024		141,242
Twelve months ending June 30, 2025		135,331
Twelve months ending June 30, 2026		78,557
Thereafter		281,250
Total	$	935,122


Warrants	$	3,562,404
Common stock		2,208,649
Total net proceeds	$	5,771,053


			Weighted		Average
			Average		Remaining
	Warrants	Warrants	Exercise		Contractual
	Outstanding	Exercisable	Price		Life
Balance, March 31, 2020	1,519,602	1,519,602	$	1.76	3.21
Granted	1,100,609	1,100,609	$	1.48	5.00
Forfeited	(3,132)	(3,132)		—	—
Exercised	(1,516,010)	(1,516,010)		—	—
Balance, March 31, 2021	1,101,069	1,101,069	$	1.16	4.09
Granted	5,946,810	5,946,810	$	1.05	5.00
Forfeited	—	—		—	—
Exercised	(44,029)	(44,029)		—	—
Balance, June 30, 2021 (Unaudited)	7,003,850	7,003,850	$	1.07	4.77


	For the Three Months ended
	June 30
	2021		2020
	(Unaudited)		(Unaudited)
Current income tax expenses	$	—	$	6,272
Deferred income tax benefits		—		—
Total income tax expenses	$	—	$	6,272


		For the Three Months ended
	Classification	June 30, 2021		June 30, 2020
		(Unaudited)		(Unaudited)
Operating lease cost
Lease expenses	Selling, general and administrative	$	144,199	$	106,196
Finance lease cost
Amortization of leased asset	Cost of revenue		820,902		276,519
Amortization of leased asset	Selling, general and administrative		247,157		533,382
Interest on lease liabilities	Interest expenses on finance leases		107,639		226,177
Total lease expenses		$	1,319,897	$	1,142,274


			Finance
	Operating lease		lease
	payments		payments		Total
Twelve months ending June 30, 2022	$	525,756	$	6,628,378	$	7,154,134
Twelve months ending June 30, 2023		392,813		618,497		1,011,310
Twelve months ending June 30, 2024		232,178		—		232,178
Twelve months ending June 30, 2025		66,417		—		66,417
Twelve months ending June 30, 2026		29,519		—		29,519
Total lease payments		1,246,683		7,246,875		8,493,558
Less: discount		(66,811)		(317,646)		(384,457)
Present value of lease liabilities	$	1,179,872	$	6,929,229	$	8,109,101


	For the Three Months ended June 30, 2021
			Online ride-
	Automobile		hailing
	Transaction and		platform
	Related Services		Services		Unallocated		Consolidated
Revenues	$	1,807,724	$	42,351	$	—	$	1,850,075
Loss from operations	$	(1,256,182)	$	(4,148,967)	$	(417,209)	$	(5,822,358)
Loss before income taxes	$	(1,398,030)	$	(4,186,248)	$	(1,786,358)	$	(7,370,636)
Net loss	$	(1,398,030)	$	(4,186,248)	$	(1,786,358)	$	(7,370,636)


	Three Months Ended June 30
		2021			2020
		Number of	Revenue		Number of	Revenue
		Vehicles	(Approximate)		Vehicles	(Approximate)
Operating Leases		>1,700	$	1,485,000	>700		408,000
Financing Leases		131	$	46,000	109	$	42,000
Sales		—	$	—	27	$	340,000
Facilitation		—	$	—	42	$	87,000
Other Services		>1,500	$	277,000	>2,400	$	269,000


	For the
	Three Months Ended
	June 30,
	2021		2020		Change
	(unaudited)		(unaudited)
Revenues	$	1,850,075	$	1,146,916	$	703,159
Cost of revenues		(3,779,346)		(800,256)		(2,979,090)
Gross profit (loss)		(1,929,271)		346,660		(2,275,931)
Operating expenses
Selling, general and administrative expenses		(3,683,277)		(1,960,425)		(1,722,852)
Provision for doubtful accounts		(45,553)		(128,612)		83,059
Impairments of long-lived assets and goodwill		(164,257)		—		(164,257)
Total operating expenses		(3,893,087)		(2,089,037)		(1,804,050)
Loss from operations		(5,822,358)		(1,742,377)		(4,079,981)
Other expense, net		(56,659)		(6,076)		(50,583)
Interest expense		(14,696)		(20,648)		5,952
Interest expense on finance leases		(107,639)		(226,177)		118,538
Change in fair value of derivative liabilities		(1,369,284)		(282,980)		(1,086,304)
Loss before income taxes		(7,370,636)		(2,278,258)		(5,092,378)
Income tax expenses		—		(6,272)		6,272
Net loss	$	(7,370,636)	$	(2,284,530)	$	(5,086,106)


Exhibit No.		Description

3.1*		Amendment to Bylaws, effective as of August 12, 2021

31.1*		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document


	Senmiao Technology Limited

Dated: August 16, 2021	By:	/s/ Xi Wen
		Name:	Xi Wen
		Title:	Chief Executive Officer
		(Principal Executive Officer)

Dated: August 16, 2021	By:	/s/ Xiaoyuan Zhang
		Name:	Xiaoyuan Zhang
		Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)