Senmiao Technology Reports Fiscal 2024 First Quarter Financial Results

CHENGDU,China,Aug. 15,2023 -- Senmiao Technology Limited ("Senmiao") (Nasdaq: AIHS),a financing and servicing company focused on the online ride-hailing industry in China,as well as an operator of its own online ride-hailing platform,today announced financial results for its fiscal 2024 first quarter ended June 30,2023.

Fiscal 2024 First Quarter Financial and Operating Highlights

Total revenues of $2.1 million,compared to $2.3 million in the prior-year period,primarily due to lower revenues from online ride-hailing platform services as a result of increased competition.

From October 23,2020,the date Senmiao launched its online ride-hailing platform,to June 30,2023,approximately 31.9 million rides were completed (including orders completed on the platform operated by Senmiao and on partner platforms),with fares paid by riders totaling $103.1 million. As of August 14,Senmiao has operations in 26 cities in China,including Chengdu,Changsha and Guangzhou.

Loss from operations narrowed to $0.8 million,from $1.4 million in the prior-year period.

Net loss was $0.4 million,compared to net income of $0.2 million in the prior-year period,primarily due to a $1.3 million decrease in change in fair value of derivative liabilities.

Management Commentary

Xi Wen,Chairman,Chief Executive Officer and President of Senmiao,stated,"We were pleased to have achieved stable revenues for the first quarter of fiscal year 2024 ended June 30,despite increased competition in the online ride-hailing market in the major cities in which we operate. As a result of our strategic decision to utilize more NEVs,we successfully lowered cost of services,and were able to improve gross profit by 26.5% to $0.6 million. Our ongoing efforts to streamline our operations resulted in a 35.2% decrease in SG&A expenses from the prior-year period,which is critical as we work toward achieving sustainable profitability. While our online ride-hailing platform services business has been impacted by mounting competition in the near term,we remain optimistic about our ability to capture additional market share as travelling and commuting continue to recover in our core markets. This line of business complements our other major line of business,such as automobile rentals,and we continue to see a good amount of interest from drivers who want to lease their vehicles from Senmiao. As of June 30,we have helped facilitate nearly 32 million rides in 26 cities where we operate in China,and we will continue to pursue opportunities to expand our business through local partnerships,both in terms of scope and geography."

Financial Review

Revenues

Total revenues were $2.1 million for the fiscal first quarter ended June 30,compared to $2.3 million in the prior-year period. During the quarter ended June 30,the automobile rental business generated operating lease revenues of $1.1 million,compared to $0.9 million in the prior-year period,primarily due to the increased average utilization of the rented automobiles from 60.7% to 79.8%. The online ride-hailing platform services business generated revenues of $0.9 million,compared to $1.2 million in the prior-year period,mainly due to increased market competition during the period.

Cost of Revenues

Cost of revenues decreased 19.6% to $1.5 millionfor the fiscal first quarter endedJune 30,from$1.9 millionin the prior-year period,primarily due to decreased costs of automobiles under operating leases,decreased maintenance and insurance expense related to the automobile rental business as Senmiao used more NEVs during the period,as well as decreased direct expense and technical service fees for the online ride-hailing platform services business as a result of fewer completed orders,and decreased costs of automobile sold during the period.

Gross Profit

Gross profit was$0.6 million for the quarter endedJune 30,an increase of 26.5% from $0.5 million in the prior-year period. The increase was primarily due to increased gross profit from Senmiao's automobile rental business,partially offset by decreased gross profit from online ride-hailing platform services.

Selling,General and Administrative Expenses

Selling,general and administrative expenses decreased 35.2% to $1.2 million for the fiscal first quarter ended June 30,from $1.9 million in the prior-year period. The decrease was mainly attributable to the Company's continuous control on costs and ongoing initiatives to streamline its operations,which resulted in a $0.3 million decrease in salary and employee benefit expenses,decreased office expenditures and marketing expenses for the online ride-hailing platform,and other expense reductions.

Loss from Operations

Loss from operations for the fiscal first quarter ended June 30,2023 decreased to $0.8 million,compared to loss from operations of $1.4 million in the prior-year period. This was primarily due to the increased gross profit and $0.5 million decrease in total operating expenses.

Net Loss (Income)

Net loss for the fiscal first quarter ended June 30,was $0.4 million,primarily due to a $1.3 million decrease in change in fair value of derivative liabilities.

Loss (Earnings) per Share

Loss per diluted share for the fiscal first quarter ended June 30,was approximately $0.05 based on a weighted average number of basic and diluted common stock of 7.9 million,compared to earnings per diluted share of approximately $0.05 based on a weighted average number of basic and diluted common stock of 6.3 million in the prior-year period.

Financial Position

As ofJune 30,Senmiao had cash and cash equivalents of $1.2 million,compared to $1.6 million as of March 31,2023. Total stockholders' equity was $3.5 million as of June 30,compared to $4.4 million as of March 31,2023.

Additional information regarding Senmiao's results of operations for this quarterly periodcan be found in Senmiao's Quarterly Report on Form 10-Q for the quarter ended June 30,to be filed with the Securities and Exchange Commission on the date of this earnings release.

About Senmiao Technology Limited

Headquartered in Chengdu,Sichuan Province,Senmiao provides automobile transaction and related services including sales of automobiles,facilitation and services for automobile purchases and financing,management,operating leases,guarantees and other automobile transaction services,as well as operates its own ride-hailing platform aimed principally at the growing online ride-hailing market in Senmiao's areas of operation in China. For more information about Senmiao,please visit: http://www.senmiaotech.com. Senmiao routinely provides important updates on its website.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements (including those relating to the operation of Senmiao's ride-hailing platform) are subject to significant risks,uncertainties and assumptions,including those detailed from time to time in the Senmiao's filings with the SEC,and represent Senmiao's views only as of the date they are made and should not be relied upon as representing Senmiao's views as of any subsequent date. Senmiao undertakes no obligation to publicly revise any forward-looking statements to reflect changes in events or circumstances.

For more information,please contact:

At the Company:

Yiye Zhou

Email: edom333@ihongsen.com

Phone: +86 28 6155 4399

Investor Relations:

The Equity Group Inc. In China

Carolyne Sohn,Vice President Lucy Ma,Associate

+1 408-538-4577 +86 10 5661 7012

csohn@equityny.com lma@equityny.com

Alice Zhang,Associate

+1 212-836-9610

azhang@equityny.com

© 2023 Senmiao Technology Ltd. All rights reserved.

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. dollars,except for the number of shares)

June30,

March31,

2023

2023

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

1,173,795

$

1,610,090

Accounts receivable

126,760

158,435

Accounts receivable,a related party

4,551

6,312

Inventories

—

6,678

Finance lease receivables,current portion

136,296

146,114

Prepayment,other receivables and other assets,net

1,375,122

1,438,243

Prepayments - a related party

147,312

—

Due from related parties,net,current portion,

1,830,943

1,488,914

Total current assets

4,794,779

4,854,786

Property and equipment,net

3,229,848

3,343,457

Other assets

Operating lease right-of-use assets,net

106,638

121,672

Operating lease right-of-use assets,related parties

395,624

92,916

Financing lease right-of-use assets,net

530,796

623,714

Intangible assets,net

717,954

774,324

Finance lease receivables,non-current

92,497

71,133

Due from a related party,non-current

3,035,085

3,640,206

Other non-current assets

637,127

716,407

Total other assets

5,515,721

6,040,372

Total assets

$

13,540,348

$

14,238,615

LIABILITIES,MEZZANNIE EQUITY AND EQUITY

Current liabilities

Borrowings from a financial institution

$

2,733

$

8,813

Accounts payable

273,685

183,645

Advances from customers

171,273

148,188

Accrued expenses and other liabilities

3,597,397

3,377,507

Due to a related party

—

8,667

Operating lease liabilities

31,029

60,878

Operating lease liabilities - related parties

296,508

143,462

Financing lease liabilities

231,110

264,052

Derivative liabilities

197,609

501,782

Current liabilities - discontinued operations

462,016

487,829

Total current liabilities

5,263,360

5,184,823

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Expressed in U.S. dollars,

2023

2023

(Unaudited)

Other liabilities

Operating lease liabilities,non-current

69,680

83,485

Operating lease liabilities,non-current - related parties

235,772

42,247

Financing lease liabilities,non-current

308,484

388,064

Deferred tax liability

40,658

42,930

Total other liabilities

654,594

556,726

Total liabilities

5,917,954

5,741,549

Commitments and contingencies (note 19)

Mezzanine Equity

Series A convertible preferred stock (par value $1,000 per share,5,000 shares authorized;

1,141 and 1,641 shares issued and outstanding at June 30,2023 and March 31,

respectively)

242,447

269,386

Stockholders' equity

Common stock (par value $0.0001 per share,500,000,000 shares authorized; 7,993,040 and

7,743,040 shares issued and outstanding at June 30,respectively)

798

773

Additional paid-in capital

43,382,748

43,355,834

Accumulated deficit

(38,143,122)

(37,715,294)

Accumulated other comprehensive loss

(1,236)

(1,247,099)

Total Senmiao Technology Limited stockholders' equity

3,497,188

4,394,214

Non-controlling interests

3,882,759

3,833,466

Total equity

7,379,947

8,227,680

Total liabilities,mezzanine equity and equity

$

13,615

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in U.S. dollars,except for the number of shares)

For the Three Months Ended June30

2023

2022

(Unaudited)

(Unaudited)

Revenues

Revenues

$

2,080,966

$

2,126,336

Revenues,a related party

13,748

215,460

Total revenues

2,094,714

2,341,796

Cost of revenues

Cost of revenues

(1,302,595)

(1,835,474)

Cost of revenues,a related party

(210,179)

(46,342)

Total cost of revenues

(1,512,774)

(1,881,816)

Gross profit

581,940

459,980

Operating expenses

Selling,general and administrative expenses

(1,243,289)

(1,919,347)

Recovery of (allowance for) credit losses

(127,073)

21,857

Impairments of inventories

—

(3,085)

Total operating expenses

(1,370,362)

(1,900,575)

Loss from operations

(788,422)

(1,440,595)

Other income (expense)

Other income,net

72,149

63,153

Interest expense

(525)

—

Interest expense on finance leases

(8,722)

(7,148)

Change in fair value of derivative liabilities

304,173

1,628,510

Total other income,net

367,075

1,684,515

Income (loss) before income taxes

(421,347)

243,920

Income tax expense

—

—

Net income (loss)

(421,920

Net loss (income) attributable to non-controlling interests from operations

(6,481)

88,933

Net income (loss) attributable to the Company's stockholders

$

(427,828)

$

332,853

Net income (loss)

$

(421,347)

$

243,920

SENMIAO TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (CONTINUED)

(Expressed in U.S. dollars,except for the number of shares)

For the Three Months Ended June30

2023

2022

(Unaudited)

(Unaudited)

Other comprehensive loss

Foreign currency translation adjustment

(453,325)

(785,653)

Comprehensive loss

(874,672)

(541,733)

less: Total comprehensive income (loss) attributable to noncontrolling interests

49,293

(90,748)

Total comprehensive loss attributable to stockholders

$

(923,965)

$

(450,985)

Weighted average number of common stock

Basic and diluted

7,891,392

6,305,252

Net earnings (loss) per share - basic and diluted

$

(0.05)

$

0.05

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollars,except for the number of shares)

For the Three Months Ended June 30,

2023

2022

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities:

Net income (loss)

$

(421,920

Adjustments to reconcile net income (loss) to net cash provided by operating

activities:

Depreciation of property and equipment

234,972

288,547

Amortization of right-of-use assets

109,620

218,446

Amortization of intangible assets

34,837

45,716

Recovery of (allowance for) credit losses

127,073

(21,857)

Impairments of inventories

—

3,085

Gain on disposal of equipment

(22,665)

9,144

Change in fair value of derivative liabilities

(304,173)

(1,510)

Change in operating assets and liabilities

Accounts receivable

24,083

16,836

Accounts receivable,a related party

1,476

—

Inventories

6,540

47,478

Finance lease receivables

50,441

134,210

Prepayments,other receivables and other assets

(11,895)

614,373

Prepayment - a related party

(152,317)

—

Accounts payable

103,147

(11,720)

Advances from customers

31,977

16,683

Accrued expenses and other liabilities

418,687

559,610

Operating lease liabilities

(37,238)

(9,137)

Operating lease liabilities - related parties

11,648

(12,685)

Net Cash Provided by Operating Activities

204,866

514,139

Cash Flows from Investing Activities:

Purchases of property and equipment

(379,658)

(497)

Proceeds from sales of equipment

49,592

25,739

Purchases of intangible assets

—

(910)

Net Cash Provided by (Used in) Investing Activities

(330,066)

24,332

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Expressed in U.S. dollars,

2023

2022

(Unaudited)

(Unaudited)

Cash Flows from Financing Activities:

Repayments to related parties and affiliates

(160,850)

—

Borrowings from related parties and affiliates

—

349,704

Repayments of borrowings from a financial institution

(5,805)

(46,520)

Principal payments of finance lease liabilities

(80,667)

(132,111)

Net Cash Provided by (Used in) Financing Activities

(247,322)

171,073

Effect of exchange rate changes on cash and cash equivalents

(63,773)

(40,427)

Net increase (decrease) in cash and cash equivalents

(436,295)

669,117

Cash and cash equivalents,beginning of the year

1,090

1,185,221

Cash and cash equivalents,end of the year

$

1,338

Supplemental Cash Flow Information

Cash paid for interest expense

$

525

$

—

Non-cash Transaction in Investing and Financing Activities

Recognition of right-of-use assets and lease liabilities

$

356,859

$

155,329

Recognition of right-of-use assets and lease liabilities,related parties

$

—

$

65,817