Senmiao Technology Announces Unaudited Financial Results for First Quarter of Fiscal Year 2020

CHENGDU,China,Aug. 15,2019 -- Senmiao Technology Limited (NASDAQ: AIHS) ("Senmiao"),a provider of automobile transaction and related services and an operator of an online lending marketplace connecting Chinese investors with individual and small-to-medium-sized enterprise borrowers in China,today announced its unaudited financial results for the quarter ended June 30,2019.

First Quarter of Fiscal 2020 Highlights

Total revenues increased by 3,975% year-over-year to $5,094,440 from $125,026

Gross profit increased by 758% year-over-year to $1,072,128 from $125,026

Loss per share decreased by 50% year-over -year to $0.02 from $0.04

"We had a great start to our fiscal year 2020 with a strong performance from our automobile transaction and related services business during the first quarter. Thanks to the Ruixi acquisition that gave us a unique opportunity to capitalize on the growing ride-sharing market in 2nd and 3rd tier cities in China,like Chengdu and Changsha,we are very pleased with the continued momentum in automobile transaction and related services," commented Xi Wen,Chairman,Chief Executive Officer and President of Senmiao. "With revenues more than doubled and turning a profit from the prior quarter,our automobile transaction and related services continued to drive the overall growth of both top- and bottom-lines of the Company and our strategic transformation from a single revenue stream online lending marketplace to a more diversified financial services company. We are optimistic about the growth prospects of our business and looking forward to improving financial performances in coming quarters."

Revenues

Total revenues were $5,440 for the quarter ended June 30,2019,an increase of $4,969,414,or 3,975% as compared with the quarter ended June 30,2018,primarily due to Senmiao's significant ramp up of its automobile transaction and related services business.

Revenue from automobile transaction and related services was $5,012,563,accounting for 98.4% of total revenue. This compares with $2,432,371 in the fourth quarter of the previous year when Senmiao commenced its automobile transaction and related services business in late November 2018.

Revenue from online lending services decreased by $43,149 during the quarter ended June 30,as compared to the quarter ended June 30,as Senmiao continued to focus on its compliance review and did not actively seek to expand its online lending business. Revenue from online lending services accounted for 1.6% of total revenue,down from 100.0% a year ago.

Cost of Revenues

Cost of revenues was $4,022,312 for the quarter ended June 30,2019. Senmiao did not incur cost of revenues during the same period last year as it only provided online lending services which did not incur any cost of revenues.

Gross Profit

Gross profit was $1,128 for the quarter ended June 30,2019 compared to $125,026 during the same period last year mainly due to the increase in gross profit of $990,251 from automobile transaction and related services,partially offset by a decrease of $43,149 from online lending services.

Selling,General and Administrative Expenses

Selling,general and administrative expenses were $1,453,074 for the quarter ended June 30,2019 compared to $972,269 during the same period last year,an increase of 49.5%. The increase was attributable to the selling,general and administrative expenses of $573,692 incurred by the automobile transaction and related services.

Net Loss

Net loss for the quarter ended June 30,2019 was $505,compared to a net loss of $930,364 during the same period last year.

Senmiao achieved a net income of $290,351 from its automobile transaction and related services and a net loss of $453,270 from its online lending services for the quarter ended June 30,2019.

Financial Position

As of June 30,Senmiao had cash and cash equivalents of $5,438,125 as compared to $5,020,510 as of March 31,2019.

Recent Developments

On June 21,Senmiao closed a registered direct public offering of common stock and warrants pursuant to its registration statement on Form S-3,as supplemented,for total gross proceeds of $6.0 million. The offering price of the shares sold in the offering was $3.38 per share. After deducting placement agent fees and offering expenses,the aggregate net proceeds received by Senmiao totaled approximately $5.1 million.

About Senmiao

Headquartered in Chengdu,Sichuan Province,Senmiao provides automobile transaction and related services including sales of automobiles,facilitation and services for automobile purchase and financing,management,guarantee and other automobile transaction services. Senmiao also operates an online lending platform,which connects Chinese investors with individual and small-to-medium-sized enterprise borrowers. For more information about Senmiao,please visit: http://www.senmiaotech.com.

Cautionary Note Regarding Forward-Looking Statements

This press release of Senmiao contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the development of Senmiao's automobile transaction and related services and online lending services,the Chinese ride-sharing and automobile financial leasing markets,the Chinese online marketplace lending industry and Senmiao's plans,objectives,goals,strategies,and performance,as well as the assumptions such statements and other statements that are not statements of historical facts. When Senmiao uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters,it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from Senmiao's expectations,including,but not limited to,risks and uncertainties relating to the following: the risk that the anticipated growth of Senmiao's automobile transaction and related services may not be realized; Senmiao's future business development; product and service demand and acceptance; changes in technology; economic conditions; reputation and brand; the impact of competition and pricing; the impact of government regulations; fluctuations in general economic and business conditions in China and other risks expressed in reports filed by Senmiao with the U.S. Securities and Exchange Commission. For these reasons,among others,investors are cautioned not to place undue reliance on any forward-looking statements. Senmiao's filings with the U.S. Securities and Exchange Commission are available for review at www.sec.gov. 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:

Julie Zhu

Email: julie@ihongsen.com

Phone: +86 181-9085-0098

Investor Relations:

Linda Bergkamp

Christensen

Email: lbergkamp@ChristensenIR.com

Phone: +1 480 614 3004

SENMIAO TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

June 30,

March 31,

2019

2019

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

5,125

$

5,510

Accounts receivable,net

1,849,418

326,181

Inventories

2,536,026

1,508,244

Finance lease receivables,net,current portion

270,156

10,254

Prepayments,receivables and other assets,net

4,164,628

3,793,468

Escrow receivable due within one year

600,000

600,000

Due from related parties

150,595

140,498

Total Current Assets

15,008,948

11,399,155

Property and equipment,net

470,408

125,885

Other Assets

Right-of-use assets

342,549

-

Intangible assets,net

315,130

296,091

Prepayment for intangible assets

745,628

470,706

Accounts receivable

389,980

-

Finance lease receivables,net

581,980

22,298

Total Other Assets

2,375,267

789,095

Total Assets

$

17,854,623

$

12,314,135

LIABILITIES AND EQUITY

Current Liabilities

Borrowings from financial institutions

$

214,213

$

219,157

Borrowings from third parties

145,628

476,765

Accounts payable

446,109

-

Advance from customers

106,796

38,996

Income tax payable

117,400

21,905

Accrued expenses and other liabilities

1,857,802

1,500,803

Due to stockholders

1,031,159

1,080,047

Due to related parties and affiliates

551,962

415,931

Lease liabilities

191,340

-

Derivative liabilities

4,156,147

-

Total Current Liabilities

8,818,556

3,753,604

Other Liabilities

Borrowings from financial institutions,noncurrent

126,375

177,789

Lease liabilities,non current

129,232

-

Total Other Liabilities

255,607

177,789

Total liabilities

9,074,163

3,931,393

Commitments and Contingencies

Stockholders' Equity

Common stock (par value $0.0001 per share,100,000,000 shares authorized; 27,726,616 and 25,945,255 shares issued and outstanding at June 30,2019 and March 31,respectively)

2,773

2,595

Additional paid-in capital

24,822,307

23,833,112

Accumulated deficit

(15,609,898)

(15,538)

Accumulated other comprehensive loss

(486,718)

(428,771)

Total Stockholders' Equity

8,728,464

8,398

Noncontrolling interests

51,996

7,344

Total Equity

8,780,460

8,382,742

Total Liabilities and Equity

$

17,135

SENMIAO TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

For the Three Months Ended June 30

2019

2018

(Unaudited)

(Unaudited)

Revenues

$

5,440

$

125,026

Cost of revenues

(4,312)

-

Gross profit

1,128

125,026

Operating expenses

Selling,general and administrative expenses

(1,074)

(972,269)

Amortization of intangible assets

(15,152)

(86,297)

Total operating expenses

(1,468,226)

(1,058,566)

Loss from operations

(396,098)

(933,540)

Other income (expense)

Other (expense) income,net

32,242

3,176

Interest expense

(37,039)

-

Change in fair value of derivative liabilities

(3,396)

-

Total other income (expense),net

(8,193)

3,176

Loss before income taxes

(404,291)

(930,364)

Income tax expenses

(101,141)

-

Net loss

(505,432)

(930,364)

Less: Net income attributable to noncontrollling interests

(72,928)

-

Net loss attributable to stockholders

$

(578,360)

$

(930,364)

Net loss

$

(505,432)

$

(930,364)

Other comprehensive loss

Foreign currency translation adjustment

(86,223)

(48,735)

Comprehensive loss

(591,655)

(979,099)

Less: Total comprehensive income attributable to noncontrolling interests

44,652

-

Total comprehensive loss attributable to stockholders

$

(636,307)

$

(979,099)

Weighted average number of common stock

Basic and diluted

26,121,433

25,879,400

Loss per share

Basic and diluted

$

(0.02)

$

(0.04)

SENMIAO TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

For the Three months ended June 30,

2019

2018

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities:

Net loss

$

(505,364)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization of property and equipment

25,522

1,882

Amortization of right-of-use assets

41,326

Amortization of intangible assets

15,152

86,297

Provision for doubtful accounts

31,638

-

Change in fair value of derivative liabilities

3,396

-

Change in operating assets and liabilities

Accounts receivable

(1,949,620)

(44,967)

Inventories

(1,068,512)

-

Prepayments,receivables and other assets

(475,354)

24,241

Finance lease receivables

(825,500)

-

Accounts payable

448,927

-

Advances from customers

69,114

-

Income tax payable

96,593

-

Accrued expenses and other liabilities

389,180

(54,959)

Lease liabilities

(58,238)

-

Net Cash Used in Operating Activities

(3,761,808)

(917,870)

Cash Flows from Investing Activities:

Purchases of property and equipment

(375,077)

(11,918)

Purchase of intangible assets

-

(21,951)

Prepayment of intangible assets

(320,000)

-

Net Cash Used in Investing Activities

(695,077)

(33,869)

Cash Flows from Financing Activities:

Net proceeds from issuance of common stock in registered direct offering

5,142,124

-

Proceeds borrowed from stockholders

-

605,056

Repayments to stockholders

-

(500,784)

Borrowings from third parties

(322,406)

-

Borrowings from related parties and affiliates

168,898

-

Repayments of current borrowings from financial institutions

(47,703)

-

Net Cash Provided by Financing Activities

4,940,913

104,272

Effect of exchange rate changes on cash and cash equivalents

(66,413)

(42,412)

Net increase (decrease) in cash and cash equivalents

417,615

(889,879)

Cash and cash equivalents,beginning of period

5,510

11,141,566

Cash and cash equivalents,end of period

$

5,125

$

10,251,687

Supplemental Cash Flow Information

Cash paid for interest expense

$

37,039

$

-

Cash paid for income tax

$

-

$

-

Non-cash Transaction in Investing and Financing Activities

Unpaid property and equipment purchases

$

-

$

6,526

IPO expenses paid by the Company's stockholders

$

-

$

70,687

Right-of-use assets obtained in exchange of operating lease liabilities

$

386,039

$

-

Intangible assets received from prepayment

$

41,033

$

-

Allocation of fair value of derivative liabilities from issuance of common stock proceeds

$

4,152,751

$

-

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