Senmiao Technology Announces Unaudited Financial Results for its Second Fiscal Quarter Ended September 30, 2019

CHENGDU,China,Nov. 15,2019 --Senmiao Technology Limited (NASDAQ: AIHS) ("Senmiao"),a provider of automobile transaction and related services in China,today announced its unaudited financial results for its second fiscal quarter ended September 30,2019.

Second Quarter of Fiscal 2020 Highlights

Total revenues increased by 8,180% year-over-year to $5,921,166 from $71,508

Gross profit increased by 1,595% year-over-year to $1,211,982 from $71,508

Earnings per share of $0.04 versus loss per share of $0.03 in same period last year

"We have continued to capitalize on our late 2018 acquisition and subsequent development of our automobile transaction and related services business. Through our business development efforts,we have taken major steps to restructure our business to better diversify and streamline our revenue streams as we wind down our online peer-to-peer lending business,and our efforts have led to another strong quarterly performance," commented Xi Wen,Chairman,Chief Executive Officer and President of Senmiao. "With our automobile transaction and related services business now accounting for almost all of our revenue,our main focus is to continue to ramp up these operations as the ride-sharing market in our areas of operation expands,particularly in the second and third tier cities in China. These developments have placed our business in an outstanding position as we posted positive earnings per share this quarter,the first since our listing on the Nasdaq last year. We believe we have laid the foundation to continue our growth as we focus on other complimentary opportunities for expanding our business."

Revenues

Total revenue was $5,166 for the quarter ended September 30,2019,an increase of $5,849,658,or 8,180% as compared with the quarter ended September 30,2018,primarily due to Senmiao's significant ramp up of its automobile transaction and related services business (the "Auto Business").

Revenue from the Auto Business was $5,885,287,accounting for 99.4% of total revenue. This compares with $2,432,371 in the fourth quarter of the previous fiscal year and $5,012,563 in the first quarter of the current fiscal year,reflecting two consecutive quarters of strong growth in the Auto Business.

Revenue from online lending services decreased by $35,629 during the quarter ended September 30,2019 as Senmiao formally commenced the winding down of that business in response to the changing regulatory environment in China. Senmiao will no longer generate revenue from the online lending business. Revenue from online lending services only accounted for 0.6% of total revenue for the quarter ended September 30,a significant shift from 100% a year ago,as Senmiao proactively restructured operations in order to position itself for future sustainable growth.

Cost of Revenues

Cost of revenues was $4,709,184 for the quarter ended September 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 $1,982 for the quarter ended September 30,2019 as compared to $71,508 during the same period last year mainly due to the gross profit of $1,176,103 from the Auto Business,partially offset by a decrease of $35,629 from online lending services.

Selling,General and Administrative Expenses

Selling,general and administrative expenses were $1,738,335 for the quarter ended September 30,2019 as compared to $782,451 during the same period last year,an increase of 122%. The increase was mainly attributable to the selling,general and administrative expenses of $887,173 incurred by the Auto Business.

Change in Fair Value of Derivative Liabilities

The change in fair value of derivative liabilities amounted to $1,998,202,derived from change of the fair values between September 30,2019 and June 30,2019 of the warrants issued in Senmiao's registered direct offering which closed on June 21,2019.

Net Income

Net income for the quarter ended September 30,2019 was $1,141,359 as compared to a net loss of $790,005 during the same period last year.

Senmiao achieved a net income of $141,365 from its Auto Business,a net loss of $729,345 from its online lending services for the quarter ended September 30,and a gain of $1,202 from the change in fair value of derivative liabilities.

Financial Position

As of September 30,Senmiao had cash and cash equivalents of $2,538,667 as compared to $5,020,510 as of March 31,2019.

Recent Developments

On October 17,the Board of Directors of Senmiao approved a plan submitted by management to wind down and discontinue Senmiao's online lending services.

In accordance with this plan,Senmiao has ceased facilitation of loan transactions on its online lending platform and began to assume all the outstanding loans from lenders on the platform. The aggregate balance of the loans Senmiao expects to assume is approximately $5.6 million. Senmiao expects to use cash generated from its Auto Business and payments collected from borrowers to fully repay all platform lenders by December 31,2020. As part of the plan,Senmiao expects to continue to employ certain employees who currently work on its online lending services,primarily the information technology staff,to provide a website design and development service for companies located in Chengdu City. Senmiao also plans to transfer approximately ten online lending services employees to focus on its Auto Business,and further expects to terminate certain employees of its online lending services by December 31,2020,but is unable to determine the number at this time.

For additional related information,please see Senmiao's Quarterly Report on Form 10-Q for the period ended September 30,which is being filed with the U.S. Securities and Exchange Commission today.

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 aimed principally at the growing ride-sharing market in Senmiao's areas of operation in China. Until October 2019,Senmiao also operated an online lending platform that 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 contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the development and winding down,respectively of Senmiao's Auto Business and online lending services,the Chinese ride-sharing and automobile financial leasing markets,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 Auto Business may not be realized; the risks associated with the winding down of Senmiao's online lending business; 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:

Yiye Zhou

Email: edom333@ihongsen.com

Phone: +86 28 6155 4399

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)

September 30,

March 31,

2019

2019

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

2,667

$

5,510

Accounts receivable,net

1,472,094

326,181

Inventories

2,195,382

1,508,244

Finance lease receivables,net,current portion

371,264

10,254

Prepayments,receivables and other assets,net

4,744,183

3,793,468

Escrow receivable due within one year

-

600,000

Due from related parties

136,590

140,498

Total Current Assets

11,458,180

11,399,155

Property and equipment,net

425,257

125,885

Other Assets

Right-of-use assets

842,413

-

Intangible assets,net

33,409

296,091

Prepayment for intangible assets

889,891

470,706

Accounts receivable,262,912

-

Finance lease receivables,net

733,269

22,298

Total Other Assets

3,761,894

789,095

Total Assets

$

15,645,331

$

12,314,135

LIABILITIES AND EQUITY

Current Liabilities

Borrowings from financial institutions

$

205,775

$

219,157

Borrowings from third parties

-

476,765

Accounts payable

162,142

-

Advance from customers

100,533

38,996

Income tax payable

105,254

21,905

Accrued expenses and other liabilities

1,727,219

1,500,803

Due to stockholders

125,428

1,080,047

Due to related parties and affiliates

668,697

415,931

Lease liabilities

323,564

-

Derivative liabilities

193,569

-

Total Current Liabilities

3,612,181

3,753,604

Other Liabilities

Borrowings from financial institutions,noncurrent

72,724

177,789

Lease liabilities,non current

448,327

-

Total Other Liabilities

521,051

177,789

Total liabilities

4,133,232

3,931,393

Commitments and Contingencies

Stockholders' Equity

Common stock (par value $0.0001 per share,100,000,000

shares authorized;28,691,356 and 25,945,255 shares

issued and outstanding at September 30,2019 and

March 31,respectively)

2,869

2,595

Additional paid-in capital

26,786,683

23,833,112

Accumulated deficit

-14,519,644

-15,031,538

Accumulated other comprehensive loss

-763,605

-428,771

Total Stockholders' Equity

11,506,303

8,375,398

Noncontrolling interests

5,796

7,344

Total Equity

11,512,099

8,382,742

Total Liabilities and Equity

$

15,135

SENMIAO TECHNOLOGY LIMITED

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

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

For the Three Months Ended

For the Six Months Ended

September 30,

September 30,

2019

2018

2019

2018

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Revenues

$

5,166

$

71,508

$

11,015,606

$

196,534

Cost of revenues

-4,184

-

-8,731,496

-

Gross profit

1,982

71,508

2,284,110

196,534

Operating expenses

Selling,general and administrative expenses

-1,335

-782,451

-3,191,407

-1,754,720

Amortization of intangible assets

-11,414

-86,791

-26,568

-173,088

Impairments of intangible assetsand goodwill

-266,534

-

-266,534

-

Total operating expenses

-2,016,283

-869,242

-3,484,509

-1,927,808

Loss from operations

-804,301

-797,734

-1,200,399

-1,274

Other income (expense)

Other (expense) income,net

-22,779

7,729

9,462

10,905

Interest expense

-25,306

-

-62,345

-

Change in fair value of derivative liabilities

1,202

-

1,994,806

-

Total other income,net

1,950,117

7,729

1,941,923

10,905

Income (loss) before income taxes

1,145,816

-790,005

741,524

-1,720,369

Income tax expenses

-4,457

-

-105,598

-

Net income (loss) before non-controlling interests

1,359

-790,005

635,926

-1,369

Less: Net income attributable to noncontrolling interests

-51,105

-

-124,033

-

Net income (loss) attributable to stockholders

$

1,090,254

$

-790,005

$

511,893

$

-1,369

Net income (loss)

$

1,359

$

-790,005

$

635,926

$

-1,369

Other comprehensive loss

Foreign currency translation adjustment

-374,192

-57,965

-460,415

-106,700

Comprehensive income (loss)

767,167

-847,970

175,511

-1,827,069

Less: Total comprehensive income attributable to noncontrolling interests

-46,200

-

-1,548

-

Total comprehensive income (loss) attributable to stockholders

$

813,367

$

-847,970

$

177,059

$

-1,069

Weighted average number of common stock

Basic

28,237,413

25,879,400

27,185,205

25,400

Diluted

28,430

25,212

25,400

Earnings (loss) per share

Basic

$

0.04

$

-0.03

$

0.02

$

-0.07

Diluted

$

0.04

$

-0.03

$

0.02

$

-0.07

SENMIAO TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

For the Six Months Ended

September 30,

2019

2018

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities:

Net income (loss)

$

635,369

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

Depreciation and amortization of property and equipment

56,016

4,897

Amortization of right-of-use assets

90,800

-

Amortization of intangible assets

26,568

173,088

Provision for doubtful accounts

166,558

-

Impairment loss of intangible assets

266,534

-

Loss on disposal of an equipment

4,621

-

Change in fair value of derivative liabilities

-1,806

-

Change in operating assets and liabilities

Accounts receivable

-2,606,829

-40,229

Inventories

-804,853

-

Prepayments,receivables and other assets

-1,311,125

31,418

Finance lease receivables

-1,109,277

-

Accounts payable

167,472

-

Advances from customers

66,019

-

Income tax payable

87,469

-

Accrued expenses and other liabilities

319,448

-30,524

Lease liabilities

-124,945

-

Net Cash Used in Operating Activities

-6,064,404

-1,581,719

Cash Flows from Investing Activities:

Purchases of property and equipment

-384,695

-27,271

Purchase of intangible assets

-

-42,472

Prepayment of intangible assets

-470,000

-

Net Cash Used in Investing Activities

-854,695

-69,743

Cash Flows from Financing Activities:

Net proceeds from issuance of common stock in registered direct offering

5,142,124

-

Net proceeds from issuance of common stock upon warrants exercised

96

-

Proceeds borrowed from stockholders

-

1,574,617

Repayments to stockholders

-870,249

-1,000

Repayments to third parties

-462,370

-

Borrowings from related parties and affiliates

1,177,651

-

Repayments to related parties and affiliates

-838,949

-

Repayments of current borrowings from financial institutions

-97,306

-

Release of escrow receivable

600,000

600,000

Net Cash Provided by Financing Activities

4,650,997

674,617

Effect of exchange rate changes on cash and cash equivalents

-213,741

-98,647

Net decrease in cash and cash equivalents

-2,481,843

-1,075,492

Cash and cash equivalents,beginning of period

5,510

11,566

Cash and cash equivalents,end of period

$

2,667

$

10,066,074

Supplemental Cash Flow Information

Cash paid for interest expense

$

62,345

$

-

Cash paid for income tax

$

-

$

-

Non-cash Transaction in Investing and Financing Activities

IPO expenses paid by the Company's stockholders

$

-

$

70,687

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

$

960,908

$

-

Intangible assets received from prepayment

$

40,457

$

-

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

$

3,150,006

$

-

Allocation of fair value of derivative liabilities to additional paid in capital upon warrants exercised

$

961,631

$

-

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