Senmiao Technology Announces Financial Results for Fiscal Year Ended March 31, 2020

CHENGDU,China,July 9,2020 -- Senmiao Technology Limited (NASDAQ: AIHS) ("Senmiao"),a provider of automobile transaction and related services targeting the ride-hailing industry in China,today announced its financial results for its full fiscal year ended March 31,2020.

Fiscal Year 2020 Highlights

Revenue from automobile transaction and related services business increased by 514% year-over-year to $15,655,575 from $2,551,107;

Revenue from sales of automobiles expanded to $11,536,691,up 535% from $1,815,425 in the prior year;

Gross profit from automobile transaction and related services business increased by 357% year-over-year to $3,375,337 from $738,920;

Number of facilitated new automobile purchase increased by 323% year-over-year to 1,315 from 311;

In Fiscal Year 2020,there were over 2,300 new drivers joining Senmiao's online ride-sharing business

"Although we faced a significantly weaker operating environment as a result of COVID-19 in our fiscal fourth quarter after maintaining profitability through the first nine months,we grew our streamlined automobile transaction and related services revenue by five-fold" commented Xi Wen,Chairman,Chief Executive Officer and President of Senmiao. "We continue to believe in the huge long-term market opportunity resulting from the rapid development of the onlineride-hailing service industry in China. Our near-term strategic business focus has shifted from the facilitation of automobile transactions and financing to providing more rentals of automobiles,and we are also streamlining expenses while the business environment improves. We are also actively exploring opportunities for new capital,such as our recently announced US$7 million financing transaction into our auto business operating entity in China,that will increase our ability to weather the downturn resulting from COVID-19 as well as competition and continue to expand our business in southwestern China. To summarize,we believe we are executing on our goal in becoming an outstanding and leading provider of automobile transaction and related services to the growing online ride-hailing eco-system inChina."

Revenues

Total revenue from Senmiao's automobile transaction and related services business (the "Auto Business") was $15,575 for the full fiscal year ended March 31,2020,an increase of $13,104,468,or 514% as compared with the fiscal year ended March 31,2019,primarily due to Senmiao's significant expansion of theAuto Business. The revenue excludes $112,440 in revenue from online lending services that is now a discontinued business.

The increase is attributed to Senmiao's business expansion in Chengdu and Changsha. Although,Senmiao believes there is huge market opportunity resulting from the rapid development of the online ride-hailing service market in China,due to impact of measures and restrictions to combat the COVID-19 nationwide epidemic in China,Senmiao experienced a decrease in its revenue from its Auto Business for the three months ended March 31,2020 as compared with the prior year.

Cost of Revenues

Cost of revenues was $12,280,238 for the full fiscal year ended March 31,2020. Cost of revenues increased by $10,051,or 578% during the year ended March 31,2020 as compared with the prior year and was attributed to the increase in the number of automobiles sold that increased from 212 to 1,176 as well as operating lease expenses in the year ended March 31,2020.

Gross Profit

Gross profit was $3,337. Gross profit from Auto Business increased by $2,636,417 or 357% during the year ended March 31,2020 as compared with the prior year mainly due to the business expansion and the increase in the number of facilitated new automobile purchases from the Auto Business.

Selling,General and Administrative Expenses

Selling,general and administrative expenses from Auto Business were $5,567,939 for the fiscal year ended March 31,2020 as compared to $1,776,690 during the prior year,representing an increase of $3,791,249. The increase was mainly attributable to the increased salary and employee benefits,advertising and promotion,amortization of automobiles,rental and other office expenses by the expansion of the Auto Business. Meanwhile,the selling,general and administrative expenses for the discontinued online lending services decreased to $1,365,733 for the fiscal year ended March 31,2020 from $2,242,905 for the fiscal year ended March 31,2019.

Change in Fair Value of Derivative Liabilities

The change in fair value of derivative liabilities resulted in a gain of $1,796,724,derived from change of the fair value between March 31,2020 and June 20,2019 of the warrants issued in Senmiao's registered direct offering in June 2019.

Net Loss

Total net loss for the full fiscal year ended March 31,2020 was $9,935,803 as compared to a net loss of $4,542,525 in the prior year. Net lossfrom Auto Business and discontinued online lending services for the full fiscal year ended March 31,2020 was $4,348,776 and $5,587,027 as compared with a net loss of $1,155,775 and $3,386,750,respectively,during the prior year.

Loss per share

Loss per share for Auto Business was $0.11 and $0.05 and loss per share for discontinued online lending services was $0.20 and $0.13,for the full fiscal years ended March 31,2020 and 2019.

Financial Position

As of March 31,Senmiao had cash and cash equivalents of $833,888as compared to $3,967,980 as of March 31,2019 for its Auto Business. Senmiao also had cash and cash equivalents of $10,139 as of March 31,2020 as compared with $1,052,530 as of March 31,2019 for its discontinued online lending services.

Impact of COVID-19

The COVID-19 outbreak in China adversely and materially affected Senmiao's business operations,financial condition and operating results in the quarter ended March 31,including but not limited to temporary closure of offices,decrease in revenues,slower collection of accounts receivables and additional allowance for doubtful accounts. However,as the ride-hailing markets in Chengdu and Changsha are gradually recovering from the impact of COVID-19,Senmiao expects its business to improve in the second half of 2020.

For additional related information,please see Senmiao's Annual Report on Form 10-K for the fiscal year ended March 31,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,operating lease,guarantee and other automobile transaction services aimed principally at the growing ride-sharing market in Senmiao's areas of operation in China. 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 of Senmiao's Auto Business,the Chinese ride-sharing and automobile financial leasing markets,Senmiao's plans,objectives,goals,strategies,and performance,and the impact of COVID-19 on Senmiao's business,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 discontinuance of Senmiao's online lending business; Senmiao's future business development; product and service demand and acceptance; the risks and impact of any reoccurrence of the COVID-19 pandemic in China; 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:

Rene Vanguestaine

Christensen

Email: rvanguestaine@ChristensenIR.com

Phone: +86 178 1749 0483

Linda Bergkamp

Christensen

Email: lbergkamp@ChristensenIR.com

Phone: +1 480 614 3004

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS

As of March 31,2020 and 2019

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

March 31,

March 31,

2020

2019

ASSETS

Current Assets

Cash and cash equivalents

$

833,888

$

3,980

Accounts receivable,net,current portion

660,645

199,909

Inventories

1,000,675

1,508,244

Finance lease receivables,current portion

459,110

10,254

Prepayments,other receivables and other assets,net

2,798,780

3,787,254

Escrow receivable due within one year

-

600,000

Due from related parties

26,461

140,498

Current assets - discontinued operations

826,580

1,185,016

Total Current Assets

6,606,139

11,399,155

Property and equipment,net

Property and equipment,net

469,201

100,680

Property and equipment,net - discontinued operations

11,206

25,205

Total Property and equipment,net

480,407

125,885

Other Assets

Operating lease right-of-use assets,net

473,661

-

Operating lease right-of-use assets,related parties

236,305

-

Financing lease right-of-use assets,net

5,440,362

-

Intangible assets,net

777,621

1,627

Prepayment for intangible assets

-

280,000

Accounts receivable,noncurrent

882,078

-

Finance lease receivables,noncurrent portion

734,145

22,298

Other assets - discontinued operations

-

485,170

Total Other Assets

8,544,172

789,095

Total Assets

$

15,630,718

$

12,314,135

LIABILITIES AND EQUITY

Current Liabilities

Borrowings from financial institutions

$

226,753

$

219,157

Borrowings from third parties

-

476,765

Accounts payable

4,065

-

Advance from customers

90,349

31,776

Income tax payable

16,267

21,905

Accrued expenses and other liabilities

2,008,391

962,291

Due to related parties and affiliates

152,679

415,931

Operating lease liabilities

149,582

-

Operating lease liabilities - related parties

151,655

-

Financing lease liabilities

3,473,967

-

Derivative liabilities

342,530

-

Current liabilities - discontinued operations

4,516,292

1,625,779

Total Current Liabilities

11,132,530

3,753,604

Other Liabilities

Borrowings from financial institutions,noncurrent

64,221

177,789

Operating lease liabilities,noncurrent

297,167

-

Operating lease liabilities,noncurrent - related parties

88,349

-

Financing lease liabilities,noncurrent

2,576,094

-

Total Other Liabilities

3,025,831

177,789

Total liabilities

14,158,361

3,931,393

Commitments and Contingencies

Stockholders' Equity

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

29,818 and 25,945,255 sharesissued and outstanding at March 31,2020 and

2019,respectively)

2,901

2,595

Additional paid-in capital

27,013,137

23,833,112

Accumulated deficit

(23,704,863)

(15,031,538)

Accumulated other comprehensive loss

(507,478)

(428,771)

Total Senmiao Technology Limited Stockholders' Equity

2,803,697

8,398

Noncontrolling interests

(1,331,340)

7,344

Total Equity

1,472,357

8,382,742

Total Liabilities and Equity

$

15,135

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

For the Years Ended March 31,

2020

2019

Revenues

$

15,575

$

2,107

Cost of revenues

(12,238)

(1,812,187)

Gross profit

3,337

738,920

Operating expenses

Selling,general and administrative expenses

(5,939)

(1,690)

Bad debt expense

(3,404,336)

(5,077)

Total operating expenses

(8,972,275)

(1,781,767)

Loss from operations

(5,596,938)

(1,042,847)

Other income (expense)

Other expense,net

(45,347)

(57,145)

Interest expense

(96,624)

(33,878)

Interest expense on finance leases

(373,407)

-

Change in fair value of derivative liabilities

1,724

-

Total other income (expense),net

1,281,346

(91,023)

Loss before income taxes

(4,315,592)

(1,133,870)

Income tax expenses

(33,184)

(21,905)

Net loss from continuing operations

(4,776)

(1,775)

Net loss from discontinued operations,net of applicable income taxes

(5,027)

(3,750)

Net loss

(9,803)

(4,525)

Net loss (income) attributable to noncontrolling interests from continuing operations

1,262,478

(7,344)

Net loss attributable to stockholders

$

(8,673,325)

$

(4,549,869)

Net loss

$

(9,803)

$

(4,525)

Other comprehensive loss

Foreign currency translation adjustment

(154,913)

(175,010)

Comprehensive loss

(10,090,716)

(4,717,535)

Total comprehensive loss (income) attributable to noncontrolling interests

1,338,684

(7,344)

Total comprehensive loss attributable to stockholders

$

(8,752,032)

$

(4,879)

Weighted average number of common stock

Basic and diluted

28,023,498

25,882,287

Loss per share - basic and diluted

Continuing operations

$

(0.11)

$

(0.05)

Discontinued operations

$

(0.20)

$

(0.13)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollar,

2020

2019

Cash Flows from Operating Activities:

Net loss

$

(9,525)

Net loss from discontinued operations

(5,750)

Net loss from continuing operations

(4,775)

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

Depreciation and amortization of property and equipment

103,009

12,247

Stock compensation expense

133,150

44,200

Amortization of right-of-use assets

1,553,523

-

Amortization of intangible assets

283

-

Bad debt expense

3,336

5,077

Impairment loss of right-of-use assets

70,984

-

Loss on disposal of equipment

3,608

-

Change in fair value of derivative liabilities

(1,724)

-

Change in operating assets and liabilities

Accounts receivable

(3,047,955)

(148,249)

Inventories

437,012

(1,491,928)

Prepayments,other receivables and other assets

(964,889)

(1,952,696)

Finance lease receivables

(1,031)

-

Accounts payable

4,144

-

Advances from customers

61,409

12,725

Income tax payable

(4,582)

21,905

Accrued expenses and other liabilities

1,138,316

99,515

Operating lease liabilities

(94,235)

-

Operating lease liabilities - related parties

2,125

-

Net cash used in operating activities from continuing operations

(4,530,293)

(4,552,979)

Net cash used in operating activities from discontinued operations

(1,917,371)

(1,703,247)

Net Cash Used in Operating Activities

(6,447,664)

(6,256,226)

Cash Flows from Investing Activities:

Purchases of property and equipment

(495,241)

(1,365)

Purchase of intangible assets

(470,000)

(280,869)

Addition in finance lease receivable

-

(32,200)

Net cash used in investing activities from continuing operations

(965,241)

(314,434)

Net cash provided by (used in) investing activities from discontinued operations

1,825

(218,191)

Net Cash Used in Investing Activities

(963,416)

(532,625)

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

111

-

Borrowings from financial institutions

55,159

-

Repayments to stockholders

-

(1,900,000)

Repayments to third parties

(604,562)

-

Repayments from related parties

108,566

-

Borrowings from related parties and affiliates

1,305,166

471,608

Repayments to related parties and affiliates

(1,405,356)

(487,115)

Repayments of current borrowings from financial institutions

(145,048)

-

Repayments of noncurrent borrowings from financial institutions

-

(175,581)

Release of escrow receivable

600,000

600,000

Principal payments of finance lease liabilities

(975,958)

-

Cash acquired from acquisition

-

218,816

Net cash provided by (used in) financing activities from continuing operations

4,080,202

(1,272,272)

Net cash (used in) provided by financing activities from discontinued operations

(648,405)

1,973,479

Net Cash Provided by Financing Activities

3,431,797

701,207

Effect of exchange rate changes on cash and cash equivalents

(197,200)

(33,412)

Net decrease in cash and cash equivalents

(4,176,483)

(6,121,056)

Cash and cash equivalents,beginning of year

5,020,510

11,141,566

Cash and cash equivalents,end of year

844,027

5,510

Less: Cash and cash equivalents from discontinued operations

(10,139)

(1,530)

Cash and cash equivalents from continuing operations,end period

$

833,980

Supplemental Cash Flow Information

Cash paid for interest expense

$

96,624

$

33,878

Cash paid for income tax

$

-

$

-

Non-cash Transaction in Investing and Financing Activities

IPO expenses paid by the Company's stockholders

$

-

$

70,687

Assume of net liabilities of Ruixi,excluding cash and cash equivalents

$

-

$

149,680

Prepayment in exchange of intangible assets

$

280,000

$

-

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

$

549,679

$

-

Right-of-use assets obtained in exchange of lease liabilities - related parties

$

343,819

$

-

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

$

1,010,752

$

-

Issuance of restricted stock units from accrued expenses and other liabilities

$

44,200

$

-

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