Senmiao Technology Announces Unaudited Financial Results for First Quarter of Fiscal Year 2021

CHENGDU,China,Aug. 20,2020 -- Senmiao Technology Limited (NASDAQ: AIHS) ("Senmiao"),a provider of automobile transaction and related services (the "Auto Business") targeting the online ride-hailing industry in China,today announced its unaudited financial results for the quarter ended June 30,2020.

First Quarter of Fiscal 2021 Highlights

Revenue from operating leases surpassed automobile sales and became the largest proportion of the total revenue

Total revenues decreased by 77% year-over-year to $1,146,916 from $5,012,563 due to impact of COVID-19 on ride hailing sector in Senmiao's areas of operation in China

Net loss of $2,370,184 versus net loss of $505,432 in the same period last year

"During the quarter,we focused on ways to adjust the growth strategy of our Auto Business as ride-hailing drivers continued to be adversely affected in the aftermath of COVID-19," commented Xi Wen,Chairman,Chief Executive Officer and President of Senmiao. "We shifted our focus during the quarter to a new opportunity,namely the provision of short-term car rentals. We have noticed an increasing trend in demand for short-term rentals since the end of 2019,so we capitalized on this by reallocating resources to better utilize automobiles that are being surrendered by ride-hailing drivers that continue to face financial pressures as a result of COVID-19. Creating this additional revenue stream has also helped to mitigate the drop in online ride-hailing automobile sales in Chengdu and Changsha as we plan for a recovery of ourAuto Business in the second half of 2020. So far in the second quarter of this fiscal year (our quarter ending September 30),we have signed a strategic cooperation agreement with one of the largest auto dealer groups in southwest China to increase access to electric vehicles,which we hope will significantly improve our sales channels and enhance our service options. In an effort to further strengthen our balance sheet,we also secured an investment of approximately US$7 million from a fundamental investor and successfully raised net proceeds of US$6 million through an underwritten public offering. We remain confident that we will emerge from this pandemic in a better position to expand our Auto Business as more cities return to normalcy. We will continue to look for additional strategic ways to accelerate the expansion of our Auto Business as we aim to drive long-term sustainable value for our shareholders."

Revenues

Total revenue was $1,916 for the quarter ended June 30,2020,a decrease of $3,865,647,or 77% as compared with the quarter ended June 30,2019,primarily due to the decreased number of facilitated new automobile purchases as a result of COVID-19.

Cost of Revenues

Cost of revenues was $621,241 for the quarter ended June 30,2020 as compared with $4,022,312 during the same period last year,representing a decrease of $3,401,071,or 85%,primarily due to the decrease in the number of automobiles sold.

Gross Profit

Gross profit was $525,675 for the quarter ended June 30,2020. Gross profit decreased by $464,576,or 47%as compared with the same period last year,mainly due to the decrease in the number of facilitated new automobile purchases. However,gross profit generated from sales of automobiles increased by $49,755 due to having more favorable purchase price options from automobile dealers. Gross profit generated from operating lease revenues from automobile rentals increased by $119,529 due tothe increased number of automobiles delivered under operating lease.

Selling,General and Administrative Expenses

Selling,general and administrative expenses were $2,139,440 for the quarter ended June 30,2020 as compared with $875,433 during the same period last year,representing an increase of $1,264,007,or 144%. The increase was attributable to the increase in amortization of automobiles which were tendered to us but have not been sub-leased or sold,salary and employee benefits and other expenses as a result of the expansion of the Auto Business since our fiscal 2019.

Change in Fair Value of Derivative Liabilities

The change in fair value of derivative liabilities resulted in a loss $282,980,derived from change of the fair values between June 30,2020 and March 31,2020 of the warrants issued in Senmiao's registered direct offering in June 2019.

Net Loss

Total net loss for the quarter ended June 30,2020 was $2,184 as compared to a net loss of $505,432 during the same period last year. Net lossfrom continuing operations and discontinued operations for the quarter ended June 30,284,530 and $85,654 as compared to a net loss of $26,329 and $479,103,respectively,during the same period last year.

Loss per share

Loss per share for continuing operations was $0.07 and $0.00 and loss per share for discontinued operations was $0.00 and $0.02,for the quarters ended June 30,2020 and 2019.

Financial Position

As of June 30,Senmiao had cash and cash equivalents of $516,598as compared with $833,888 as of March 31,2020 for its continuing operations. After giving effect to our underwritten offering in August,our cash and cash equivalents is now approximately $6.7 million and our pro forma stockholders' equity is approximately $7.1 million.

Impact of COVID-19

The COVID-19 outbreak had materially adversely affected Senmiao's business operations,financial condition and operating results in the quarter ended June 30,including but not limited to,decrease in revenues,slower collection of accounts receivable 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 during the remainder of its current fiscal year (ending March 31,2021).

Further information regarding Senmiao's results of operations for the period ending June 30,2020 can be found in the Senmiao's Quarterly Report on Form 10-Q which will be filed with the Securities and Exchange Commission.

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,and 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; 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

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

June30,

March31,

2020

2020

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

516,598

$

833,888

Accounts receivable,net,current portion

788,722

660,645

Inventories

1,097,680

1,000,675

Finance lease receivables,current portion

548,438

459,110

Prepayments,other receivables and other assets,net

2,384,606

2,798,780

Due from related parties

46,342

26,461

Current assets - discontinued operations

702,465

826,580

Total current assets

6,084,851

6,606,139

Property and equipment,net

Property and equipment,net

523,870

469,201

Property and equipment,net - discontinued operations

9,146

11,206

Total property and equipment,net

533,016

480,407

Other assets

Operating lease right-of-use assets,net

437,971

473,661

Operating lease right-of-use assets,related parties

202,762

236,305

Financing lease right-of-use assets,net

6,424,127

5,440,362

Intangible assets,net

756,871

777,621

Accounts receivable,noncurrent

733,687

882,078

Finance lease receivables,noncurrent

670,344

734,145

Total other assets

9,225,762

8,544,172

Total assets

$

15,843,629

$

15,630,718

LIABILITIES AND EQUITY (DEFICIENCY)

Current liabilities

Borrowings from financial institutions

$

330,682

$

226,753

Accounts payable

7,686

4,065

Advances from customers

133,031

90,349

Income tax payable

16,366

16,267

Accrued expenses and other liabilities

2,896,859

2,008,391

Due to related parties and affiliates

150,526

152,679

Operating lease liabilities

145,724

149,582

Operating lease liabilities - related parties

143,596

151,655

Financing lease liabilities

3,995,859

3,473,967

Derivative liabilities

625,510

342,530

Current liabilities - discontinued operations

4,458,892

4,516,292

Total current liabilities

12,904,731

11,132,530

Other liabilities

Borrowings from financial institutions,noncurrent

52,226

64,221

Operating lease liabilities,noncurrent

220,197

297,167

Operating lease liabilities,noncurrent - related parties

79,648

88,349

Financing lease liabilities,noncurrent

3,472,937

2,094

Total other liabilities

3,825,008

3,025,831

Total liabilities

16,729,739

14,158,361

Commitments and contingencies

Stockholders' equity (deficiency)

Common stock (par value $0.0001 per share,100,000 shares authorized; 29,818

shares issued and outstanding at June30,2020 and March31,2020)

2,901

2,901

Additional paid-in capital

27,013,137

27,137

Accumulated deficit

(25,685,348)

(23,704,863)

Accumulated other comprehensive loss

(498,074)

(507,478)

Total Senmiao Technology Limited stockholders' equity

832,616

2,803,697

Non-controlling interests

(1,718,726)

(1,331,340)

Total (deficiency) equity

(886,110)

1,357

Total liabilities and equity

$

15,718

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 June30,

2020

2019

(Unaudited)

(Unaudited)

Revenues

$

1,916

$

5,563

Cost of revenues

(621,241)

(4,312)

Gross profit

525,675

990,251

Operating expenses

Selling,general and administrative expenses

(2,440)

(875,433)

Bad debt expense

(128,612)

(12,738)

Total operating expenses

(2,268,052)

(888,171)

(Loss) income from operations

(1,742,377)

102,080

Other income (expense)

Other (expense) income,net

(6,076)

13,167

Interest expense

(20,648)

(37,039)

Interest expense on finance leases

(226,177)

-

Change in fair value of derivative liabilities

(282,980)

(3,396)

Total other expense,net

(535,881)

(27,268)

(Loss) income before income taxes

(2,278,258)

74,812

Income tax expense

(6,272)

(101,141)

Net loss from continuing operations

(2,530)

(26,329)

Net loss from discontinued operations,net of applicable income taxes

(85,654)

(479,103)

Net loss

(2,184)

(505,432)

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

389,699

(72,928)

Net loss attributable to stockholders

$

(1,485)

$

(578,360)

Net loss

$

(2,184)

$

(505,432)

Other comprehensive income (loss)

Foreign currency translation adjustment

11,717

(86,223)

Comprehensive loss

(2,358,467)

(591,655)

Total comprehensive loss (income) attributable to non-controlling interests

387,386

(44,652)

Total comprehensive loss attributable to stockholders

$

(1,971,081)

$

(636,307)

Weighted average number of common stock

Basic and diluted

29,818

26,121,433

Loss per share - basic and diluted

Continuing operations

$

(0.07)

$

(0.00)

Discontinued operations

$

(0.00)

$

(0.02)

SENMIAO TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollar,

2020

2019

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities:

Net loss

$

(2,432)

Net loss from discontinued operations

(85,103)

Net loss from continuing operations

(2,329)

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

Depreciation and amortization of property and equipment

58,085

22,672

Amortization of right-of-use assets

880,785

16,123

Amortization of intangible assets

20,814

12

Bad debt expense

128,612

14,726

Change in fair value of derivative liabilities

282,980

3,396

Change in operating assets and liabilities

Accounts receivable

(94,912)

(1,935,065)

Inventories

(10,647)

(1,068,512)

Prepayments,other receivables and other assets

365,804

(472,506)

Finance lease receivables

(74,350)

(825,500)

Accounts payable

3,609

448,926

Advances from customers

42,437

71,885

Income tax payable

60

96,593

Accrued expenses and other liabilities

564,708

429,892

Operating lease liabilities

(81,842)

(33,035)

Operating lease liabilities - related parties

(18,502)

-

Net cash used in operating activities from continuing operations

(216,889)

(3,256,722)

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

183,832

(505,086)

Net Cash Used in Operating Activities

(33,057)

(3,761,808)

Cash Flows from Investing Activities:

Purchases of property and equipment

(4,891)

(375,077)

Prepayment of intangible assets

-

(320,000)

Net cash used in investing activities from continuing operations

(4,891)

(695,077)

Net cash used in investing activities from discontinued operations

(70)

-

Net Cash Used in Investing Activities

(4,961)

(695,077)

Cash Flows from Financing Activities:

Net proceeds from issuance of common stock in registered direct offering

-

5,142,124

Repayments of borrowing from third parties

-

(322,406)

Borrowings from financial institutions

122,406

-

Loan to related party

(19,693)

-

Repayments to related parties and affiliates

(4,155)

(39,376)

Repayments of current borrowings from financial institutions

(23,739)

(47,703)

Principal payments of finance lease liabilities

(376,670)

-

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

(301,851)

4,732,639

Net cash provided by financing activities from discontinued operations

7,233

208,274

Net Cash Provided by (Used in) Financing Activities

(294,618)

4,940,913

Effect of exchange rate changes on cash and cash equivalents

10,239

(66,413)

Net (decrease) increase in cash and cash equivalents

(322,397)

417,615

Cash and cash equivalents,beginning of period

844,028

5,020,510

Cash and cash equivalents,end of period

521,631

5,438,125

Less: Cash and cash equivalents from discontinued operations

(5,033)

(547,602)

Cash and cash equivalents from continuing operations,end of period

$

516,598

$

4,890,523

Supplemental Cash Flow Information

Cash paid for interest expense

$

20,648

$

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

Assumption of net liabilities of Hunan Ruixi,excluding cash and cash equivalents

$

-

$

149,680

Prepayment in exchange of intangible assets

$

-

$

41,033

Recognition of right-of-use assets and lease liabilities

$

1,780,027

$

386,039

Acquisition of equipment through prepayment and financing lease receivables offset

$

85,455

$

-

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

$

-

$

4,152,751

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