Senmiao Technology Reports Fiscal 2021 Second Quarter Financial Results

CHENGDU,China,Nov. 20,2020 -- Senmiao Technology Limited ("Senmiao") (Nasdaq: AIHS),a provider of automobile transaction and related services targeting the online ride-hailing industry in China as well as its own online ride-hailing platform,today announced financial results for the fiscal 2021 second quarter ended September 30,2020.

Xi Wen,Chairman,Chief Executive Officer and President of Senmiao,"We were pleased that the proactive measures taken by our team in the early stages of the COVID-19 pandemic began to gain traction as we progressed through the third quarter. While the negative year-over-year impact on our operations is apparent,we saw considerable improvement in demand for our services during the second quarter and into the current fiscal third quarter. We transitioned many of the vehicles tendered to us by ride-hailing drivers who exited the business in the first quarter into rental vehicles during the past few months,which became a source of revenue as sales options diminished in the first half of the year. We are now starting to see the market recover,and believe we can offer excellent optionality to drivers through sales,leasing,and rental selections."

Mr. Wen continued,"Our goal has been to become a total solution provider for ride-sharing drivers,beginning in our two core markets,Chengdu and Changsha. In recent weeks,we have strengthened this value proposition through cooperation with BYD to offer electric vehicles with financing and leasing options to drivers in our core markets; and a collaboration with Luxingtong for the provision of a wide array of telematics and safety solutions for our drivers. In addition,we recently launched our own ride-hailing platform in Chengdu and have seen the number of riders utilizing the service accelerating daily as we build greater brand recognition."

Mr. Wen concluded,"The impact of COVID-19 on our business model was stark and rapid. We were forced into situations where we needed to ensure the strength of our balance sheet and be adaptable to a new and changing paradigm in the Chinese ride-sharing market. While undertaking these changes was difficult in the short-term,we are now starting to see the benefits of the hard decisions we made. Our focus in the near term will be to improve our online ride-hailing platform with further enhancements for both drivers and riders,while seeking partnerships that can strengthen our value proposition for new drivers. Ultimately,we believe that our efforts will continue to position Senmiao well in Chengdu and Changsha,and position us for potential growth in new markets next year."

Revenues

Total revenues were $1,390,396 for the quarter endedSeptember 30,2020,compared to $5,885,287 in the same period last year and $1,146,916 for the quarter ended June 30,2020. The decline from the prior year was largely due to the impact of COVID-19 which resulted in a significant decrease in the number of facilitated new automobile purchases and a significant number of ride-hailing drivers exiting the ride-hailing business and tendering their vehicles to Senmiao for sublease and sale.

As the ride-hailing markets in Chengdu and Changsha gradually recovered from the impact of COVID-19 beginning in April 2020,Senmiao also experienced a decrease in the number of automobiles tendered to it by the ride-hailing drivers exiting the business during the quarter ended September 30,2020 as compared with prior quarters.

Senmiao also reported an increase in the monthly installments collected from automobile sale and leasing customers in the three months ended September 30,as compared with the three months ended June 30,2020. Earlier in 2020,a higher number of ride-hailing drivers delayed their monthly installment payments as a result of the COVID-19 pandemic. However,the Company has seen a gradual improvement in collections throughout the year.

Senmiao strategically shifted its business focus to include automobile rental options for ride-hailing drivers as a measure of creating additional revenue. The automobile rental business generated an income of $787,955 for the quarter ended September 30,2020.

As a result of the gradual recovery of the ride-hailing industry,coupled with Senmiao's recent partnerships and proactive measures to address the changing market conditions,Senmiao expects revenue to increase in the third and fourth quarters of its fiscal year 2021.

Cost of Revenues

Cost of revenues were $994,515for the quarter endedSeptember 30,as compared with$4,709,184during the same period last year. The decline was primarily due to the decrease in the number of automobiles sold.

Gross Profit

Gross profit was$395,881,or approximately 28.5% gross margin,for the quarter endedSeptember 30,compared to $1,176,103,or approximately 20.0% gross margin,in the prior year period.

Selling,General and Administrative Expenses

Selling,general and administrative expenses were$2,749,209for the quarter endedSeptember 30,2020as compared with$1,137,801during the same period last year. The increase mainly consists of an increase of $560,274 in amortization of automobiles which were tendered to Senmiao but have not been sub-leased or sold,an increase of $336,158 in salary and employee benefits as Senmiao's employees increased from 158 to 203,an increase of $599,170 in professional service fees such as financial,legal and market consulting,and an increase of $115,806 in advertising and promotion,rental and other office expenses.

Net Loss

Net loss from Senmiao's continuing operations for the quarter ended September 30,2020 was $2,607,165,compared to net income of $1,862,365 for the quarter ended September 30,2019,which mainly resulted from the decrease in revenue,decrease in gross profit and increase in selling,general and administrative expenses as stated in prior section as well as gain in the change of the fair values of derivative liabilities recorded for the three months ended September 30,2020.

Loss per Share

Loss per share for continuing operations was$0.06 based on a weighted average number of basic and diluted common stock of 37,802,840,as compared to earnings per share of $0.06 based on a weighted average number of basic and diluted common stock of 28,237,430.

Financial Position

As ofSeptember 30,Senmiao had cash and cash equivalents of$4,394,019as compared with$833,888as ofMarch 31,2020for its continuing operations. Total stockholders' equity was $2,782,424 as of September 30,472,357 as of March 31,2020.

Impact of COVID-19

The COVID-19 outbreak continued to materially adversely affect Senmiao's business operations,financial condition and operating results in the quarter endedSeptember 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 inChengduandChangshaare gradually recovering from the impact of COVID-19,Senmiao expects its business to improve during the remainder of its current fiscal year endingMarch 31,2021.

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

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 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. Senmiao also operates Xixingtianxia,its own proprietary online ride-hailing platform. 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. These forward-looking statements (including statements concerning the development of Senmiao's automobile transaction,financing,rental and related services and online ride-hailing platform,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 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

Adam Prior,Senior Vice PresidentLucy Ma,Associate(212) 836-9606+86 10 5661 7012aprior@equityny.comlma@equityny.com© 2020 Senmiao Technology Ltd. All rights reserved.SENMIAO TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(Expressed in U.S. dollar,except for the number of shares)

September 30,

March 31,

2020

2020

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$4,019

$833,888

Accounts receivable,net,current portion

867,576

660,645

Inventories

812,748

1,000,675

Finance lease receivables,current portion

510,044

459,110

Prepayments,other receivables and other assets,net

2,834,601

2,798,780

Due from related parties

96,075

26,461

Current assets - discontinued operations

588,068

826,580

Total current assets

10,131

6,606,139

Property and equipment,net

Property and equipment,net

721,723

469,201

Property and equipment,net - discontinued operations

7,412

11,206

Total property and equipment,net

729,135

480,407

Other assets

Operating lease right-of-use assets,net

418,355

473,661

Operating lease right-of-use assets,related parties

378,166

236,305

Financing lease right-of-use assets,net

6,304,657

5,440,362

Intangible assets,net

737,008

777,621

Accounts receivable,non-current

598,675

882,078

Finance lease receivables,non-current

728,995

734,145

Total other assets

9,856

8,544,172

Total assets

$19,998,122

$15,630,718

LIABILITIES AND EQUITY

Current liabilities

Borrowings from financial institutions

$594,974

$226,753

Accounts payable

1,045

4,065

Advances from customers

106,459

90,349

Income tax payable

17,461

16,267

Accrued expenses and other liabilities

3,604,738

2,008,391

Due to related parties and affiliates

299,366

152,679

Operating lease liabilities

169,174

149,582

Operating lease liabilities - related parties

162,215

151,655

Financing lease liabilities

4,715,471

3,473,967

Derivative liabilities

940,728

342,530

Current liabilities - discontinued operations

3,077,506

4,516,292

Total current liabilities

13,689,137

11,132,530

Other liabilities

Borrowings from financial institutions,noncurrent

62,420

64,221

Operating lease liabilities,non-current

197,343

297,167

Operating lease liabilities,non-current - related parties

207,786

88,349

Financing lease liabilities,non-current

3,059,012

2,576,094

Total other liabilities

3,526,561

3,025,831

Total liabilities

17,215,698

14,158,361

SENMIAO TECHNOLOGY LIMITEDUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(CONTINUED)(Expressed in U.S. dollar,

2020

2020

(Unaudited)

Commitments and contingencies

Stockholders' equity

Common stock (par value $0.0001 per share,100,000 shares authorized;43,358,818 and

29,818 shares issued and outstanding at September 30 and March 31,respectively)

4,336

2,901

Additional paid-in capital

33,444,742

27,013,137

Accumulated deficit

(27,866,092)

(23,704,863)

Accumulated other comprehensive loss

(682,398)

(507,478)

Total Senmiao Technology Limited stockholders' equity

4,900,588

2,803,697

Non-controlling interests

(2,118,164)

(1,331,340)

Total equity

2,424

1,357

Total liabilities and equity

$19,718

SENMIAO TECHNOLOGY LIMITEDUNAUDITED 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 September 30,

For the Six Months Ended September 30,

2020

2019

2020

2019

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)Revenues

$1,396

$5,287

$2,537,312

$10,897,850Cost of revenues

(994,515)

(4,184)

(1,794,771)

(8,731,496)Gross profit

395,881

1,103

742,541

2,166,354

Operating expenses

Selling,general and administrative expenses

(2,209)

(1,801)

(4,634)

(2,234)Bad debts expenses (recovery)

47,540

(115,476)

(81,072)

(128,214)Impairments of financing lease right-of-use

(80,223)

-

(80,223)

-assets

Total operating expenses

(2,781,892)

(1,253,277)

(4,870,929)

(2,141,448)

Income (loss) from operations

(2,386,011)

(77,174)

(4,128,388)

24,906

Other income (expense)

Other income (expense),net

135,457

(28,900)

129,381

(15,733)Interest expense

(14,892)

(25,306)

(35,540)

(62,345)Interest expense on finance leases

(211,053)

-

(437,230)

-Change in fair value of derivative liabilities

(129,961)

1,202

(412,941)

1,994,806Total other income (expense),net

(220,449)

1,943,996

(756,330)

1,916,728

Income (loss) before income taxes

(2,460)

1,822

(4,884,718)

1,941,634

Income tax expense

(705)

(4,457)

(6,977)

(105,598)

Net income (loss) from continuing operations

(2,165)

1,365

(4,891,695)

1,836,036

Net income (loss) from discontinued operations,

net of applicable income taxes

7,875

(721,007)

(77,779)

(1,200,110)

Net income (loss)

(2,599,290)

1,358

(4,969,474)

635,926

Net (income) loss attributable to non-controlling

interests from continuing operations

418,546

(51,105)

808,245

(124,033)

Net income (loss) attributable to stockholders

$(2,180,744)

$1,090,253

$(4,161,229)

$511,893

Net income (loss)

$(2,290)

$1,358

$(4,474)

$635,926

Other comprehensive loss

Foreign currency translation adjustment

(165,216)

(374,191)

(153,499)

(460,414)

Comprehensive income (loss)

(2,764,506)

767,167

(5,122,973)

175,512

Total comprehensive loss attributable to

noncontrolling interests

(399,438)

(46,200)

(786,824)

(1,548)

Total comprehensive income (loss) attributable

to stockholders

$(2,365,068)

$813,367

$(4,336,149)

$177,060SENMIAO TECHNOLOGY LIMITEDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)(CONTINUED)(Expressed in U.S. dollar,

2020

2019

2020

2019

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)Weighted average number of common stock

Basic and diluted

37,840

28,430

33,429,856

27,185,205

Earnings (loss) per share - basic and diluted

Continuing operations$(0.06)

$0.06

$(0.12)

$0.06Discontinued operations$0.00

$(0.03)

$0.00

$(0.04)SENMIAO TECHNOLOGY LIMITEDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Expressed in U.S. dollar,except for the number of shares)

For the Six Months Ended September 30,

2020

2019

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities:

Net income (loss)

$(4,926

Net loss from discontinued operations

(77,110)

Net (loss) income from continuing operations

(4,036

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization of property and equipment

106,608

50,396

Stock compensation expense

445,000

-

Amortization of right-of-use assets

2,123,901

40,730

Amortization of intangible assets

41,670

98

Bad debts expense

81,072

129,230

Impairment loss of financing lease right-of-use assets

80,223

-

Gain (loss) on disposal of equipment

(412)

4,621

Change in fair value of derivative liabilities

412,941

(1,806)

Change in operating assets and liabilities

Accounts receivable

124,198

(2,580,766)

Inventories

278,161

(804,853)

Prepayments,other receivables and other assets

(248,889)

(1,280,566)

Finance lease receivables

(46,913)

(1,109,277)

Accounts payable

(3,097)

167,472

Advances from customers

11,864

60,385

Income tax payable

480

87,469

Accrued expenses and other liabilities

1,355,339

351,653

Operating lease liabilities

(96,436)

(74,875)

Operating lease liabilities - related parties

61,575

-

Net cash used in operating activities from continuing operations

(164,410)

(5,117,053)

Net cash used in operating activities from discontinued operations

(1,131,564)

(947,351)

Net Cash used in Operating Activities

(1,295,974)

(6,064,404)

Cash Flows from Investing Activities:

Purchases of property and equipment

(19,572)

(384,695)

Prepayment of intangible assets

-

(470,000)

Net cash used in investing activities from continuing operations

(19,572)

(854,695)

Net cash used in investing activities from discontinued operations

(71)

-

Net Cash Used in Investing Activities

(19,643)

(854,695)

Cash Flows from Financing Activities:

Net proceeds from issuance of common stock and warrants in a registered direct offering

-

5,142,124

Net proceeds from issuance of common stock and warrants in an underwritten public offering

6,098,297

-

Net proceeds from issuance of common stock upon exercise of warrants

75,000

96

Borrowings from an insurance company

488,932

-

Repayments to stockholders

(28,569)

-

Repayments to third parties

-

(462,370)

Loan to related party

(66,427)

-

Borrowings from related parties and affiliates

-

1,121,435

Repayments to related parties and affiliates

(205,900)

(838,949)

Repayments of current borrowings from financial institutions

(150,999)

(97,306)

Release of escrow receivable

-

600,000

Principal payments of finance lease liabilities

(1,449,554)

-

Net cash provided by financing activities from continuing operations

4,760,780

5,465,030

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

28,569

(814,033)

Net Cash Provided by Financing Activities

4,789,349

4,650,997

SENMIAO TECHNOLOGY LIMITEDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(CONTINUED)(Expressed in U.S. dollar,

2020

2019

(Unaudited)

(Unaudited)

Effect of exchange rate changes on cash and cash equivalents

76,259

(213,741)

Net (decrease) increase in cash and cash equivalents

3,549,991

(2,481,843)

Cash and cash equivalents,beginning of period

844,028

5,020,510

Cash and cash equivalents,end of period

4,019

2,538,667

Less: Cash and cash equivalents from discontinued operations

-

(293,766)

Cash and cash equivalents from continuing operations,end of period

$4,019

$2,244,901

Supplemental Cash Flow Information

Cash paid for interest expense

$35,540

$62,345

Cash paid for income tax

$-

$-

Non-cash Transaction in Investing and Financing Activities

Prepayment in exchange of intangible assets

$-

$40,457

Recognition of right-of-use assets and lease liabilities

$2,976,966

$960,908

Acquisition of equipment through prepayment and financing lease

$312,864

$-

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

proceeds

$241,919

$3,150,006

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

warrants exercised

$56,662

$961,631

Stock issued on deferred stock compensation

$445,000

$-

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