Senmiao Technology Reports Fiscal 2021 Year-end Financial Results

CHENGDU,China,July 9,2021 --Senmiao Technology Limited ("Senmiao" or the "Company") (Nasdaq: AIHS),a financing and servicing company focused on the online ride-hailing industry in China and an operator of its own online ride-sharing platform,today announced financial results for the fiscal year ended March 31,2021.

Fiscal 2021 Financial and Operating Highlights

Total revenues of $6.2 million,compared to $15.7 million in the prior fiscal year,primarily as a result of fewer newly facilitated automobile purchases and automobiles sold due to the adverse effects of the COVID-19 pandemic on online ride-hailing and the greater transportation industry as public travel restrictions were instituted

Significant decrease in revenues from automobile sales was offset by a $2.1 million increase in operating lease revenues from automobile rentals as Senmiao shifted its focus to this business in direct response to the pandemic,as well as $0.9 million in revenues from its online ride-hailing platform,which launched in October 2020 and has seen a significant ramp over the past several months,which is expected to continue given new and expanded partnerships and plans to expand to other cities

From October 23,2020,the date Senmiao launched its online ride-hailing platform,to March 31,2021,4.4 million rides were completed through the platform with fares paid by riders totaling $12.4 million

Net cash used in operating activities from continuing operations of $2.2 million,compared to $4.5 million in the prior fiscal year

Management Commentary

Xi Wen,Chairman,Chief Executive Officer and President of Senmiao,stated,"We believe Senmiao is better positioned today to become the leading financing and servicing company for the online ride-hailing industry in China as a result of the business decisions made in response to the challenges we overcame during the global pandemic. Our more flexible automobile rental options have been well received by the growing population of ride-hailing drivers in China,particularly as the industry has mostly recovered from the devastating impacts of COVID-19 and continues to improve as tourism and day-to-day travel are picking up once again. We anticipate the launch of our own online ride-hailing platform in October of last year to be our primary growth driver going forward,and we continue to ramp its development with key industry partnerships and expansion into new cities. As of the end of June 2021,our platform has helped facilitate 10.5 million rides since launch,and we believe this is only the beginning as we have established licensing agreements allowing us to bring our platform online in major cities including Beijing and Shanghai."

Mr. Wen continued,"Over the course of fiscal year 2021,we saw sequential top line revenue growth with each passing quarter,demonstrating the accelerating growth trajectory of our ride-hailing focused businesses. We are incredibly excited about the opportunities we see in this space,and given our strong financial position following registered direct offerings in 2021 that generated aggregate gross proceeds of $13.5 million for us to put toward growing the business,we are working earnestly toward becoming a major player in China's online ride-hailing industry."

Financial Review

Revenues

Total revenues were $6.2 million for the fiscal year endedMarch 31,compared to $15.7 million in the prior fiscal year. The decline from the prior fiscal year was largely due to the impact of COVID-19,which resulted in a significant decrease in the number of new automobile purchases as a significant number of ride-hailing drivers exited the ride-hailing business and tendered their vehicles to Senmiao for sublease and sale.

As the ride-hailing markets in Chengdu and Changsha have gradually recovered from the effects of the pandemic since April 2020,the number of automobiles tendered to Senmiao by ride-hailing drivers exiting the business has also decreased.

During the year ended March 31,Senmiao strategically shifted its business focus to automobile rental options for ride-hailing drivers. As a result,the automobile rental business generated operating lease revenues of $3.4 million for the year ended March 31,a 163% increase from $1.3 million in the prior fiscal year.

Cost of Revenues

Cost of revenues decreased to $6.0 million for the year ended March 31,from$12.3 million in the prior fiscal year,primarily due to a $10.9 million decrease in cost of automobiles sold during the period,which was partially offset by a $3.2 million increase in cost of automobiles under operating leases and a $1.3 million increase in direct expense and technical service fees related to Senmiao's new online ride-hailing platform,as a result of the commencement and expansion of those two businesses.

Gross Profit

Gross profit was$0.2 million,or 3.1% gross margin,for the year ended March 31,compared to $3.4 million,or 21.6% gross margin,in the prior fiscal year,due to the decreased number of automobiles sold and facilitated new automobile purchases. During fiscal 2021,Senmiao shifted its business focus to operating its own online ride-hailing platform,which launched in October 2020. This business introduced a new revenue stream for the Company and mitigated the negative impact of the COVID-19 pandemic and intense competition in the online ride-hailing market in Chengdu and Changsha. As noted above,Senmiao incurred increased cost of revenues related to the launch of this new business,as well as paid cash incentives to attract drivers to its platform.

Selling,General and Administrative Expenses

Selling,general and administrative expenses were $10.3 million for the year ended March 31,compared to $5.5 million in the prior fiscal year. The SG&A increase mainly consisted of a $1.0 million increase in amortization of automobiles which were tendered to Senmiao but have not been sub-leased or sold,an increase of $1.9 million in salary and employee benefits as Senmiao's employee headcount increased from 181 to 275,an increase of $1.0 million in professional service fees such as financial,legal and market consulting,and an increase of $0.9 million in advertising and promotion,rental and other office expenses.

Net Loss

Net loss from Senmiao's continuing operations for the year ended March 31,was $12.6 million,compared to $4.3 million in the prior fiscal year,which was primarily the result of the decrease in revenue and gross profit and increase in SG&A expenses as stated above,as well as a $3.5 million increase in the loss as a result of the fair value change of derivative liabilities,and a $0.4 million increase in interest expense on finance leases as a result of an increase in aggregated tendered automobiles from the prior fiscal year.

Loss per Share

Loss per share for continuing operations wasapproximately $0.26 based on a weighted average number of basic and diluted common stock of 39.4 million,compared to approximately $0.11 based on a weighted average number of basic and diluted common stock of 28.0 million.

Financial Position

As ofMarch 31,Senmiao had cash and cash equivalents of $4.4 million,compared to $0.8 millionas ofMarch 31,for its continuing operations. Total stockholders' equity was $2.6 million as of March 31,compared to $1.5 million as of March 31,2020.

The Company's business is capital intensive. Subsequent to year-end (on May 13,2021),Senmiao closed a registered direct offering of an aggregate of 5,531,916 shares of common stock at a price of $1.175 per share for aggregate gross proceeds of $6.5 million. Senmiao has 55.4 million common shares outstanding after the offering. Following the completion of this offering,the Company's working capital deficit was $0.1 million.

Further information regarding Senmiao's results of operations for the fiscal year endedMarch 31,can be found in Senmiao's Annual Report on Form 10-K,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 as well as operates its own ride-hailing platform aimed principally at the growing online ride-hailing market in Senmiao's areas of operation in China. For more information about Senmiao,please visit: http://www.senmiaotech.com. The Company routinely provides important information on its website.

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-hailing 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.

Adam Prior,Senior Vice President

(212) 836-9606

aprior@equityny.com

In China

Lucy Ma,Associate

+86 10 5661 7012

lma@equityny.com

© 2021 Senmiao Technology Ltd. All rights reserved.

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS

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

March 31,

March 31,

2021

2020

ASSETS

Current assets

Cash,and cash equivalents

$

4,448,075

$

833,888

Accounts receivable,net,current portion

1,437,195

660,645

Inventories

127,933

1,000,675

Finance lease receivables,current portion

541,605

459,110

Prepayments,other receivables and other assets,net

3,905,278

2,798,780

Due from related parties

39,572

26,461

Current assets - discontinued operations

393,348

826,580

Total current assets

10,893,006

6,606,139

Property and equipment,net

Property and equipment,700,147

469,201

Property and equipment,net - discontinued operations

5,592

11,206

Total property and equipment,net

3,705,739

480,407

Other assets

Operating lease right-of-use assets,net

499,221

473,661

Operating lease right-of-use assets,related parties

580,367

236,305

Financing lease right-of-use assets,net

4,778,772

5,440,362

Intangible assets,net

968,131

777,621

Goodwill

135,388

-

Accounts receivable,non-current

269,183

882,078

Finance lease receivables,non-current

473,472

734,145

Total other assets

7,704,534

8,544,172

Total assets

$

22,303,279

$

15,630,718

LIABILITIES AND EQUITY

Current liabilities

Borrowings from financial institutions

$

310,662

$

226,753

Accounts payable

44,769

4,065

Advances from customers

155,586

90,349

Income tax payable

17,408

16,267

Accrued expenses and other liabilities

6,655,592

2,008,391

Due to related parties and affiliates

352,827

152,679

Operating lease liabilities

209,644

149,582

Operating lease liabilities - related parties

243,726

151,655

Financing lease liabilities

5,172,943

3,473,967

Derivative liabilities

1,278,926

342,530

Current liabilities - discontinued operations

2,336,861

4,516,292

Total current liabilities

16,944

11,132,530

Other liabilities

Borrowings from financial institutions,non-current

44,962

64,221

Operating lease liabilities,non-current

263,708

297,167

Operating lease liabilities,non-current - related parties

341,549

88,349

Financing lease liabilities,non-current

2,256,553

2,576,094

Deferred tax liability

44,993

-

Total other liabilities

2,951,765

3,025,831

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Expressed in U.S. dollar,

2021

March 31,

2020

Total liabilities

19,730,709

14,158,361

Commitments and contingencies

Stockholders' equity

Common stock (par value $0.0001 per share,100,000 shares authorized;49,780,725 and 29,818

shares issued and outstanding at March 31,2021 and 2020,respectively)

4,978

2,901

Additional paid-in capital

40,755,327

27,013,137

Accumulated deficit

(34,064,921)

(23,863)

Accumulated other comprehensive loss

(838,671)

(507,478)

Total Senmiao Technology Limited stockholders' equity

5,855,342

2,803,697

Non-controlling interests

(3,284,143)

(1,331,340)

Total equity

2,572,570

1,472,357

Total liabilities and equity

$

22,718

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

For the

Three Months Ended

March 31,

For the

Year Ended

March 31,

2021

2020

2021

2020

Revenues

$

1,984,672

$

2,012,146

$

6,160,534

$

15,575

Cost of revenues

(2,380,906)

(1,647,337)

(5,969,492)

(12,280,238)

Gross profit (loss)

(396,234)

364,809

191,042

3,375,337

Operating expenses

Selling,general and administrative expenses

(3,162,220)

(2,238,794)

(10,273,104)

(5,496,955)

Recovery of (provision for) doubtful accounts

(78,477)

(3,176,087)

28,358

(3,404,336)

Impairments of long-lived assets

(8,633)

(70,984)

(130,839)

(70,984)

Total operating expenses

(3,249,330)

(5,485,865)

(10,585)

(8,972,275)

Loss from operations

(3,645,564)

(5,121,056)

(10,184,543)

(5,596,938)

Other income (expense)

Other income (expense),net

31,093

8,017

87,888

(45,347)

Interest expense

(8,066)

(17,031)

(45,764)

(96,624)

Interest expense on finance leases

(145,745)

(373,407)

(733,202)

(373,407)

Change in fair value of derivative liabilities

(266,631)

287,318

(1,710,415)

1,796,724

Total other income (expense),net

(389,349)

(95,103)

(2,401,493)

1,281,346

Loss before income taxes

(4,034,913)

(5,216,159)

(12,586,036)

(4,315,592)

Income tax expenses

(163)

(234)

(14,627)

(33,184)

Net lossfrom continuing operations

(4,035,076)

(5,393)

(12,600,663)

(4,348,776)

Net income (loss) from discontinued operations,net of applicable

income taxes

16,375

6,600

(61,976)

(5,587,027)

Net loss

(4,018,701)

(5,209,793)

(12,662,639)

(9,935,803)

Net loss attributable to non-controlling interests from continuing operations

900,884

1,351,742

2,302,581

1,262,478

Net loss attributable to stockholders

$

(3,117,817)

$

(3,858,051)

$

(10,360,058)

$

(8,673,325)

Net loss

$

(4,701)

$

(5,793)

$

(12,639)

$

(9,803)

Other comprehensive income (loss)

Foreign currency translation adjustment

(99,217)

99,070

(314,669)

(154,913)

Comprehensive loss

(4,918)

(5,110,723)

(12,977,308)

(10,090,716)

Total comprehensive loss attributable to noncontrolling interests

(1,247,103)

(1,367,151)

(2,286,057)

(1,338,684)

Total comprehensive loss attributable to stockholders

$

(2,870,815)

$

(3,743,572)

$

(10,691,251)

$

(8,752,032)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (CONTINUED)

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

For the Three Months Ended

March 31,

For the Year Ended

March 31,

2021

2020

2021

2020

Weighted average number of common stock

Basic and diluted

47,143,967

29,818

39,430,889

28,023,498

Earnings (loss) per share - basic and diluted

Continuing operations

$

(0.07)

$

(0.13)

$

(0.26)

$

(0.11)

Discontinued operations

$

(0.00)

$

0.07

$

(0.00)

$

(0.13)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

For the Year Ended

March 31,

2021

2020

Cash Flows from Operating Activities:

Net loss

$

(12,803)

Net loss from discontinued operations

(61,027)

Net loss from continuing operations

(12,776)

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

Depreciation and amortization of property and equipment

260,592

103,009

Stock based compensation expense

445,000

133,150

Amortization of right-of-use assets

4,316,162

1,553,523

Amortization of intangible assets

107,765

283

Provision (recovery) for doubtful accounts

(28,358)

3,336

Impairments of long-lived assets

130,839

70,984

Loss (gain) on disposal of equipment

(425)

3,608

Change in fair value of derivative liabilities

1,415

(1,724)

Change in operating assets and liabilities

Accounts receivable

49,624

(3,047,955)

Inventories

172,626

437,012

Prepayments,other receivables and other assets

(864,420)

(964,889)

Finance lease receivables

278,406

(1,185,031)

Accounts payable

(10,251)

4,144

Advances from customers

55,859

61,409

Income tax payable

(168)

(4,582)

Accrued expenses and other liabilities

4,083,378

1,138,316

Operating lease liabilities

(130,534)

(94,235)

Operating lease liabilities - related parties

(195,519)

2,125

Net cash used in operating activities from continuing operations

(2,219,672)

(4,530,293)

Net cash used in operating activities from discontinued operations

(1,716,395)

(1,917,371)

Net Cash used in Operating Activities

(3,936,067)

(6,447,664)

Cash Flows from Investing Activities:

Purchases of property and equipment

(2,491,296)

(495,241)

Prepayment of intangible assets

(25,347)

(470,000)

Cash acquired from XXTX,net of cash paid to XXTX[1]

8,065

-

Net cash used in investing activities from continuing operations

(2,508,578)

(965,241)

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

(2,284)

1,825

Net Cash Used in Investing Activities

(2,510,862)

(963,416)

Cash Flows from Financing Activities:

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

5,261,297

-

Net proceeds from exercise of underwriters' over-allotment option

837,000

-

Net proceeds from issuance of common stock in registered direct public offering

5,905

5,142,124

Net proceeds from issuance of common stock upon warrants exercised

683,046

111

Borrowings from financial institutions

572,035

55,159

Repayments to third parties

-

(604,562)

Loan to related party

(10,579)

-

Borrowings from related parties and affiliates

-

1,305,166

Repayments from related parties

-

108,566

Repayments to related parties and affiliates

(37,445)

(1,405,356)

Repayments of current borrowings from financial institutions

(529,288)

(145,048)

Release of escrow receivable

-

600,000

Principal payments of finance lease liabilities

(2,230,765)

(975,958)

[1]XXTX is the entity associated with Senmiao's Xixingtianxia ride-hailing platform.

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Expressed in U.S. dollar,

2021

2020

Net cash provided by financing activities from continuing operations

10,289,206

4,080,202

Net cash used in financing activities from discontinued operations

(29,429)

(648,405)

Net Cash Provided by Financing Activities

10,259,777

3,431,797

Effect of exchange rate changes on cash and cash equivalents

(208,800)

(197,200)

Net increase (decrease) in cash and cash equivalents

3,604,048

(4,483)

Cash and cash equivalents,beginning of year

844,027

5,020,510

Cash and cash equivalents,end of year

4,075

844,027

Less: Cash and cash equivalents from discontinued operations

-

(10,139)

Cash and cash equivalents from continuing operations,end of year

$

4,888

Supplemental Cash Flow Information

Cash paid for interest expense

$

45,764

$

96,624

Non-cash Transaction in Investing and Financing Activities

Prepayment in exchange of intangible assets

$

-

$

280,000

Recognition of right-of-use assets and lease liabilities

$

3,785,526

$

549,679

Recognition of right-of-use assets and lease liabilities,related parties

$

-

$

343,819

Acquisition of equipment through prepayment and financing lease

$

941,263

$

-

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

$

997,193

$

3,150,006

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

$

1,771,213

$

1,010,752

Issuance of restricted stock units from accrued expenses and other liabilities

$

-

$

44,200

Acquisition of XXTX with payables

$

317,835

$

-

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