Senmiao Technology Reports Fiscal 2022 Year-end Financial Results

CHENGDU,China,July 15,2022 -- Senmiao Technology Limited ("Senmiao" or the "Company") (Nasdaq: AIHS),a financing and servicing company focused on the online ride-hailing industry in China,as well as an operator of its own online ride-hailing platform,today announced financial results for the fiscal year ended March 31,2022.

Please note that the following financial results reflect the deconsolidation of the financial figures of Senmiao's former variable interest entities ("VIEs") Sichuan Senmiao Ronglian Technology Co.,Ltd. ("Sichuan Senmiao"),Sichuan Jinkailong Automobile Leasing Co.,Ltd. ("Jinkailong") and Chengdu Youlu Technology Ltd. ("Youlu"),as of March 31,2022. Jinkailong's and Youlu's business results have now been classified as discontinued operations but were previously classified under Automobile Transaction and Related Services.

Fiscal 2022 Financial and Operating Highlights

Total revenues of $4.9 million from continuing operations,a 124.5% increase from $2.2 million in the prior fiscal year

From October 23,2020,the date Senmiao launched its online ride-hailing platform,to March 31,2022,approximately 20 million rides were completed through the platform (including orders completed on the platform operated by Senmiao and orders completed on partner platforms,such as Meituan) with fares paid by riders totaling $63.3 million.

Net loss from continuing operations of $5.6 million,compared to $7.5 million in the prior fiscal year

Management Commentary

Xi Wen,Chairman,Chief Executive Officer and President of Senmiao,stated,"Despite ongoing challenges presented by the pandemic environment in China,we are pleased with the significant growth we have achieved in our automobile transaction and related service and online ride-hailing platform services businesses,which drove our impressive top line results for fiscal year 2022. With our equity investee company,we leased a total of over 2,300 vehicles in fiscal 2022,compared to 1,200 in fiscal 2021,which resulted in a 666% year-over-year increase in rental income. We believe our continuous efforts in shifting our business focus to these new lines of business have begun to exhibit remarkable results,and we are optimistic about their future growth potential,which will continue to fuel top line growth for Senmiao as we continue to explore new regional markets. As of March 31,our platform has helped facilitate approximately 17 million rides since launch,with an additional 3 million rides completed on our partners' platforms. Our ride-hailing services are now available in 20+ cities throughout China."

Mr. Wen continued,"During fiscal year 2022,Senmiao strengthened our partnership base,establishing and expanding upon relationships with companies that possess a significant national presence and the resources to help us enter new local regions. This has enabledus to significantly grow our main businesses. We believe we are in a strong position to continue growing our online ride-hailing platform,which we anticipate will have a positive impact on our auto rental business as our replicable model of offering a flexible automobile rental option has been well received by our online ride-hailing drivers. With that in mind,Senmiao plans to provide a series of product solutions to increase the number of our automobiles for operating leases. We will remain focused on becoming a leading financing and servicing company and a significant player in the online ride-hailing market in China."

Financial Review

Revenues

Total revenues from continuing operations were $4.9 million for the year endedMarch 31,a 124.5% increase from $2.2 million in the prior fiscal year. This increase was largely due to increased contributions from operating lease revenues from automobile rentals and online ride-hailing platform services.

During the year ended March 31,Senmiao continued to shift its business focus to automobile rental options for ride-hailing drivers while developing its online ride-hailing platform services business. As a result,the automobile rental business generated operating lease revenues of $1.7 million for the year ended March 31,compared to $0.2 million in the prior fiscal year,due to a significant increase in the number of automobiles leased. The online ride-hailing platform services business generated revenues of $2.7 million,a 195.1% increase from $0.9 million in the prior fiscal year.

Cost of Revenues

Cost of revenues from continuing operations increased to $6.5 million for the year ended March 31,from$2.0 million in the prior fiscal year,primarily due to increased expenses related to costs of automobiles under operating leases and direct expense and technical service fees related to Senmiao's online ride-hailing platform.

Gross Loss (Profit)

Gross loss from continuing operations was$1.6 million for the year ended March 31,compared to gross profit from continuing operations of $0.2 million in the prior fiscal year,due to the significant increase in cost of revenues as a result of the rapid expansion of the Company's automobile leasing and online ride-hailing platform services businesses. Senmiao leased and sub-leased approximately 400 automobiles to online ride-haling drivers through its former VIE Jinkailong during the year ended March 31,2022. Rental income of approximately $1.3 million from Jinkailong was eliminated in the consolidated financial statements while sub-leasing income from these automobiles of approximately $1.8 million was recorded in loss of discontinued operations.

Selling,General and Administrative Expenses

Selling,general and administrative expenses for continuing operations increased to $9.5million for the year ended March 31,compared to $5.9 million in the prior fiscal year. The increase was primarily due to increased salary and employee benefit expenses as a result of hiring additional staff,increased office rental expense and charges,and increase in advertising and promotion expenses related to the online ride-hailing platform.

Net Loss

Net loss from continuing operations for the year ended March 31,was $5.6 million,compared to $7.5 million in the prior fiscal year. The year-over-year improvement was primarily due to an $8.7 million increase in the fair value change of derivative liabilities related to warrants issued in the Company's previous offerings,offset by the increase in the loss from operations of $5.6 million.

Loss per Share

Loss per share for continuing operations wasapproximately $1.66 based on a weighted average number of basic and diluted common stock of 5.7 million,compared to approximately $1.65 based on a weighted average number of basic and diluted common stock of 3.9 million.

On April 5,Senmiao announced a 1-for-10 reverse stock split with trading to begin on a split-adjusted basis at the market open on April 6,2022. Weighted average number of basic and diluted common stock numbers noted herein were given retroactive effect to account for the 1-for-10 reverse stock split.

Results from Discontinued Operations

For the year ended March 31,results from discontinued operations (primarily from Senmiao's former VIE Jinkailong as noted above) and the gain from their deconsolidation are as follows:

For the year ended March 31,

2022

2021

Revenues

$6,830,116

$3,978,847

Cost of revenues

$(5,183,806)

$(3,985,413)

Gross profit (loss)

$1,646,310

$(6,566)

Selling,general and administrative expenses

$(4,139,800)

$(4,455,967)

Loss from discontinued operations,net of applicable income taxes

$(2,747,209)

$(5,187,214)

Net gain from deconsolidation of VIEs - discontinued operations

$10,975,101

-

Gain (loss) from discontinued operations

$8,227,892

$(5,214)

Financial Position

As ofMarch 31,Senmiao had cash and cash equivalents of $1.2 million,compared to $4.3 millionas ofMarch 31,2021,for its continuing operations. Total stockholders' equity was $8.1 million as of March 31,compared to $5.9 million as of March 31,2021.

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 today.

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 purchases and financing,management,operating leases,guarantees 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. Senmiao routinely provides important updates 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 those relating to the operation of Senmiao's ride-hailing platform) 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.

Carolyne Sohn,Vice President

+1 415-568-2255

csohn@equityny.com

In China

Lucy Ma,Associate

+86 10 5661 7012

lma@equityny.com

© 2022 Senmiao Technology Ltd. All rights reserved.

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS

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

March 31,

March 31,

2022

2021

ASSETS

Current assets

Cash,and cash equivalents

$

1,185,221

$

4,340,529

Accounts receivable,net,current portion

418,022

502,031

Inventories

286,488

127,933

Finance lease receivables,current portion

314,264

541,605

Prepayments,other receivables and other assets,net

2,713,208

2,660,083

Due from related parties

682,335

—

Current assets - discontinued operations

—

2,720,825

Total current assets

5,599,538

10,893,006

Property and equipment,net

Property and equipment,net

5,658,773

3,251,331

Property and equipment,net - discontinued operations

—

454,408

Total property and equipment,net

5,773

3,705,739

Other assets

Operating lease right-of-use assets,net

109,621

233,751

Operating lease right-of-use assets,related parties

515,906

580,367

Financing lease right-of-use assets,net

305,933

577,079

Intangible assets,net

959,551

968,131

Goodwill

—

135,388

Accounts receivable,non-current

69

61,943

Finance lease receivables,non-current

92,980

473,472

Due from a related party,noncurrent

6,635,746

—

Other assets - discontinued operations

—

4,674,403

Total other assets

8,619,806

7,704,534

Total assets

$

19,878,117

$

22,303,279

LIABILITIES,MEZZANINE EQUITY AND EQUITY

Current liabilities

Borrowings from financial institutions

$

145,542

$

—

Accounts payable

14,446

44,769

Advances from customers

120,629

110,173

Accrued expenses and other liabilities

2,444,367

2,873,227

Due to related parties and affiliates

11,682

82,909

Operating lease liabilities

50,177

109,813

Operating lease liabilities - related parties

330,781

243,726

Financing lease liabilities

304,557

358,135

Derivative liabilities

2,215,204

1,278,926

Current liabilities - discontinued operations

528,426

11,677,266

Total current liabilities

6,165,811

16,778,944

Other liabilities

Operating lease liabilities,non-current

47,910

95,886

Operating lease liabilities,non-current - related parties

226,896

341,549

Financing lease liabilities,non-current

1,376

218,944

Deferred tax liability

46,386

44,993

Other liabilities - discontinued operations

—

2,250,393

Total other liabilities

322,568

2,951,765

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Expressed in U.S. dollars,

2022

March 31,

2021

Total liabilities

$

6,488,379

$

19,730,709

Commitments and contingencies

Mezzanine Equity (redeemable)

Series A convertible preferred stock (par value $0.0001 per share,5,000 shares authorized; 5,000 and

0 shares issued and outstanding at March 31,2022 and 2021,respectively),net of issuance costs of

$118,344

820,799

—

Stockholders' equity

Common stock (par value $0.0001 per share,10,000,000 shares authorized;6,186,783

and 4,073 shares issued and outstanding at March 31,respectively)*

630

498

Additional paid-in capital

42,803,033

40,759,807

Accumulated deficit

(34,601,545)

(34,064,921)

Accumulated other comprehensive loss

(109,454)

(838,671)

Total Senmiao Technology Limited stockholders' equity

8,092,664

5,856,713

Non-controlling interests

4,476,276

(3,284,143)

Total equity

12,568,939

2,572,570

Total liabilities and equity

$

19,279

*Giving retroactive effect to the 1-for-10 reverse stock split effected on April 6,2022

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Expressed in U.S. dollars,except for share and per share amounts)

For the Year Ended

March 31,

2022

2021

Revenues

$

4,913,102

$

2,188,840

Cost of revenues

(6,511,031)

(1,984,079)

Gross profit (loss)

(1,597,929)

204,761

Operating expenses

Selling,general and administrative expenses

(9,525,408)

(5,905,579)

Provision for doubtful accounts,net of recovery

(235,279)

(299,658)

Impairments of inventories

(60,398)

—

Impairments of long-lived assets and goodwill

(142,974)

(10,953)

Total operating expenses

(9,964,059)

(6,216,190)

Loss from operations

(11,561,988)

(6,011,429)

Other income (expense)

Other income (expense),net

(107,444)

301,269

Interest expense

(5,893)

—

Interest expense on finance leases

(55,844)

(46,518)

Change in fair value of derivative liabilities

6,482

(1,710,415)

Issuance cost incurred for issuing series A convertible preferred stock

(821,892)

—

Total other income (expense),net

5,960,409

(1,664)

Loss before income taxes

(5,579)

(7,467,093)

Income tax expense

(4,566)

(8,332)

Net lossfrom continuing operations

(5,606,145)

(7,475,425)

Discontinued operations:

Loss from discontinued operations,net of applicable income taxes

(2,209)

(5,214)

Net gain from deconsolidation of VIEs - discontinued operations

10,101

—

Gain (loss) from discontinued operations

8,892

(5,214)

Net income (loss)

2,621,747

(12,662,639

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

(3,872,645)

970,019

Net loss attributable to non-controlling interests from discontinued operations

714,274

1,332,562

Net loss attributable to stockholders

$

(536,624)

$

(10,360,058)

Net income (loss)

$

2,747

$

(12,639)

Other comprehensive income (loss)

Foreign currency translation adjustment

64,470

(314,669)

Comprehensive income (loss)

2,686,217

(12,977,308)

Less: Total comprehensive income (loss) attributable to noncontrolling interests

3,142,520

(2,286,057)

Total comprehensive loss attributable to stockholders

$

(456,303)

$

(10,691,251)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (CONTINUED)

(Expressed in U.S. dollars,except for share and per share amounts)

For the Year Ended

March 31,

2022

2021

Weighted average number of common stock

Basic and diluted

5,726,997

3,943,089

Earnings (loss) per share - basic and diluted

Continuing operations

$

(1.66)

$

(1.65)

Discontinued operations

$

1.56

$

(0.98)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

For the Year Ended

March 31,

2022

2021

Cash Flows from Operating Activities:

Net income (loss)

$

2,639)

Net income (loss) from discontinued operations

8,214)

Net loss from continuing operations

(5,425)

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

Depreciation and amortization of property and equipment

956,400

85,530

Stock based compensation expense

653,000

445,000

Issuance cost incurred for issuing series A convertible preferred stock

821,892

-

Amortization of right-of-use assets

955,443

398,292

Amortization of intangible assets

160,831

107,765

Provision for doubtful accounts,net of recovery

235,279

299,658

Impairments of inventories

60,398

-

Impairments of long-lived assets

142,974

10,953

Gain on disposal of equipment

-

(425)

Change in fair value of derivative liabilities

(6,482)

1,415

Change in operating assets and liabilities

Accounts receivable

4,456

162,828

Inventories

(260,464)

172,626

Prepayments,other receivables and other assets

28,254

(1,366,724)

Finance lease receivables

634,103

348,919

Accounts payable

(31,434)

(6,067)

Advances from customers

6,678

47,895

Income tax payable

-

(168)

Accrued expenses and other liabilities

(377,965)

2,123,010

Operating lease liabilities

(240,051)

(64,701)

Operating lease liabilities - related parties

(228,281)

(195,519)

Net cash used in operating activities from continuing operations

(9,036,114)

(3,196,138)

Net cash used in operating activities from discontinued operations

(123,167)

(739,929)

Net Cash used in Operating Activities

(9,159,281)

(3,936,067)

Cash Flows from Investing Activities:

Purchases of property and equipment

(3,223,992)

(2,293,415)

Purchases of intangible assets

(141,730)

(25,347)

Cash released upon termination of a VIE

(193)

-

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

-

8,065

Net cash used in investing activities from continuing operations

(3,365,915)

(2,310,697)

Net cash used in investing activities from discontinued operations

(111,210)

(200,165)

Net Cash Used in Investing Activities

(3,477,125)

(2,510,862)

Cash Flows from Financing Activities:

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

5,771,053

5,743,905

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

offering

-

5,261,297

Net proceeds from issuance of common stock upon warrants exercised

22,015

683,046

Net proceeds from issuance of series A convertible preferred stock and warrants in a

private placement offering

4,369,937

-

Net proceeds from exercise of underwriters' over-allotment option

-

837,000

Borrowings from a financial institution

183,390

-

Loan to related parties

-

(101,142)

SENMIAO TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Expressed in U.S. dollars,

2021

2020

Repayments to related parties and affiliates

(117,761)

(37,445)

Repayments of current borrowings from financial institutions

(39,613)

-

Principal payments of finance lease liabilities

(433,611)

(2,230,765)

Net cash provided by financing activities from continuing operations

9,755,410

10,155,896

Net cash provided by financing activities from discontinued operations

-

103,881

Net Cash Provided by Financing Activities

9,259,777

Effect of exchange rate changes on cash and cash equivalents

(381,858)

(208,800)

Net (decrease) increase in cash and cash equivalents

(3,262,854)

3,604,048

Cash and cash equivalents,beginning of year

4,448,075

844,027

Cash and cash equivalents,end of year

1,221

4,075

Less: Cash and cash equivalents from discontinued operations

-

(107,546)

Cash and cash equivalents from continuing operations,end of year

$

1,529

Supplemental Cash Flow Information

Cash paid for interest expense

$

5,893

$

45,764

Non-cash Transaction in Investing and Financing Activities

Recognition of right-of-use assets and lease liabilities

$

273,555

$

3,785,526

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

$

181,620

$

-

Recognition of other receivables from Jinkailong upon deconsolidation

$

7,298,208

-

Acquisition of equipment through prepayment and financing lease

$

-

$

941,263

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

$

7,932,341

$

997,193

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

$

45,674

$

1,213

Acquisition of XXTX with payables

$

-

$

317,835

Acquisition of XXTX's minority interest with issuance of common stock

$

1,972,717

$

-

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

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