Senmiao Technology Reports Fiscal 2023 Second Quarter Financial Results

CHENGDU,China,Nov. 15,2022 --Senmiao Technology Limited ("Senmiao") (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 its fiscal 2023 second quarter ended September 30,2022.

Please note that 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") had no impact on Senmiao's consolidated interim financial information for the three months ended September 30,2022,as a result of deconsolidation of these former VIEs effective March 31,2022. The financial results from these former VIEs were classified as discontinued operations in the comparative period in 2021,which were previously classified under Automobile Transaction and Related Services.

Fiscal 2023 Second Quarter Financial and Operating Highlights

Total revenues of $2.2 million from continuing operations,compared to $1.1 million in the prior-year period.

From October 23,2020,the date Senmiao launched its online ride-hailing platform,to September 30,approximately 25.1 million rides were completed (including orders completed on the platform operated by Senmiao and orders completed on partner platforms,such as Meituan,Xiehua and Anma) with fares paid by riders totaling $81.7 million.

Loss from operations of $1.6 million,compared to loss of $2.3 million in the prior-year period,primarily as a result of a $0.7 million increase of gross profit.

Net loss from continuing operations of $1.2 million,compared to net income of $0.7 million in the prior-year period,primarily as a result of a $3.0 million gain due to the change in fair value of derivative liabilities in the prior-year period.

Management Commentary

Xi Wen,Chairman,Chief Executive Officer and President of Senmiao,stated,"We were pleased to have achieved strong top line growth during the second quarter of fiscal 2023 due to increased revenue contributions from our automobile rental and online ride-hailing platform services businesses from the prior-year period. This is particularly impressive given the impact of lockdowns in Chengdu on our business as we continue to navigate the ongoing pandemic environment. During the quarter,we generated a gross profit as the online ride-hailing platform services business has yielded increasing margins as we have gained efficiencies under the new business model where Senmiao incurs much lower expenses related to driver incentives. We are seeing the synergies between our automobile rental and online ride-hailing platform services businesses at work,resulting in tangible growth in both business lines. We believe these two business lines will continue to be our key growth drivers. We remain focused on providing quality online ride-hailing services for customers in our key cities while continuing to support and empower our drivers."

Mr. Wen continued,"We continued expanding our online ride-hailing business to new cities and building symbiotic partnerships during the quarter ended September 30,2022. We launched our online ride-hailing platform in the cities of Tianjin and Foshan,increasing Senmiao's presence to a total of 26 cities. We also initiated cooperative partnerships in vehicle rental and leasing services,new energy vehicle charging services,and vehicle and driver resources in two of our key cities,Chengdu and Guangzhou,to further support our growth. We believe these partnerships present immediate value and potential future opportunities for our drivers. We plan to continue strengthening and expanding our partnership base to enable Senmiao to grow into new regions and improve access to our services."

Financial Review

Revenues

Total revenues from continuing operations were $2.2 million for the second quarter endedSeptember 30,compared to $1.1 million in the prior-year period. The increase was largely due to increased contributions from operating lease revenues from automobile rentals and online ride-hailing platform services.

During the second quarter ended September 30,the automobile rental business generated operating lease revenues of $0.9 million,compared to $0.4 million in the prior-year period,due to a significant increase in the number of automobiles leased. The online ride-hailing platform services business generated revenues of $1.0 million,compared to $0.6 million in the prior-year period.

Cost of Revenues

Cost of revenues from continuing operations increased to $1.9 million for the second quarter ended September 30,compared to$1.5 million in the prior-year period,primarily due to a $0.3 million increase in costs of automobiles under operating leases as a result of business expansion and a $0.2 million increase in costs of automobile sold,partially offset by a $0.1 million decrease in direct expense and technical service fees related to online ride-hailing platform services.

Gross Profit (Loss)

Gross profit from continuing operations was$0.3 million for the second quarter ended September 30,compared to a gross loss of $0.4 million in the prior-year period,primarily due to the increase in gross profit from online ride-hailing platform services.

Selling,General and Administrative Expenses

Selling,general and administrative ("SG&A") expenses from continuing operations decreased by 16.4% to $1.5 million for the second quarter ended September 30,compared to $1.8 million in the prior-year period. The decrease was a result of Senmiao's cost control initiatives during the quarter,mainly attributable to a $0.2 million decrease in salary and employee benefits as the number of our employee decreased from 202 to 190,a $0.1 million decrease in office rental expenditures,as well as decreased professional service fees.

Net Income (Loss) from Continuing Operations

Net loss from continuing operations for the second quarter ended September 30,was $1.2 million,which was primarily as a result of a $3.0 million gain due to the change in fair value of derivative liabilities in the prior-year period.

Earnings (Loss) per Share

Loss per share for continuing operations wasapproximately $0.15 based on a weighted average number of basic and diluted common stock of 7.0 million,compared to earnings per share of approximately $0.19 based on a weighted average number of basic and diluted common stock of 5.5 million.

Financial Position

As ofSeptember 30,Senmiao had cash and cash equivalents of $2.0 million,compared to $1.2 million as of March 31,for its continuing operations. Total stockholders' equity was $6.3 million as of September 30,compared to $8.1 million as of March 31,2022.

Further information regarding Senmiao's results of operations for the quarter endedSeptember 30,2022can be found in Senmiao's Form 10-Q,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. In China

Carolyne Sohn,Vice President Lucy Ma,Associate

+1 408-538-4577 +86 10 5661 7012

csohn@equityny.com lma@equityny.com

Alice Zhang,Investor Relations Analyst

+1 212-836-9610

azhang@equityny.com

© 2022 Senmiao Technology Ltd. All rights reserved.

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

September30,

March31,

2022

2022

(Unaudited)

ASSETS

Current assets

Cash,and cash equivalents

$

1,965,532

$

1,185,221

Accounts receivable,net,current portion

205,397

418,022

Accounts receivable,a related party

23,301

—

Inventories

—

286,488

Finance lease receivables,current portion

214,614

314,264

Prepayments,other receivables and other assets,net

1,681,299

2,713,208

Due from related parties,current portion,net

442,461

682,335

Total current assets

4,532,604

5,599,538

Property and equipment,net

4,235,056

5,658,773

Other assets

Operating lease right-of-use assets,net

209,768

109,621

Operating lease right-of-use assets,related parties

407,425

515,906

Financing lease right-of-use assets,net

39,665

305,933

Intangible assets,net

855,198

959,551

Accounts receivable,non-current

—

69

Finance lease receivables,non-current

57,382

92,980

Due from a related party,non-current

5,484,218

6,635,746

Total other assets

7,053,656

8,619,806

Total assets

$

15,821,316

$

19,878,117

LIABILITIES,MEZZANINE EQUITY AND EQUITY

Current liabilities

Borrowings from a financial institution

$

43,239

$

145,542

Accounts payable

3,546

14,446

Advances from customers

148,513

120,629

Accrued expenses and other liabilities

2,651,217

2,444,367

Due to related parties and affiliates

119,143

11,682

Operating lease liabilities

89,089

50,177

Operating lease liabilities - related parties

337,076

330,781

Financing lease liabilities

39,665

304,557

Derivative liabilities

604,111

2,215,204

Current liabilities - discontinued operations

470,966

528,426

Total current liabilities

4,506,565

6,165,811

Other liabilities

Operating lease liabilities,non-current

124,677

47,910

Operating lease liabilities,non-current - related parties

200,346

226,896

Financing lease liabilities,non-current

—

1,376

Deferred tax liability

41,446

46,386

Total other liabilities

366,469

322,568

Total liabilities

4,873,034

6,488,379

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Expressed in U.S. dollars,

2022

2022

(Unaudited)

Commitments and contingencies

Mezzanine Equity

Series A convertible preferred stock (par value $1,000 per share,

5,000 shares authorized; 1,741 and 5,000 shares issued and outstanding at September 30,2022 and March 31,respectively)

285,802

820,799

Stockholders' equity

Common stock (par value $0.0001 per share,10,000,000

shares authorized; 7,682,908 and 6,186,783 shares issued and outstanding at September 30,respectively)*

782

630

Additional paid-in capital

43,337,879

42,803,033

Accumulated deficit

(35,352,182)

(34,601,545)

Accumulated other comprehensive loss

(1,716,583)

(109,454)

Total Senmiao Technology Limited stockholders' equity

6,269,896

8,092,664

Non-controlling interests

4,392,584

4,476,275

Total equity

10,662,480

12,568,939

Total liabilities,mezzanine equity and equity

$

15,117

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

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

For the Three Months Ended

September30,

For the Six Months Ended

September30,

2022

2021

2022

2021

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Revenues

Revenues

$

2,164,089

$

1,113,719

$

4,290,425

$

1,492,473

Revenues,a related party

77,113

—

292,573

—

Total revenues

2,241,202

1,719

4,582,998

1,473

Cost of revenues

Cost of revenues

(1,830,224)

(1,548,857)

(3,665,698)

(3,920,822)

Cost of revenues,a related party

(102,160)

—

(148,502)

—

Total cost of revenues

(1,932,384)

(1,814,200)

(3,822)

Gross profit (loss)

308,818

(435,138)

768,798

(2,428,349)

Operating expenses

Selling,general and administrative expenses

(1,527,731)

(1,828,438)

(3,447,078)

(4,400,186)

Provision for doubtful accounts,net of recovery

(366,293)

(45,305)

(344,436)

(118,783)

Impairments of inventories

—

—

(3,085)

—

Impairments of long-lived assets and goodwill

—

(3,151)

-

(140,541)

Total operating expenses

(1,894,024)

(1,876,894)

(3,794,599)

(4,659,510)

Loss from operations

(1,585,206)

(2,312,032)

(3,025,801)

(7,087,859)

Other income (expense)

Other income (expense),net

423,972

21,140

487,125

(15,470)

Interest expense

—

(667)

—

(6,512)

Interest expense on finance leases

(1,153)

(14,904)

(8,301)

(30,757)

Change in fair value of derivative liabilities

(17,417)

3,017,734

1,611,093

1,648,450

Total other income,net

405,402

3,023,303

2,089,917

1,595,711

Income (loss) before income taxes

(1,179,804)

711,271

(935,884)

(5,148)

Income tax expense

—

(11)

—

(11)

Net income (loss) from continuing operations

(1,260

(935,159)

Loss from discontinued operations,net of applicable income taxes

—

(833,185)

—

(2,402)

Net loss

(1,804)

(121,925)

(935,884)

(7,561)

Net loss attributable to non-controlling interests from continuing operations

96,314

325,222

185,247

1,143,767

Net loss attributable to non-controlling interests from discontinued operations

—

216,629

—

520,105

Net income (loss) attributable to the Company's stockholders

$

(1,083,490)

$

419,926

$

(750,637)

$

(5,689)

Net loss

$

(1,804)

$

(121,925)

$

(935,884)

$

(7,561)

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (CONTINUED)

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

For the Three Months Ended

September 30,

For the Six Months Ended

September 30,

2022

2021

2022

2021

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Other comprehensive loss

Foreign currency translation adjustment

(719,920)

(3,608)

(1,505,573)

(22,180)

Comprehensive loss

(1,899,724)

(125,533)

(2,441,457)

(7,514,741)

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

7,057

(547,866)

(83,691)

(1,222)

Total comprehensive income (loss) attributable to stockholders

$

(1,906,781)

$

422,333

$

(2,357,766)

$

(5,833,519)

Weighted average number of common stock

Basic and diluted*

7,048,187

5,538,676

6,678,749

5,406,641

Earnings (loss) per share - basic and diluted*

Continuing operations

$

(0.15)

$

0.19

$

(0.11)

$

(0.80)

Discontinued operations

—

(0.11)

—

(0.27)

Total earnings (loss) per share - basic and diluted*

$

(0.15)

$

0.08

$

(0.11)

$

(1.07)

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

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollars)

For the Six Months Ended September30,

2022

2021

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities:

Net loss

$

(935,561)

Net loss from discontinued operations

—

(2,402)

Net loss from continuing operations

(935,159)

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

Depreciation and amortization of property and equipment

606,482

426,958

Amortization of right-of-use assets

417,836

392,978

Amortization of intangible assets

93,724

74,643

Provision for doubtful accounts,net of recovery

344,436

118,783

Impairments of inventories

3,085

—

Impairments of long-lived assets

—

140,541

Gain on disposal of long-lived assets

(350,967)

—

Change in fair value of derivative liabilities

(1,093)

(1,450)

Change in operating assets and liabilities

Accounts receivable

179,126

76,107

Accounts receivable,a related party

(24,624)

—

Inventories

324,140

(134,268)

Prepayments,other receivables and other assets

766,235

412,387

Finance lease receivables

134,091

401,592

Accounts payable

(9,860)

132,186

Advances from customers

43,328

(1,218)

Income tax payable

—

160

Accrued expenses and other liabilities

557,047

91,899

Operating lease liabilities

(19,052)

(93,648)

Operating lease liabilities - related parties

(5,845)

(15,084)

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

512,205

(5,116,593)

Net cash used in operating activities from discontinued operations

—

(888,270)

Net Cash Provided by (Used in) Operating Activities

512,205

(6,004,863)

Cash Flows from Investing Activities:

Purchases of property and equipment

(1,900)

(2,162,825)

Cash received from disposal of long-lived assets

443,054

—

Purchases of intangible assets

(26,893)

—

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

414,261

(2,825)

Net cash provided by investing activities from discontinued operations

—

21,830

Net Cash Provided by (Used in) Investing Activities

414,140,995)

Cash Flows from Financing Activities:

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

offering

—

5,771,053

Net proceeds from issuance of common stock upon warrants exercised

—

22,015

Borrowings from a financial institution

—

317,850

Loan to a related party

—

(4,283,794)

Borrowings from related parties and affiliates

387,152

800,000

Repayments to related parties

—

(172,528)

Repayments of current borrowings from a financial institution

(91,389)

(318,575)

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Expressed in U.S. dollars)

For the Six Months Ended September30,

2022

2021

(Unaudited)

(Unaudited)

Principal payments of finance lease liabilities

(263,688)

(203,115)

Net cash provided by financing activities from continuing operations

32,075

1,906

Net cash provided by financing activities from discontinued operations

—

3,585

Net Cash Provided by Financing Activities

32,075

5,439,491

Effect of exchange rate changes on cash and cash equivalents

(178,230)

24,396

Net increase (decrease) in cash and cash equivalents

780,311

(2,971)

Cash and cash equivalents,beginning of the period

1,221

4,448,075

Cash and cash equivalents,end of the period

1,532

1,766,104

Less: Cash and cash equivalents from discontinued operations

—

132,584

Cash and cash equivalents from continuing operations,end of period

$

1,633,520

Supplemental Cash Flow Information

Cash paid for interest expense

$

—

$

27,648

Non-cash Transaction in Investing and Financing Activities

Recognition of right-of-use assets and lease liabilities

$

170,025

$

108,201

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

$

64,649

$

180,307

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

$

—

$

3,562,404

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

exercised

$

—

$

45,674

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