Senmiao Technology Reports Fiscal 2023 Third Quarter Financial Results

CHENGDU,China,Feb. 15,2023 --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 the fiscal 2023 third quarter ended December 31,2022.

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 December 31,2022,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 Third Quarter Financial and Operating Highlights

Total revenues of $1.74 million from continuing operations,compared to $1.66 million in the prior-year period,primarily as a result of increased operating lease revenues from automobile rentals,which was partially offset by decreased revenues from online ride-hailing platform services.

From October 23,2020,the date Senmiao launched its online ride-hailing platform,to December 31,approximately 27.4 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 $88.7 million. As of February 14,2023,Senmiao operated in 26 cities in China,including three provincial capital cities.

Loss from operations of $1.3 million,compared to loss of $2.5 million in the prior-year period,primarily due to the Company's cost-cutting initiatives that directly resulted in significantly lower selling,general and administrative expenses.

Net loss from continuing operations was $1.0 million,compared to net income of $0.3 million in the prior-year period,primarily as a result of a $3.6 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,"During the first nine months of fiscal year 2023,we reported $6.3 million in revenues,more than doubling our top line from the prior-year period,achieving $1.0 million in gross profit,and significantly narrowing losses on the bottom line. We were pleased to have achieved slight revenue growth during the third quarter of fiscal year 2022,primarily driven by 53.0% growth in revenue from our automobile rental business. This was offset by lower revenue contributions from our online ride-hailing platform services business,which was significantly impacted by COVID-19 outbreaks in our key cities of Chengdu and Guangzhou,leading to fewer completed orders compared to the prior-year period. Since launching this business in October 2020,we have helped facilitate over 28.0 million rides in 26 cities as of the end of January 2023. As China's public health situation improves and we continue to expand partner relationships,we believe we are well positioned to grow our automobile rental and online ride-hailing platform services businesses,which we expect will be our key growth drivers."

Mr. Wen continued,"We have continued to establish strategic relationships with different partners for our online ride-hailing platform services business in cities where Senmiao operates across China,and we are pleased to report positive cash flow from our operating activities for the nine months ended December 31,2022. Since January 2023,China has moved away from its zero COVID strategy,which we believe will have an overall favorable impact on our business in the near term."

Financial Review

Revenues

Total revenues were $1.74 million for the fiscal third quarter endedDecember 31,compared to under $1.66 million in the prior-year period. The increase was mainly due to the $0.3 million increase in operating lease revenues from automobile rentals.This was partiallyoffset by lower revenue contributions from online ride-hailing platform services.

During the fiscal third quarter ended December 31,the automobile rental business generated operating lease revenues of $0.8 million,compared to $0.5 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 $0.8 million,compared to $1.0 million in the prior-year period. The decrease was primarily the result of fewer rides being completed due to COVID-19 outbreaks in Chengdu and Guangzhou,two of Senmiao's key cities,during the fiscal third quarter ended December 31,2022.

Cost of Revenues

Cost of revenues increased to $1.6 millionfor the fiscal third quarter endedDecember 31,compared to$1.5 millionin the prior-year period,primarily due to a $0.1 million increase in cost of automobiles under operating leases as a result of business expansion.

Gross Profit

Gross profit remained flat at$0.2 million for the fiscal third quarter endedDecember 31,compared to gross profit of $0.2 million in the prior-year period.

Selling,General and Administrative Expenses

Selling,general and administrative expenses decreased 48.7% to $1.4 million for the fiscal third quarter endedDecember 31,from $2.7 million in the prior-year period. The decrease was mainly attributable to the Company's implementation of initiatives to streamline expenses during the period,which resulted in a $0.8 million decrease in financial,legal and marketing consulting fees,a $0.3 million decrease in salary and employee benefit expenses,a $0.2 million decrease in advertising and promotion expenses for online ride-hailing platform services,and other expense reductions.

Net (Loss) Income from Continuing Operations

Net loss from Senmiao's continuing operations for the fiscal third quarter ended December 31,was $1.0 million,compared to net income of $0.3 million in the prior-year period. This was primarily the result of a $3.6 million gain from change in fair value of derivative liabilities related to warrants issued in Senmiao's historical offerings recognized in the prior-year period,compared to a gain of $0.03 million during the fiscal third quarter ended December 31,2022.

(Loss) Earnings per Share

Loss per share for continuing operations for the fiscal third quarter endedDecember 31,wasapproximately $0.13 based on a weighted average number of basic and diluted common stock of 7.7 million,compared to earnings per share of approximately $0.03 based on a weighted average number of basic and diluted common stock of 5.9 million in the prior-year period.

Financial Position

As ofDecember 31,Senmiao had cash and cash equivalents of$1.5 million,compared to$1.2 millionas ofMarch 31,2022. Total stockholders' equity was $5.7 million as of December 31,compared to $8.1 million as of March 31,2022.

Additional information regarding Senmiao's results of operations for this quarterly periodcan be found in Senmiao's Quarterly Report on Form 10-Q for the quarter ended December 31,to be filed with the Securities and Exchange Commission on the date of this earnings release.

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,Associate

+1 212-836-9610

azhang@equityny.com

© 2023 Senmiao Technology Ltd. All rights reserved.

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

December31,

March31,

2022

2022

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

1,537,609

$

1,185,221

Accounts receivable,net,current portion

204,763

418,022

Accounts receivable,a related party

9,816

—

Inventories

—

286,488

Finance lease receivables,current portion

170,337

314,264

Prepayments,other receivables and other assets,net

1,362,817

2,713,208

Due from related parties,current portion,net

659,299

682,335

Total current assets

3,944,641

5,599,538

Property and equipment,net

3,530,196

5,658,773

Other assets

Operating lease right-of-use assets,net

174,262

109,621

Operating lease right-of-use assets,related parties

139,787

515,906

Financing lease right-of-use assets,net

690,365

305,933

Intangible assets,net

819,671

959,551

Accounts receivable,noncurrent

—

69

Finance lease receivables,noncurrent

50,205

92,980

Due from a related party,noncurrent

5,351,735

6,635,746

Other non-current assets

837,731

—

Total other assets

8,063,756

8,619,806

Total assets

$

15,538,593

$

19,878,117

LIABILITIES,MEZZANNIE EQUITY AND EQUITY

Current liabilities

Borrowings from a financial institution

$

22,857

$

145,542

Accounts payable

61,090

14,446

Advances from customers

120,871

120,629

Accrued expenses and other liabilities

2,715,209

2,444,367

Due to related parties and affiliates

117,237

11,682

Operating lease liabilities

104,075

50,177

Operating lease liabilities - related parties

163,558

330,781

Financing lease liabilities

402,526

304,557

Derivative liabilities

572,021

2,215,204

Current liabilities - discontinued operations

485,736

528,426

Total current liabilities

4,765,180

6,165,811

Other liabilities

Operating lease liabilities,non-current

97,350

47,910

Operating lease liabilities,non-current - related parties

52,205

226,896

Financing lease liabilities,non-current

289,358

1,376

Deferred tax liability

42,746

46,386

Total other liabilities

481,659

322,568

Total liabilities

5,246,839

6,488,379

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

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

December31,

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 December 31,2022 and March 31,

respectively)

285,802

820,799

Stockholders' equity

Common stock (par value $0.0001 per share,10,000,000 shares authorized; 7,693,040 and

6,186,783 shares issued and outstanding at December 31,

respectively) *

782

630

Additional paid-in capital

43,339,412

42,803,033

Accumulated deficit

(36,323,523)

(34,601,545)

Accumulated other comprehensive loss

(1,327,692)

(109,454)

Total Senmiao Technology Limited stockholders' equity

5,688,979

8,092,664

Non-controlling interests

4,316,973

4,476,275

Total equity

10,005,952

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 December31,

For the Nine Months

Ended December31,

2022

2021

2022

2021

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Revenues

Revenues

$

1,710,172

$

1,660,119

$

6,597

$

3,152,592

Revenues,a related party

30,748

—

323,321

—

Total revenues

1,740,920

1,119

6,918

3,592

Cost of revenues

Cost of revenues

(1,372,916)

(1,457,589)

(5,038,614)

(5,378,411)

Cost of revenues,a related party

(185,254)

—

(333,756)

—

Total cost of revenues

(1,558,170)

(1,370)

(5,411)

Gross profit (loss)

182,750

202,530

951,548

(2,225,819)

Operating expenses

Selling,general and administrative expenses

(1,385,580)

(2,701,921)

(4,832,658)

(7,102,107)

Provision for doubtful accounts,net of recovery

(126,546)

(6,926)

(470,982)

(125,709)

Impairments of inventories

—

—

(3,085)

—

Impairments of long-lived assets and goodwill

—

(1,975)

-

(142,516)

Total operating expenses

(1,512,126)

(2,822)

(5,306,725)

(7,370,332)

Loss from operations

(1,329,376)

(2,508,292)

(4,355,177)

(9,596,151)

Other income (expense)

Other income,net

320,151

97,710

807,276

81,600

Interest expense

(6,975)

—

(6,975)

(5,872)

Interest expense on finance leases

(626)

(13,612)

(8,927)

(44,369)

Change in fair value of derivative liabilities

30,557

3,536,859

1,641,650

5,309

Issuance cost incurred for issuing series A convertible preferred stock

—

(821,892)

—

(821,892)

Total other income,net

343,107

2,799,065

2,433,024

4,394,776

Income (loss) before income taxes

(986,269)

290,773

(1,922,153)

(5,201,375)

Income tax expense

—

(4,539)

—

(4,550)

Net income (loss) from continuing operations

(986,269)

286,234

(1,205,925)

Loss from discontinued operations,net of applicable income taxes

—

(418,355)

—

(2,418,757)

Net loss

(986,269)

(132,121)

(1,153)

(7,624,682)

Net loss attributable to non-controlling interests from continuing operations

14,928

178,808

200,175

1,322,575

Net loss attributable to non-controlling interests from discontinued operations

—

108,772

—

628,877

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

$

(971,341)

$

155,459

$

(1,721,978)

$

(5,673,230)

Net loss

$

(986,269)

$

(132,121)

$

(1,153)

$

(7,682)

SENMIAOTECHNOLOGY LIMITED

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

(Expressed in U.S. dollars,

2022

2021

2022

2021

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Other comprehensive income (loss)

Foreign currency translation adjustment

328,208

70,638

(1,177,365)

48,458

Comprehensive loss

(658,061)

(61,483)

(3,099,518)

(7,576,224)

less: Total comprehensive loss attributable to noncontrolling interests

(75,611)

(303,768)

(159,302)

(1,984,990)

Total comprehensive income (loss) attributable to stockholders

$

(582,450)

$

242,285

$

(2,940,216)

$

(5,591,234)

Weighted average number of common stock

Basic and diluted*

7,689,406

5,655

7,016,860

5,579,271

Earnings (loss) per share - basic and diluted*

Continuing operations

$

(0.13)

$

0.08

$

(0.25)

$

(0.70)

Discontinued operations

—

(0.05)

—

(0.32)

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

$

(0.13)

$

0.03

$

(0.25)

$

(1.02)

*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,except for the number of shares)

For the Nine Months Ended December31,

2022

2021

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities:

Net loss

$

(1,682)

Net loss from discontinued operations

—

(2,757)

Net loss from continuing operations

(1,925)

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

activities:

Depreciation and amortization of property and equipment

873,480

704,741

Stock compensation expense

—

653,000

Issuance costs for series A convertible preferred stock

—

821,892

Amortization of right-of-use assets

579,209

635,036

Amortization of intangible assets

128,538

104,829

Provision for doubtful accounts,net of recovery

470,982

125,709

Impairments of inventories

3,085

—

Impairments of long-lived assets

—

142,516

Gain on disposal of long-lived assets

(596,564)

—

Change in fair value of derivative liabilities

(1,650)

(5,309)

Change in operating assets and liabilities

Accounts receivable

177,273

8,693

Accounts receivable,a related party

(9,876)

—

Inventories

322,689

(93,172)

Prepayments,other receivables and other assets

1,115,661

683,439

Finance lease receivables

187,695

556,021

Accounts payable

48,108

76,877

Advances from customers

10,048

(1,812)

Accrued expenses and other liabilities

639,657

(664,848)

Operating lease liabilities

(37,872)

(113,238)

Operating lease liabilities - related parties

(99,023)

(124,143)

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

249,287

(6,875,694)

Net cash provided by operating activities from discontinued operations

—

416,522

Net Cash Provided by (Used in) Operating Activities

249,459,172)

Cash Flows from Investing Activities:

Purchases of property and equipment

(1,213,996)

(3,484,051)

Cash proceed from disposal of long-lived assets

1,527,550

—

Purchases of intangible assets

(26,408)

(76,637)

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

287,146

(3,560,688)

Net cash provided by investing activities from discontinued operations

—

22,586

Net Cash Provided by (Used in) Investing Activities

287,102)

SENMIAOTECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Expressed in U.S. dollars,

2022

2021

(Unaudited)

(Unaudited)

Cash Flows from Financing Activities:

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

—

5,771,053

Net proceeds from issuance of common stock upon warrants exercised

—

22,015

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

private placement offering

—

4,369,937

Borrowings from a financial institution

—

534,112

Loan to related parties

—

(232,751)

Repayment from related parties and affiliates

359,383

15,546

Repayments of current borrowings from financial institutions

(111,615)

(529,226)

Principal payments of finance lease liabilities

(349,140)

(333,480)

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

(101,372)

9,617,206

Net cash used in financing activities from discontinued operations

—

(1,439,919)

Net Cash Provided by (Used in) Financing Activities

(101,372)

8,287

Effect of exchange rate changes on cash and cash equivalents

(82,673)

173,623

Net increase (decrease) in cash and cash equivalents

352,388

(1,646,364)

Cash and cash equivalents,beginning of the period

1,221

4,448,075

Cash and cash equivalents,end of the period

1,609

2,801,711

Less: Cash and cash equivalents from discontinued operations

—

833,060

Cash and cash equivalents from continuing operations,end of period

$

1,968,651

Supplemental Cash Flow Information

Cash paid for interest expense

$

6,975

$

44,123

Non-cash Transaction in Investing and Financing Activities

Recognition of right-of-use assets and lease liabilities

$

917,786

$

196,671

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

$

118,030

$

180,973

Termination of right-of use assets and lease liabilities

54,546

—

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

252,939

—

Cashless exercise of November 2021 Investor warrants into common stock

$

1,533

$

—

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

$

—

$

7,933,434

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

warrants exercised

$

—

$

45,674

Acquisition of XXTX'S minority interest with issuance of common stock at fair value

$

—

$

1,972,717

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