As filed with the Securities and Exchange Commission
on September 28, 2023.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SENMIAO TECHNOLOGY LIMITED
(Exact name of registrant as specified in its charter)
| Nevada |
35-2600898 |
|
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
16F, Shihao Square, Middle Jiannan Blvd.
High-Tech Zone, Chengdu
Sichuan, People’s Republic of China 610000
+86 28 61554399
(Address, including zip code, and telephone number,
including area code, of registrant’s principal
executive offices)
CSC Services of Nevada,
Inc.
2215 Renaissance Dr.
Las Vagas, NV 89119
+1(888)921-8397
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
With copies to:
Elizabeth F. Chen, Esq.
Pryor Cashman LLP
7 Times Square
New York, New York 10036
(212) 326-0199
Approximate date of commencement
of proposed sale to the public: From time to time after this registration statement becomes effective.
If the only securities being registered on this
Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, other
than securities offered only in connection with dividend or interest reinvestment plans, check the following box: x
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ¨
If this Form is a registration statement
pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is a post-effective amendment
to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer |
¨ |
Accelerated filer |
¨ |
| Non-accelerated filer |
x |
Smaller reporting company |
x |
| |
|
Emerging growth company |
¨ |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION
STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT
WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
The information in this prospectus
is not complete and may be changed. Senmiao may not sell these securities until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
| PROSPECTUS |
Subject to Completion, Dated September 28, 2023 |
SENMIAO TECHNOLOGY LIMITED
$150,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Rights
Units
By this prospectus, Senmiao Technology Limited,
a Nevada holding company (“Senmiao”, or the “Company”) may offer and sell from time to time, in one or more series
or classes, up to $150,000,000 in aggregate principal amount of Senmiao’s common stock, preferred stock, debt securities, warrants,
rights and/or units. Senmiao may also offer securities as may be issuable upon conversion, redemption, repurchase, exchange or exercise
of any securities registered hereunder, including any applicable anti-dilution provisions. This prospectus provides a general description
of the securities Senmiao may offer. Each time Senmiao offers securities, it will provide specific terms of the securities offered in
a supplement to this prospectus. The prospectus supplement may also add, update or change information contained in this prospectus. You
should carefully read this prospectus and the applicable prospectus supplement, as well as any documents incorporated by reference, before
you invest in any of the securities being offered.
Senmiao’s common stock is listed on The
Nasdaq Capital Market under the symbol “AIHS.” On September 27, 2023, the closing price for Senmiao’s common stock,
as reported on The Nasdaq Capital Market, was $0.46 per share, and the aggregate market value of Senmiao’s outstanding common stock
held by non-affiliates (Senmiao’s “public float”), was 3,160,104.32, calculated based on 6,869,792 shares of outstanding
common stock held by non-affiliates as of September 27, 2023 and the price per share of $0.46. Pursuant to General Instruction I.B.6 of
Form S-3, in no event will Senmiao sell securities registered on the registration statement of which this prospectus is a part in
a public primary offering with a value exceeding more than one-third of Senmiao’s public float in any 12-month period, so long as
Senmiao’s public float remains below $75.0 million. As of the date hereof, Senmiao has not offered any securities pursuant to General
Instruction I.B.6 of Form S-3 during the 12 calendar months prior to and including the date of this prospectus.
Senmiao may offer and sell these securities directly
to investors, through agents designated from time to time or to or through underwriters or dealers, including on a continuous or delayed
basis. For additional information on the methods of sale, you should refer to the section entitled “Plan of Distribution”
in this prospectus. If any agents or underwriters are involved in the sale of any securities with respect to which this prospectus is
being delivered, the names of such agents or underwriters and any applicable fees, commissions, discounts or over-allotment options will
be set forth in a prospectus supplement. The price to the public of such securities and the net proceeds Senmiao expects to receive from
such sale will also be set forth in a prospectus supplement.
INVESTING IN SENMIAO’S
SECURITIES INVOLVES SUBSTANTIAL RISKS. SENMIAO IS NOT A CHINESE OPERATING COMPANY, BUT A
HOLDING COMPANY INCORPORATED IN NEVADA. AS A HOLDING COMPANY WITH NO MATERIAL OPERATIONS OF ITS OWN, IT CONDUCTS A SUBSTANTIAL MAJORITY
OF ITS OPERATIONS THROUGH ITS OPERATING ENTITIES ESTABLISHED IN THE PEOPLE’S REPUBLIC OF CHINA, OR THE PRC, PRIMARILY ITS WHOLLY
OWNED SUBSIDIARIES.
ADDITIONALLY,
SENMIAO, AND ITS SUBSIDIARIES ARE SUBJECT TO CERTAIN LEGAL AND OPERATIONAL RISKS ASSOCIATED WITH THE subsidiaries’ OPERATIONS IN
CHINA. PRC LAWS AND REGULATIONS GOVERNING THE COMPANY’S CURRENT BUSINESS OPERATIONS ARE SOMETIMES VAGUE AND UNCERTAIN, AND THEREFORE,
THESE RISKS MAY RESULT IN A MATERIAL CHANGE IN subsidiaries’ OPERATIONS, SIGNIFICANT DEPRECIATION OF THE VALUE OF SENMIAO’S
COMMON STOCK, OR A COMPLETE HINDRANCE OF SENMIAO’S ABILITY TO OFFER OR CONTINUE TO OFFER ITS SECURITIES TO INVESTORS. RECENTLY,
THE PRC GOVERNMENT INITIATED A SERIES OF REGULATORY ACTIONS AND STATEMENTS TO REGULATE BUSINESS OPERATIONS IN CHINA WITH LITTLE ADVANCE
NOTICE, INCLUDING CRACKING DOWN ON ILLEGAL ACTIVITIES IN THE SECURITIES MARKET, ADOPTING NEW MEASURES TO EXTEND THE SCOPE OF CYBERSECURITY
REVIEWS, AND EXPANDING THE EFFORTS IN ANTI-MONOPOLY ENFORCEMENT. SINCE THESE STATEMENTS AND REGULATORY ACTIONS ARE NEW, IT IS HIGHLY
UNCERTAIN HOW SOON LEGISLATIVE OR ADMINISTRATIVE REGULATION MAKING BODIES WILL RESPOND AND WHAT EXISTING OR NEW LAWS OR REGULATIONS OR
DETAILED IMPLEMENTATIONS AND INTERPRETATIONS WILL BE MODIFIED OR PROMULGATED, IF ANY, AND THE POTENTIAL IMPACT OF SUCH MODIFIED OR
NEW LAWS AND REGULATIONS WILL HAVE ON THE COMPANY’S DAILY BUSINESS OPERATION, THE ABILITY TO ACCEPT FOREIGN INVESTMENTS AND LIST
ON AN U.S. OR OTHER FOREIGN EXCHANGE.
ON
FEBRUARY 17, 2023, THE CHINA SECURITIES REGULATORY COMMISSION, OR THE “CSRC”, PROMULGATED THE TRIAL ADMINISTRATIVE MEASURES
OF OVERSEAS SECURITIES OFFERING AND LISTING BY DOMESTIC COMPANIES (THE “TRIAL MEASURES”), WHICH BECAME EFFECTIVE ON MARCH
31, 2023. ON THE SAMED DATE, THE CSRC CIRCULATED SUPPORTING GUIDANCE RULES NO.1 THROUGH NO.5, NOTES ON THE TRIAL MEASURES, NOTICE ON ADMINISTRATION
ARRANGEMENTS FOR THE FILING OF OVERSEAS LISTINGS BY DEMOSTICE ENTERPRISES AND RELEVEANT CSRC ANSWERES TO REPORTOR QUESTIONS, OR COLLECTIVELY,
THE GUIDANCE RULES AND NOTICE, ON CSRC’S OFFICIAL WEBSITE. THE TRIAL MEAURES, TOGETHER WITH THE GUIDANCE RULES AND NOTICE REITERARE
THE BASIC PRINCIPLES OF DRAFT ADMINSTRATIVE PROVISIONS AND DRAFT FILING MEASURES AND IMPAOSE SUBSTANTILLY THE SAME REQUIREMENTS FOR THE
OVERSEAS SECURITIES OFFERING AND LISTING BY DEMESTIC ENTERPRISES, AND CLARIFIED AND EMPHASIZED SERVAL ASPECTS. BECAUSE WE ARE ALREADY
PUBLICLY LISTED IN THE U.S., THE TRIAL MEASURES AND THE GUIDANCE RULES AND NOTICE DO NOT IMPOSE OBVIOUS ADDITIONAL REGULATORY BURDEN ON
US BEYOND THE OBLIGATION TO REPORT TO THE CSRC AND COMPLY WITH THE FILING REQUIREMENTS ON ANY FUTURE OFFERINGS OF OUR SECURITIES, OR MATERIAL
EVENTS SUCH AS A CHANGE OF CONTROL OR DELISTING. AS THE TRIAL MEASURES AND THE GUIDANCE RULES AND NOTICE ARE NEWLY ISSUED, THERE REMAINS
UNCERTAINTY AS TO HOW IT WILL BE INTERPRETED OR IMPLEMENTED. THEREFORE, WE ARE SUBJECT TO SUCH FILING REQUIREMENTS UNDER THE TRIAL MEASURES
UPON FUTURE SUBSEQUENT OFFERING, AND MAY BE SUBJECT TO ADDITIONAL FILING REQUIREMENTS IF THERE ARE ANY CHANGES ON THE TRIAL MEASURES,
UPON THAT TIME, WE MAY NOT BE ABLE TO GET CLEARANCE FROM THE CSRC IN A TIMELY FASHION.
ON MAY 20, 2020, THE U.S.
SENATE PASSED THE HOLDING FOREIGN COMPANIES ACCOUNTABLE ACT REQUIRING A FOREIGN COMPANY TO CERTIFY IT IS NOT OWNED OR CONTROLLED BY A
FOREIGN GOVERNMENT IF THE PCAOB IS UNABLE TO AUDIT SPECIFIED REPORTS BECAUSE THE COMPANY USES A FOREIGN AUDITOR NOT SUBJECT TO PCAOB INSPECTION.
IF THE PCAOB IS UNABLE TO INSPECT THE COMPANY’S AUDITORS FOR THREE CONSECUTIVE YEARS, THE ISSUER’S SECURITIES ARE PROHIBITED
TO TRADE ON A U.S. STOCK EXCHANGE. ON DECEMBER 2, 2020, THE U.S. HOUSE OF REPRESENTATIVES APPROVED THE HOLDING FOREIGN COMPANIES ACCOUNTABLE
ACT. ON DECEMBER 18, 2020, THE HOLDING FOREIGN COMPANIES ACCOUNTABLE ACT WAS SIGNED INTO LAW. PURSUANT TO THE HOLDING FOREIGN COMPANIES
ACCOUNTABLE ACT, THE PCAOB ISSUED A DETERMINATION REPORT ON DECEMBER 16, 2021 WHICH FOUND THAT THE PCAOB IS UNABLE TO INSPECT OR INVESTIGATE
COMPLETELY REGISTERED PUBLIC ACCOUNTING FIRMS HEADQUARTERED IN: (1) MAINLAND CHINA OF THE PRC BECAUSE OF A POSITION TAKEN BY ONE OR MORE
AUTHORITIES IN MAINLAND CHINA; AND (2) HONG KONG, A SPECIAL ADMINISTRATIVE REGION AND DEPENDENCY OF THE PRC, BECAUSE OF A POSITION TAKEN
BY ONE OR MORE AUTHORITIES IN HONG KONG. ON AUGUST 26, 2022, THE PCAOB ANNOUNCED AND SIGNED A STATEMENT OF PROTOCOL (THE “PROTOCOL”)
WITH THE CHINA SECURITIES REGULATORY COMMISSION AND THE MINISTRY OF FINANCE OF THE PEOPLE’S REPUBLIC OF CHINA. THE PROTOCOL PROVIDES
THE PCAOB WITH: (1) SOLE DISCRETION TO SELECT THE FIRMS, AUDIT ENGAGEMENTS AND POTENTIAL VIOLATIONS IT INSPECTS AND INVESTIGATES, WITHOUT
ANY INVOLVEMENT OF CHINESE AUTHORITIES; (2) PROCEDURES FOR PCAOB INSPECTORS AND INVESTIGATORS TO VIEW COMPLETE AUDIT WORK PAPERS WITH
ALL INFORMATION INCLUDED AND FOR THE PCAOB TO RETAIN INFORMATION AS NEEDED; (3) DIRECT ACCESS TO INTERVIEW AND TAKE TESTIMONY FROM ALL
PERSONNEL ASSOCIATED WITH THE AUDITS THE PCAOB INSPECTS OR INVESTIGATES. OUR AUDITOR IS HEADQUARTERED IN SINGAPORE, SINGAPORE AND WILL
BE INSPECTED BY THE PCAOB ON A REGULAR BASIS. OUR AUDITOR IS NOT SUBJECT TO THE DETERMINATION. OUR AUDITOR IS SUBJECT TO LAWS IN THE UNITED
STATES PURSUANT TO WHICH THE PCAOB CONDUCTS REGULAR INSPECTIONS TO ASSESS OUR AUDITOR’S COMPLIANCE WITH THE APPLICABLE PROFESSIONAL
STANDARDS. ON JUNE 22, 2021, THE U.S. SENATE PASSED THE ACCELERATING HOLDING FOREIGN COMPANIES ACCOUNTABLE ACT (“AHFCAA”)
WHICH, PROPOSED TO REDUCE THE NUMBER OF CONSECUTIVE NON-INSPECTION YEARS REQUIRED FOR TRIGGERING THE PROHIBITIONS UNDER THE
HFCAA FROM THREE YEARS TO TWO. ON DECEMBER 29, 2022, THE CONSOLIDATED APPROPRIATIONS ACT, 2023 (THE “CAA”) WAS SIGNED INTO
LAW, WHICH OFFICIALLY REDUCED THE NUMBER OF CONSECUTIVE NON-INSPECTION YEARS REQUIRED FOR TRIGGERING THE PROHIBITIONS UNDER THE HFCAA
FROM THREE YEARS TO TWO, THUS, REDUCE THE TIME BEFORE AN APPLICABLE ISSUER’S SECURITIES MAY BE PROHIBITED FROM TRADING OR DELISTED.
CURRENTLY, OUR AUDITOR IS SUBJECT TO INSPECTION BY PCAOB. HOWEVER, IF AHFCAA WERE ENACTED INTO LAW, IT MAY POSE MORE RISKS OF POTENTIAL
DELISTING AS WELL AS DEPRESS THE PRICE OF COMPANY’S ORDINARY SHARES. ON DECEMBER 15, 2022, THE PCAOB ISSUED A NEW DETERMINATION
REPORT WHICH CONCLUDED THAT IT WAS ABLE TO INSPECT AND INVESTIGATE COMPLETELY PCAOB-REGISTERED ACCOUNTING FIRMS HEADQUARTERED IN MAINLAND
CHINA AND HONG KONG IN 2022, AND THE PCAOB VACATED THE DECEMBER 16, 2021 DETERMINATION REPORT. SHOULD THE PCAOB AGAIN ENCOUNTER IMPEDIMENTS
TO INSPECTIONS AND INVESTIGATIONS IN MAINLAND CHINA OR HONG KONG AS A RESULT OF POSITIONS TAKEN BY ANY AUTHORITY IN EITHER JURISDICTION,
INCLUDING BY THE CSRC OR THE MOF, THE PCAOB WILL MAKE DETERMINATIONS UNDER THE HFCAA AS AND WHEN APPROPRIATE. HOWEVER, WHETHER THE PCAOB
WILL CONTINUE TO CONDUCT INSPECTIONS AND INVESTIGATIONS COMPLETELY TO ITS SATISFACTION OF PCAOB-REGISTERED PUBLIC ACCOUNTING FIRMS HEADQUARTERED
IN MAINLAND CHINA AND HONG KONG IS SUBJECT TO UNCERTAINTY AND DEPENDS ON A NUMBER OF FACTORS OUT OF ABLE VIEW’S, AND ABLE VIEW’S
AUDITOR’S, CONTROL, INCLUDING POSITIONS TAKEN BY AUTHORITIES OF THE PRC. THE PCAOB IS EXPECTED TO CONTINUE TO DEMAND COMPLETE ACCESS
TO INSPECTIONS AND INVESTIGATIONS AGAINST ACCOUNTING FIRMS HEADQUARTERED IN MAINLAND CHINA AND HONG KONG IN THE FUTURE AND STATES THAT
IT HAS ALREADY MADE PLANS TO RESUME REGULAR INSPECTIONS IN EARLY 2023 AND BEYOND. THE PCAOB IS REQUIRED UNDER THE HFCAA TO MAKE ITS DETERMINATION
ON AN ANNUAL BASIS WITH REGARDS TO ITS ABILITY TO INSPECT AND INVESTIGATE COMPLETELY ACCOUNTING FIRMS BASED IN THE MAINLAND CHINA AND
HONG KONG. SHOULD THE PCAOB AGAIN ENCOUNTER IMPEDIMENTS TO INSPECTIONS AND INVESTIGATIONS IN MAINLAND CHINA OR HONG KONG AS A RESULT OF
POSITIONS TAKEN BY ANY FOREIGN AUTHORITY INCLUDING BUT IS NOT LIMITED TO MAINLAND CHINA OR HONG KONG JURISDICTION, THE PCAOB WILL ACT
EXPEDITIOUSLY TO CONSIDER WHETHER IT SHOULD ISSUE A NEW DETERMINATION.
THE
CHINESE REGULATORY AUTHORITIES COULD DISALLOW THE COMPANY’S STRUCTURE, WHICH COULD RESULT IN A MATERIAL CHANGE IN THE COMPANY’S
OPERATIONS AND THE VALUE OF SENMIAO’S SECURITIES COULD DECLINE OR BECOME WORTHLESS. FOR A DESCRIPTION OF THE COMPANY’S CORPORATE
STRUCTURE, SEE “CORPORATE STRUCTURE” ON PAGEs 13 and 14. SEE ALSO “RISK FACTORS - RISKS RELATED TO OUR CORPORATE STRUCTURE”
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
SEE
THE SECTION TITLED “RISK FACTORS” BEGINNING ON PAGE 25 OF THIS PROSPECTUS TO READ ABOUT FACTORS YOU
SHOULD CONSIDER BEFORE BUYING SHARES OF SENMIAO’S COMMON STOCK.
NONE OF SENIMAO’S
SUBSIDIARIES OR ITS FORMER VIES HAS ISSUED ANY DIVIDENDS OR DISTRIBUTIONS TO RESPECTIVE HOLDING COMPANIES, OR TO ANY INVESTORS AS OF THE
DATE OF THIS PROSPECTUS. SENMIAO’S SUBSIDIARIES IN THE PRC GENERATE AND RETAIN CASH GENERATED FROM OPERATING ACTIVITIES AND RE-INVEST
IT IN THE COMPANY’S BUSINESS. IN THE FUTURE, CASH PROCEEDS RAISED FROM OVERSEAS FINANCING ACTIVITIES, INCLUDING THE CASH PROCEEDS
FROM THE CONVERSION OF THE SERIES A CONVERTIBLE PREFERRED STOCK AND THE EXERCISE OF THE WARRANTS BY THE WARRANT HOLDERS, MAY BE TRANSFERRED
BY SENMIAO TO SENMIAO’S PRC SUBSIDIARIES VIA CAPITAL CONTRIBUTION AND SHAREHOLDER LOANS, AS THE CASE MAY BE.
THE MAJORITY OF SENMIAO’S
AND THE FORMER VIES’ INCOME IS RECEIVED IN RMB AND RESTRICTIONS IN FOREIGN CURRENCIES MAY LIMIT THE COMPANY’S ABILITY
TO PAY DIVIDENDS OR OTHER PAYMENTS, OR OTHERWISE SATISFY THE COMPANY’S FOREIGN CURRENCY DENOMINATED OBLIGATIONS, IF ANY. UNDER
EXISTING PRC FOREIGN EXCHANGE REGULATIONS, PAYMENTS OF CURRENT ACCOUNT ITEMS, INCLUDING PROFIT DISTRIBUTIONS, INTEREST PAYMENTS
AND EXPENDITURES FROM TRADE-RELATED TRANSACTIONS, CAN BE MADE IN FOREIGN CURRENCIES WITHOUT PRIOR APPROVAL FROM THE STATE ADMINISTRATION
OF THE FOREIGN EXCHANGE (“SAFE”) IN THE PRC AS LONG AS CERTAIN PROCEDURAL REQUIREMENTS ARE MET. APPROVAL FROM APPROPRIATE
GOVERNMENT AUTHORITIES IS REQUIRED IF RENMINBI IS CONVERTED INTO FOREIGN CURRENCY AND REMITTED OUT OF CHINA TO PAY CAPITAL EXPENSES SUCH
AS THE REPAYMENT OF LOANS DENOMINATED IN FOREIGN CURRENCIES. THE PRC GOVERNMENT MAY, AT ITS DISCRETION, IMPOSE RESTRICTIONS ON ACCESS
TO FOREIGN CURRENCIES FOR CURRENT ACCOUNT TRANSACTIONS AND IF THIS OCCURS IN THE FUTURE, SENMIAO MAY NOT BE ABLE TO PAY DIVIDENDS
IN FOREIGN CURRENCIES TO ITS SHAREHOLDERS. SEE THE SECTION TITLED “CASH TRANSFER AND DIVIDEND PAYMENT” BEGINNING ON PAGE
16 OF THIS PROSPECTUS FOR DETAILS.
NEITHER THE SECURITIES
AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is September 28,
2023.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
that Senmiao filed with the U.S. Securities and Exchange Commission (the “SEC”) using a “shelf” registration process.
Under this shelf registration process, Senmiao may from time to time sell any combination of the securities described in this prospectus
in one or more offerings for an aggregate offering price of up to $150,000,000.
This prospectus provides you with a general description
of the securities Senmiao may offer. Each time Senmiao sells securities, it will provide one or more prospectus supplements that will
contain specific information about the terms of the offering. The prospectus supplement may also add, update or change information contained
in this prospectus. You should read both this prospectus and the accompanying prospectus supplement together with the additional information
described under the heading “Where You Can Find More Information” in this prospectus.
You should rely only on the information contained
in or incorporated by reference in this prospectus, any accompanying prospectus supplement or in any related free writing prospectus filed
by Senmiao with the SEC. Senmiao has not authorized anyone to provide you with different information. This prospectus and the accompanying
prospectus supplement do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities
described in the accompanying prospectus supplement or an offer to sell or the solicitation of an offer to buy such securities in any
circumstances in which such offer or solicitation is unlawful. Persons who come into possession of this prospectus in jurisdictions outside
the United States are required to inform themselves about, and to observe, any restrictions as to the offering and the distribution of
this prospectus applicable to those jurisdictions. You should assume that the information appearing in this prospectus, any prospectus
supplement, the documents incorporated by reference and any related free writing prospectus is accurate only as of their respective dates.
Our business, financial condition, results of operations and prospects may have changed since such date. Other than as required under
the federal securities laws, Senmiao undertakes no obligation to publicly update or revise such information, whether as a result of new
information, future events or any other reason.
Any trade names, trademarks and service marks
of others that are contained in this prospectus are the property of their respective owners. Solely for convenience, trademarks and trade
names referred to in this prospectus may appear without ®, TM or similar symbols.
Some of the industry data contained in this prospectus
is derived from data from various third-party sources. Senmiao has not independently verified any of this information and cannot assure
you of its accuracy or completeness. Such data is subject to change based on various factors, including those discussed under the “Risk
Factors” section beginning on page 25 of this prospectus.
Unless otherwise stated in
this prospectus, references to:
| |
· |
“China” or the “PRC” refers to the People's Republic of China, excluding, for the purposes of this prospectus only, Hong Kong, Macau and Taiwan; |
| |
· |
“Company” refers to collectively Senmiao Technology Limited, our public holding company incorporated in the State of Nevada and its wholly-owned subsidiaries; |
| |
· |
“Corenel” refers to Chengdu Corenel Technology Limited, a PRC limited liability company and wholly owned subsidiary of Senmiao Consulting; |
| |
· |
“Didi” refers to Beijing Xiaoju Science and Technology Co., Ltd. and its affiliates, the world’s largest mobility technology platform, who operates the largest ride-hailing platform in China; |
| |
· |
“Hunan Ruixi” refers to Hunan Ruixi Financial Leasing Co., Ltd., a PRC limited liability company and our majority owned subsidiary in China; |
| |
· |
“Jiekai” refers to Chengdu Jiekai Technology Ltd., a PRC limited liability company in China and a majority owned subsidiary of Corenel; |
| |
· |
“Jinkailong” refers to Sichuan Jinkailong Automobile Leasing Co., Ltd., our former variable interest entity, a PRC limited liability company with 35% equity interest held by Hunan Ruixi; |
| |
· |
“Operating Entities” refers to Corenel, Hunan Ruixi, Jiekai, Senmiao Consulting, XXTX and Yicheng; |
| |
· |
“Restructuring” refers to the establishment of a wholly foreign owned entity and the execution of a series of agreements among the Company, Senmiao Consulting, Sichuan Senmiao and the equity holders of Sichuan Senmiao, pursuant to which we have gained control of and became the primary beneficiary to Sichuan Senmiao; |
| |
· |
“RMB” and “Renminbi” refer to the legal currency of China; |
| |
· |
“Senmiao” refers to Senmiao Technology Limited; |
| |
· |
“Senmiao Consulting” refers to Sichuan Senmiao Zecheng Business Consulting Co., Ltd., our wholly owned subsidiary in China; |
| |
· |
“Sichuan Senmiao,” refer to Sichuan Senmiao Ronglian Technology Co., Ltd., a PRC limited liability company, the majority owned subsidiary of Senmiao Consulting and our former variable interest entity in China; |
| |
· |
“we,” “us,” “our company” and “our” refer to Senmiao Technology Limited and its subsidiaries; |
| |
· |
“US$,” “U.S. dollars,” “$,” and “dollars” refer to the legal currency of the United States; |
| |
· |
“XXTX” refers to Hunan Xixingtianxia Technology Co., Ltd. and its subsidiaries, a PRC limited liability company and wholly owned subsidiary of Senmiao Consulting; |
| |
· |
“Yicheng” refers to Yicheng Financial Leasing Co., Ltd., a PRC limited liability company and our wholly owned subsidiary in China; and |
| |
· |
“Youlu” refers to Chengdu Youlu Technology Ltd. (“Youlu”), our former variable interest entity in China |
We use U.S. dollars as reporting
currency in our financial statements and in this prospectus. Monetary assets and liabilities denominated in Renminbi are translated into
U.S. dollars at the rates of exchange as of the balance sheet date, equity accounts are translated at historical exchange rates, and revenues,
expenses, gains and losses are translated using the average rate for the period. In other parts of this prospectus, any Renminbi denominated
amounts are accompanied by translations. We make no representation that the Renminbi or U.S. dollar amounts referred to in this prospectus
could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. The PRC government
restricts or prohibits the conversion of Renminbi into foreign currency and foreign currency into Renminbi for certain types of transactions.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus, including the documents that
Senmiao incorporates by reference, contains forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended ( the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Any statements about Senmiao’s expectations, beliefs, plans, objectives, assumptions or future events or performance
are not historical facts and may be forward-looking. These statements are often, but are not always, made through the use of words or
phrases such as “may,” “will,” “could,” “should,” “expects,” “intends,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,”
“potential,” “continue,” and similar expressions, or the negative of these terms, or similar expressions. Accordingly,
these statements involve estimates, assumptions, risks and uncertainties which could cause actual results to differ materially from those
expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this
prospectus, and in particular those factors referenced in the section “Risk Factors.”
This prospectus contains forward-looking statements
that are based on our management’s belief and assumptions and on information currently available to our management. These statements
relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that
may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels
of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include,
but are not limited to, statements about:
| · | our goals and strategies, including our ability to expand our automobile transaction and related services
business and our online ride-hailing platform services business in China; |
| · | our management’s ability to properly develop and achieve any future business growth and any improvements
in our financial condition and results of operations; |
| · | the regulations and the impact by public health epidemics in China on the industries we operate in and
our business, results of operations and financial condition; |
| · | the growth or lack of growth in China of disposable household income and the availability and cost of
credit available to finance car purchases; |
| · | the growth or lack of growth of China’s online ride-hailing, automobile financing and leasing industries; |
| · | taxes and other incentives or disincentives related to car purchases and ownership; |
| · | fluctuations in the sales and price of new and used cars and consumer acceptance of financing car purchases; |
| · | changes in online ride-hailing, transportation networks, and other fundamental changes in transportation
pattern in China; |
| · | our expectations regarding demand for and market acceptance of our products and services; |
| · | our expectations regarding our customer base; |
| · | our plans to invest in our automobile transaction and related services business and our online ride-hailing
platform services business; |
| · | our ability to maintain positive relationships with our business partners; |
| · | competition in the online ride-hailing, automobile financing and leasing industries in China; |
| · | macro-economic and political conditions affecting the global economy generally and the market in China
specifically; and |
| · | relevant Chinese government policies and regulations relating to the industries in which we operate. |
These forward-looking statements are neither promises
nor guarantees of future performance due to a variety of risks and uncertainties and other factors more fully discussed in the “Risk
Factors” section in this prospectus, the section of any accompanying prospectus supplement entitled “Risk Factors” and
the risk factors and cautionary statements described in other documents that Senmiao files from time to time with the SEC. Given these
uncertainties, readers should not place undue reliance on Senmiao’s forward-looking statements. These forward-looking statements
speak only as of the date on which the statements were made and are not guarantees of future performance. Except as may be required by
applicable law, Senmiao does not undertake to update any forward-looking statements after the date of this prospectus or the respective
dates of documents incorporated by reference herein or therein that include forward-looking statements.
Except as required by law, Senmiao assumes no
obligation to update these forward-looking statements publicly, or to revise any forward-looking statements to reflect events or developments
occurring after the date of this prospectus, even if new information becomes available in the future.
PROSPECTUS SUMMARY
Overview
Senmiao is not
a Chinese operating company but a U.S. holding company incorporated in the State of Nevada on June 8, 2017. As a holding company with
no material operations of its own, Senmiao conducts a substantial majority of its operations through its Operating Entities established
in the PRC, including its subsidiaries and former VIEs. Senmiao received the economic benefits of its former VIEs’ business operations
through certain contractual arrangements. The VIE structure was used to allow non-Chinese companies to consolidate the financial statements
of the China-based companies where Chinese law prohibits or restricts direct foreign investment in the operating companies, and that investors
may never directly hold equity interests in the Chinese Operating Entities. However, Senmiao has terminated all its VIE Agreements
and has no VIEs in its consolidation scope for its financial statements since March 31, 2022.
Since November 2018, Senmiao have been providing
automobile transaction and related services focusing on the online ride-hailing industry in the PRC through its wholly owned subsidiaries,
Yicheng, Corenel and Jiekai, and our majority owned subsidiaries, Hunan Ruixi, and its equity investee company and former VIE, Jinkailong.
Since October 2020, Senmiao also operates an online ride-hailing platform through XXTX, which is a wholly owned subsidiary
of Senmiao Consulting. XXTX’s platform enables qualified ride-hailing drivers to provide transportation services mainly in Chengdu,
Changsha, Guangzhou and other 23 cities in China. Our business includes Automobile Transaction and Related Services (as defined hereinbelow)
and Online Ride-hailing Platform Services, which constituted a series of services as follows:
Automobile Transactions and Related Services
The automobile transaction and related services
(the “Automobile Transaction and Related Services”) are mainly comprised of (i) automobile operating lease where our
Operating Entities provide car rental services to individual customers to meet their personal needs with lease term no more than twelve months
(the “Auto Operating Leasing”); (ii) service fees from new energy vehicles (“NEVs”)
leasing, automobile purchase and management services where we charge NEVs lessees or automobile purchasers for a series of the services
provided to them throughout the leasing or purchase process based on the chosen product solutions, such as ride-hailing driver training,
assisting with a series of administrative procedures and other consulting services (the “Purchase and NEVs Services”);
(iii) automobile sales where we sell new purchased or used cars to our customers (the “Auto
Sales”); (iv) automobile financing where we provide our customers with auto finance solutions through financing leases (the
“Auto Financing”); (v) auto management and guarantee services provided to online ride-hailing drivers after the delivery
of automobiles (the “Auto Management and Guarantee Services”); and (vi) other supporting services provided to online
ride-hailing drivers. Our Operating Entities started the Purchase and NEVs Services, Auto Management and Guarantee Services,
and other supporting services in November 2018, the Auto Sales in January 2019, and Auto Operating Leasing and Auto Financing in March
2019, respectively.
The following chart illustrates the constitution
of our automobile transactions and related services:
Auto Operating Leasing
We, through our subsidiaries, Hunan Ruixi, Corenel,
Jiekai, and former VIE, Jinkailong (the “Auto Business Entities”) in China, have generated revenue since March 2019 from
operating lease services, where the Auto Business Entities lease their own automobiles or sublease automobiles leased from third-parties
or rendered from certain online ride-hailing drivers they served before with their authorization, to other individuals, including new
online ride-hailing drivers for a lease term of no more than twelve months. Due to the intense competition and the COVID-19 pandemic,
as of March 31, 2023 and 2022, approximately 1,335 and 1,327 online ride-hailing drivers (primarily in Chengdu City) have exited
the online ride-hailing business and rendered their automobiles to Hunan Ruixi and Jinkailong, respectively.
We have shifted our business focus to automobile leasing in accordance with the change of market condition and industry development. Hunan
Ruixi is and Jinkailong was authorized to sublease or sell these drivers’ automobiles in order to offset the repayments those drivers
owed to us and the financial institutions. We also purchase and lease NEVs for subleasing with rental periods of twelve months or less.
Excluding Jinkailong,
other Auto Business Entities leased over 1,800 automobiles with an average monthly rental income of $478 per automobile resulting in a
rental income of $3,453,392, including rental income of $344,120 from Jinkailong, for the year ended March 31, 2023. We leased over 1,000
automobiles with an average monthly rental income of approximately $491 per automobile, resulting in a rental income of $1,056,394, including
rental income of $13,748 from Jinkailong, for the three months ended June 30, 2023.
Purchase and NEVs Services
Our Auto Business Entities
charge lease service fees to lessees who rent NEVs from us, in accordance with the increasing demand for NEVs in the online ride-hailing
industry in Chengdu and Changsha. We also charge automobile purchasers services fees for a series of the services provided to them throughout
the purchase process such as credit assessment, installment of GPS devices, ride-hailing driver qualification and other administrative
procedures. The amount of services fees for NEVs leasing and purchase is based on the product solutions. Excluding Jinkailong, our other
Auto Business Entities had revenue of services of $350,510 from NEVs leasing and $33,585 from automobile purchase for the year ended March
31, 2023, respectively. We had revenues of $20,271 from NEVs leasing and $12,232 from automobile purchase for the three months ended June
30, 2023, respectively.
Auto Management and Guarantee Services
The management and guarantee
services of Hunan Ruixi are provided to online ride-hailing drivers after the delivery of automobiles, covering (i) management services
including, without limitation, ride-hailing driver training, assisting with purchase of insurances, insurance claims and after-sale automobile
services, handling traffic violations and other consulting services; and (ii) guarantee services for the obligations of online ride-hailing
drivers under their financing arrangement with financial institutions. The management and guarantee fees of Hunan Ruixi are and the management
and guarantee fees of Jinkailong were based on the costs of our services and the results of our credit assessment of the automobile purchasers.
Excluding Jinkailong, our other Auto Business Entities had revenue of $40,158 and $6,592 for the year ended March 31, 2023 and the three
months ended June 30, 2023, respectively.
As of June 30,
2023 and March 31, 2023, the maximum contingent liabilities Hunan Ruixi would be exposed to, was zero and approximately $10,000, respectively,
assuming all the automobile purchasers were in default, which may cause an increase in guarantee expense and cash outflow in financing
activities. Besides, as of June 30, 2023, the maximum contingent liabilities our former VIE, Jinkailong, would be exposed to was approximately
$3.2 million, assuming all the automobile purchasers were in default, which may cause an increase in guarantee expense and cash outflow
in its own financing activities.
Auto Sales
Our Auto Business Entities
are also engaged in the sales of automobiles through Hunan Ruixi and our former VIE, Jinkailong. Excluding Jinkailong, our other Auto
Business Entities sold one new and 42 used automobiles, resulting in income of $243,065 during the year ended March 31, 2023. They sold
one used-automobile with income of $5,044 during the three months ended June 30, 2023.
Auto Financing
Hunan Ruixi began offering
auto financing services in March 2019. In a self-operated financing transaction, Hunan Ruixi is a lessor and a customer (i.e., online
ride-hailing driver) is a lessee. Hunan Ruixi offers to the customer a selection of automobiles that were purchased by Hunan Ruixi in
advance. The customer will choose the desirable automobile to be purchased and enter into a financing lease with Hunan Ruixi. During the
term of the financing lease, the customer will have use rights with respect to the automobile. Hunan Ruixi will obtain title to the automobile
upfront and retain such title during the term of the financing lease, as lessor. At the end of the lease term, the customer will pay a
minimal price and obtain full title of the automobile after the financing lease is repaid in full. In connection with the financing lease,
the customer will enter into a service agreement with Hunan Ruixi. Hunan Ruixi recognized a total interest income of $41,738 and $13,600
for the year ended March 31, 2023 and the three months ended June 30, 2023, respectively.
Since November 22, 2018,
the acquisition date of Hunan Ruixi, and as of June 30, 2023, the Auto Business Entities have facilitated financing for an aggregate of
1,687 automobiles with a total value of approximately $23.9 million, sold an aggregate of 1,467 automobiles
with a total value of approximately $14.1 million and delivered approximately 2,996 automobiles under operating leases (including 1,826
automobiles used to be delivered by Jinkailong before March 31, 2022) and 148 automobiles under financing leases to customers, the vast
majority of whom are online ride-hailing drivers.
Ride-Hailing Platform Services
As part of our goal
to provide an all solution for online ride-hailing drivers as well as to increase our competitive strengths in an increasingly competitive
online ride-hailing industry and to take advantage of the market potential, in October 2020, we, through XXTX, began operating an
online ride-hailing platform in Chengdu. The platform (called Xixingtianxia) was
owned and operated by XXTX, of which Senmiao Consulting acquired the 100% equity interest pursuant to a series of investment and supplementary
agreements. As of the date of this prospectus, Senmiao Consulting has made accumulated capital contribution of RMB40.01 million (approximately
$5.52 million) to XXTX and the remaining amount is expected to be paid before December 31, 2025.
Our ride
hailing platform enables qualified ride-hailing drivers to provide application-based transportation services in China. XXTX holds a national
online reservation taxi operating license. The platform is presently servicing ride-hailing drivers in 26 cities in China, including Chengdu,
Changsha, Guangzhou and so on, providing them with a platform to view and take customer orders for rides. XXTX
currently collaborates with Gaode Map a well-known aggregation platform in China on our ride-hailing platform services. Under the collaboration,
when a rider using the platform searches for taxi/ride-hailing services on the aggregation platform, the platform provides such rider
a number of online ride-hailing platforms for selection, including ours and if XXTX’s platform is selected by the rider, the order
will then be distributed to registered drivers on our platform for viewing and acceptance. The rider may also simultaneously select multiple
online ride-hailing platforms in which case, the aggregation platform will distribute the requests to different online ride-hailing platforms
which they cooperate with, based on the number of available drivers using the platform in a certain area and these drivers’ historical
performance, among other things. XXTX generates revenue from providing services to online ride-hailing drivers to assist them in providing
transportation services to the riders looking for taxi/ride-hailing services. XXTX earns commissions for each completed order as the difference
between an upfront quoted fare and the amount earned by a driver based on actual time and distance for the ride charged to the rider.
XXTX settles its commissions with the aggregation platforms on a weekly basis.
Meanwhile, in order to strengthen
the market position in certain cities, the collaboration model with Meituan of our Operating Entities has been changed from the one the
same as Gaode, to the one focusing on automobile operating lease and drivers’ management services since August 2021. During
the three months ended June 30, 2023, our subsidiary, Jiekai, and equity investee company and former VIE, Jinkailong, cooperated with
other online ride-hailing platforms (“Partner Platforms”), such as Chengdu Anma Zhixing Technology Co., Ltd. and Sichuan Peitu
Kuaixing Technology Co., Ltd., whereby the online ride-hailing requests and orders shall be completed on Partner Platforms utilizing the
network of cars and drivers of us and Jinkailong. Jiekai and Jinkailong earned rental income from drivers and earned commissions from
Partner Platforms.
Transaction Process
The following chart illustrates our typical process
of XXTX’s ride-hailing platform services:
During the year ended March 31,
2023, approximately 6.1 million rides with gross fare of approximately $19.9 million were completed through Xixingtianxia and an average
of over 5,100 Active Drivers each month. During the year ended March 31, 2023, we earned online ride-hailing platform service fees of
approximately $3.7 million, after netting off approximately $0.5 million incentives paid to Active Drivers.
During the
three months ended June 30, 2023, approximately 1.7 million rides with gross fare of approximately $5.3 million were completed through
Xixingtianxia and an average of approximately 6,200 ride-hailing drivers completed rides and earned income through Xixingtianxia (the
“Active Drivers”) each month. During the three months ended June 30, 2023, we earned online ride-hailing platform service
fees of approximately $0.9 million, after netting off approximately $0.1 million incentives paid to Active Drivers.
We plan to expand our driver base
for the platform and automobile rental business while strengthening the royalty of the drivers who both lease our cars and use our platform
while expanding, but our platform is available to others. We plan to launch Xixingtianxia in more cities across China the next 12 months.
The executive offices are located in Chengdu City,
Sichuan Province, China. Substantially all of the operations are conducted in China.
Corporate History
Senmiao Technology Limited was incorporated in
the State of Nevada on June 8, 2017. It established a wholly owned subsidiary, Senmiao Consulting in China in July 2017. Sichuan
Senmiao, our former VIE, was established in China in June 2014. Senmiao Consulting provided services to Sichuan Senmiao, pursuant
to a series of contractual arrangements (the “VIE Agreements”) with Sichuan Senmiao and each of its equity holders. Senmiao
Consulting became the primary beneficiary of Sichuan Senmiao. The contractual arrangements had been in place since the establishment of
Senmiao Consulting (the “Restructuring”). On March 23, 2022, shareholders with 94.5% equity interests of Sichuan Senmiao
and Senmiao Consulting terminated the VIE Agreements. On March 28, 2022, these shareholders further sold a total of 94.5% equity
interests of Sichuan Senmiao to Senmiao Consulting with a total consideration of zero. Sichuan Senmiao became the majority owned subsidiary
of Senmiao Consulting accordingly.
On September 25, 2016, Sichuan Senmiao acquired
a P2P platform (including website, internet content provider (“ICP”) registration, operating systems, servers, management
system, employees and users) from Sichuan Chenghexin Investment and Asset Management Co., Ltd. (“Chenghexin”), which
had established and operated the platform for two years prior to our acquisition (the “Acquisition”), for a total cash consideration
of RMB69,690,000 (approximately $10.1 million). Prior to the Acquisition, Sichuan Senmiao was a holding company that owned a 60% equity
interest in an equity investment fund management company. Sichuan Senmiao sold its 60% equity interest for a cash consideration of RMB60
million (approximately $8.9 million) immediately following the Acquisition, in order to focus on the online marketplace lending business.
We ceased the online lending services business in October 2019.
On November 21, 2018, Senmiao Technology
Limited entered into an Investment and Equity Transfer Agreement (the “Investment Agreement”) with Hunan Ruixi and all the
shareholders of Hunan Ruixi, pursuant to which we acquired an aggregate of 60% of the equity interest of Hunan Ruixi for no consideration.
Senmiao Technology Limited closed the acquisition on November 22, 2018 and agreed to make a cash contribution of $6,000,000 to Hunan
Ruixi, representing 60% of its registered capital, in accordance with the Investment Agreement. Senmiao Technology Limited has made the
full cash contributions (in the aggregate amount of $6,000,000) to Hunan Ruixi. Hunan Ruixi holds a business license for automobile sales
and financial leasing and has been engaged in automobile financial leasing services and automobile sales since March 2019 and January 2019,
respectively.
Hunan Ruixi has a wholly owned subsidiary, Ruixi
Leasing, a PRC limited liability company formed in April 2018 with a registered capital of RMB10 million (approximately $1.5 million).
Ruixi Leasing had no operations and was dissolved in June 2022.
Hunan Ruixi also owns 35% equity interest in Jinkailong
and used to receive economic benefits of the remaining 65% equity interest through two voting agreements with four shareholders of Jinkailong.
On March 31, 2022, the voting agreements were terminated by the four shareholders of Jinkailong and Hunan Ruixi. As a result, Jinkailong
ceased being a VIE. Jinkailong is an automobile transaction and related services company in Chengdu City, Sichuan Province, China, which
primarily targets drivers in the ride-hailing service sector, focus on automobile operating lease, and facilitates sales and financing
transactions for its clients and provides relevant after-transaction services to them. Although Jinkailong was ceased from our consolidation
scope since March 31, 2022, Huana Ruixi, Corenel and Jiekai continuously provide automobile transaction and related services similar to
Jinkailong in Changsha and Chengdu.
In May 2019, Senmiao formed Yicheng Financial
Leasing Co., Ltd. (“Yicheng”), a PRC limited liability company and a wholly owned subsidiary, with a registered capital
of $50 million in Chengdu City, Sichuan Province, China. Yicheng obtained its business licenses for automobiles sale and has engaged in
the sales of automobiles since June 2019. As of the date of this prospectus, Senmiao Technology Limited has made contributions in
the aggregate amount of $5,750,000 to Yicheng.
On September 11, 2020, Senmiao Consulting
entered into an Investment Agreement relating to XXTX with all the original shareholders of XXTX, pursuant to which Senmiao Consulting
would make an investment of RMB3.16 million (approximately $0.44 million) in XXTX in cash and obtain a 51% equity interest accordingly.
As of the date of this prospectus, the Company had remit approximately full amount of investment to XXTX pertained to above mentioned
XXTX Investment Agreement.
On October 23, 2020, the registration procedures
for the change in shareholders and registered capital were completed and XXTX became a majority owned subsidiary of Senmiao Consulting.
On February 5, 2021, Senmiao Consulting and all the original shareholders of XXTX entered into a
supplementary agreement related to XXTX’s Investment agreement (the “XXTX Increase Investment Agreement”). Under the
XXTX Increase Investment Agreement, all the shareholders of XXTX agreed to increase the total registered capital of XXTX to RMB50.8 million
(approximately $7.40 million). Senmiao Consulting shall pay an additional amount of RMB36.84 million (approximately $5.08
million) in cash in exchange of additional 27.74% of XXTX’s equity interest. As of the date of this prospectus, the Company had
remitted approximately RMB36.84 million ($5.08 million) to XXTX pertained to above mentioned XXTX Increase Investment Agreement.
On October 22, 2021, Senmiao Consulting entered
into a Share Swap Agreement (the “Share Swap Agreement”) with certain shareholders of XXTX. Pursuant to which the Senmiao
Consulting shall acquire all of the remaining equity interests from the original shareholders of XXTX at a total purchase price of $3.5
million, payable in Senmiao’s shares of common stock, par value $0.0001 per share at a per share price of the average closing price
of a share of common stock reported on the Nasdaq Capital Market for ten (10) trading days immediately preceding the date of the
Share Swap Agreement. On November 9, 2021, the issuance of 533,167 (5,331,667 pre reverse split) shares of the Company’s common
stock for this transaction has been completed and on December 31, 2021, the registration procedures for the change in shareholders
have been completed. As a result, XXTX became a wholly-owned subsidiary of Senmiao Consulting.
As of the date of this prospectus, Senmiao Consulting
has made a cumulative capital contribution of RMB40.01 million (approximately $5.52 million) to XXTX and the remaining amount is expected
to be paid before December 31, 2025. As of the date of this prospectus, XXTX had eight wholly owned subsidiaries and two of them
have operations.
In December 2020, Senmiao Consulting formed
a wholly owned subsidiary, Corenel, with a registered capital of RMB10.0 million (approximately $1.6 million) in Chengdu City, Sichuan
Province. Corenel has engaged in automobile operating lease since March 2021.
In December 2020, Hunan Ruixi and a third
party jointly formed a subsidiary, Chengdu Xichuang Technology Service Co., Ltd. (“Xichuang”), with a registered capital
of RMB200,000 (approximately $32,000) in Chengdu City, Sichuan Province. Hunan Ruixi holds 70% of the equity interests of Xichuang. In
August 2021, Hunan Ruixi signed an equity transfer agreement with the remaining shareholder of Xichuang. Pursuant to the equity transfer
agreement, the remaining shareholder of Xichuang would transfer 30% of his shares to Hunan Ruixi for free. However, in November 2021,
Xichuang was dissolved. The dissolution of Xichuang did not have a material impact to the Company’s financial results.
In April 2021, Senmiao formed Senmiao Technology
(Hong Kong), Ltd. (“Senmiao HK”), a limited liability company with a registered capital of $10,000 in Hong Kong. We hold
99.99% of the equity interests of Senmiao HK. As of the date of this prospectus, Senmiao HK has no operations.
In March 2022, Corenel and another company
in Chengdu formed a subsidiary, Jiekai, with a registered capital of RMB500,000 (approximately $80,000) in Chengdu City, Sichuan Province.
Corenel holds 51% equity interests of Jiekai. Jiekai is engaged in automobile operating lease business since April 2022. In July 2023,
Corenel fully transfered its equity interests in Jiekai to Senmiao Consulting. As of the date of this prospectus, Jiekai had a subsidiary
without operation.
Our Corporate Structure
The following diagram illustrates the Company’s
corporate structure, including its subsidiaries, as of the date of this prospectus:
Former VIE Agreements with Sichuan Senmiao
Senmiao Consulting, Sichuan Senmiao and all the
shareholders of Sichuan Senmiao (the “Sichuan Senmiao Shareholders”) entered into an Equity Interest Pledge Agreement, an
Exclusive Business Cooperation Agreement, an Exclusive Option Agreement, Power of Attorneys, and Timely Report Agreements in September 2017
(collectively, the “Sichuan Senmiao VIE Agreements”). For the details of such agreements, please refer to the audited financial
statements contained in the annual report on Form 10-K filed with the SEC on July 8, 2021. According to the VIE Agreements,
Senmiao Consulting was the primary beneficiary of Sichuan Senmiao. And the financial statements of Sichuan Senmiao are consolidated in
the consolidated financial statements. Sichuan Senmiao suffered accumulated loss of approximately $18.0 million as of March 31, 2022 with
shareholders’ deficiency of $7.6 million. Due to such loss from Sichuan Senmiao, on March 23, 2022, Senmiao Consulting and
other shareholders with 94.5% equity interests of Sichuan Senmiao terminated the VIE Agreements and purchased Sichuan Senmiao’s
94.5% equity interests with total consideration of zero. Sichuan Senmiao became the majority owned subsidiary of Senmiao Consulting accordingly.
The termination and equity transaction has no significant impact on the consolidated financial statements.
Former Voting Agreements with Jinkailong’s
Other Shareholders
Hunan Ruixi entered into two voting agreements
signed in August 2018 and February 2020, respectively, as amended (the “Voting Agreements”), with Jinkailong and
other Jinkailong’s shareholders holding an aggregate of 65% equity interests. Pursuant to the Voting Agreements, all other Jinkailong’s
shareholders will vote in concert with Hunan Ruixi on all fundamental corporate transactions in the event of a disagreement for periods
of 20 years and 18 years, respectively, ending on August 25, 2038.
On March 31, 2022,
Hunan Ruixi entered into an Agreement for the Termination of the Agreement for Concerted Action by Shareholders of Jinkailong (the “Termination
Agreement”), pursuant to which the Voting Agreements mentioned above shall be terminated as of the date of the Termination Agreement.
The termination will not impair the past and future legitimate rights and interests of all parties in Jinkailong. Since March 31,
2023, the parties no longer maintain a concerted action relationship with respect to the decision required to take concerted action at
its shareholders meetings as stipulated in the Voting Agreements. Each party shall independently express opinions and exercise various
rights such as voting rights and perform relevant obligations in accordance with the provisions of laws, regulations, normative documents
and the Jinkailong’s articles of association.
As a result of the Termination
Agreement, the Company no longer has a controlling financial interest in Jinkailong and have determined that Jinkailong was deconsolidated
from the Company’s consolidated financial statements effective as of March 31, 2022. However, as Hunan Ruixi still holds 35% equity
interests in Jinkailong, Jinkailong is the equity investee company of the Company since then. As of March 31, 2023, the paid-in capital
of Jinkailong was zero.
Former VIE Agreements with Youlu
On December 7, 2021,
XXTX entered into a series of contractual arrangements (collectively, the “Youlu VIE Agreements”) with Youlu and each of its
equity holders (“Youlu Shareholders”). The terms of Youlu VIE Agreements were similar to the Sichuan Senmiao VIE Agreements.
According to the VIE Agreements, Youlu was obligated to pay XXTX service fees approximately equal to its net income. Youlu’s entire
operations were, in fact, directly controlled by XXTX. There were no unrecognized revenue-producing assets that were held by Youlu. However, on March 31, 2022, the Youlu VIE Agreements were terminated by XXTX and Youlu Shareholders. As Youlu has limited operation,
the termination has no significant impact on the consolidated financial statements.
Cash Transfer and Dividend Payment
None of Senmiao’s subsidiaries and former
VIEs have issued any dividends or distributions to respective holding companies, or to any investors as of the date of this prospectus.
Senmiao’s subsidiaries in the PRC generate and retain cash generated from operating activities and re-invest it in our business.
In the future, cash proceeds raised from overseas financing activities may be transferred to Senmiao’s PRC subsidiaries via capital
contribution and shareholder loans, as the case may be. Senmiao Consulting will transfer funds to XXTX and Sichuan Senmiao, respectively,
to meet the capital needs of their business operations.
The PRC government imposes controls on the convertibility
of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. All of Senmiao’s subsidiaries’
income is and, in the case of its former VIEs’ income, was, received in RMB and shortages in foreign currencies may restrict our
ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing
PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures
from trade-related transactions, can be made in foreign currencies without prior approval from The State Administration of the Foreign
Exchange (“SAFE”) in the PRC as long as certain procedural requirements are met. Approval from appropriate government authorities
is required if Renminbi is converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of
loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies
for current account transactions and if this occurs in the future, Senmiao may not be able to pay dividends in foreign currencies to its
shareholders.
Cash dividends, if any, on Senmiao’s common
stock will be paid in U.S. dollars. If Senmiao is considered a PRC tax resident enterprise for tax purposes, any dividends Senmiao pays
to its overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax. As of the
date of this prospectus, Senmiao has not made any dividends nor distributions to any U.S. investors.
Relevant PRC laws and regulations permit the PRC
companies to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and
regulations. Additionally, Senmiao’s PRC subsidiaries and long-term investments can only distribute dividends upon approval of the
shareholders after they have met the PRC requirements for appropriation to the statutory reserves. As a result of these and other restrictions
under the PRC laws and regulations, Senmiao’s PRC subsidiaries and long-term investments are restricted to transfer a portion of
their net assets to Senmiao either in the form of dividends, loans or advances. Even though Senmiao currently does not require any such
dividends, loans or advances from Senmiao’s PRC subsidiaries and long-term investments for working capital and other funding purposes,
Senmiao may in the future require additional cash resources from its PRC subsidiaries due to changes in business conditions, to fund future
acquisitions and developments, or merely declare and pay dividends to or distributions to Senmiao’s shareholders.
During each of the fiscal years ended March 31,
2023 and 2022, the only transfers of assets among our Company, were transfers of cash. Senmiao provided cash to its subsidiaries by way
of capital contribution and by way of loan, from the proceeds it received from financings. Meanwhile, Hunan Ruixi also repaid historical
loan to the Company by cash. In addition, there were loans obtained by certain of Senmiao’s Chinese subsidiaries, and those subsidiaries
loaned money to other of Senmiao’s Chinese subsidiaries to meet their working capital needs. The cash was transferred within our
Company by means of bank wires.
As of June 30, 2023 and March 31, 2023, Senmiao
invested or loaned directly an aggregate of approximately $23.9 million and $24.0 million in cash in its subsidiaries, Hunan Ruixi, Senmiao
Consulting and Yicheng. During the three months ended June 30, 2023 and the year ended March 31, 2023, Senmiao did not invest or loan
to its subsidiaries while Hunan Ruixi repaid $100,000 and $750,000 from the loan from Senmiao.
Under PRC laws and regulations, there are restrictions
on Senmiao’s PRC subsidiaries with respect to transferring certain of their net assets to Senmiao either in the form of dividends,
loans or advances. A PRC company is required to set aside general reserves of at least 10% of its after-tax profit, until the cumulative
amount of such reserves reaches 50% of its registered capital unless the provisions of laws regarding foreign investment provide otherwise.
As of June 30, 2023 and March 31, 2023 , the total respective registered capital of all the Company’s consolidated subsidiaries
was approximately RMB663 million (approximately $91.5 million) and RMB661 million (approximately $96.2 million), respectively.
Market Opportunity and Government
Regulations in China
Online Ride-hailing Platform
Services
The demand for XXTX’s
services depends on overall market conditions of the online ride-hailing industry in China. The continuous growth of the urban population
places increasing pressure on the urban transportation and the improvement of living standards has increased the market demand for quality
travel in China. Traditional taxi service is limited, and the merging online platforms have created good opportunities for the development
of the online ride-hailing service market. According to the 51th Statistical report on Internet
Development in China published in March 2023 by the China Internet Network Information Center (the “CNNIC”), the number of
online ride-hailing service users had reached 473 million by the end of December 2022, and took approximately 40.9% of the total number
of Chinese internet users. The online ride-hailing industry is facing increasing competition in China
and is attracting more capital investment. According to the MOT of the People’s Republic of China, as
of June 30, 2023, approximately 318 online ride-hailing platforms have obtained booking taxi operating licenses and the total volume of
online ride-hailing orders was approximately 763 million in June 2023 in China. Meanwhile, approximately 2.43 million online booking taxi
transportation certificates and approximately 5.79 million online booking taxi driver’s licenses were issued nationwide in China. Since
2019, in addition to the traditional online ride-hailing platforms, automobile manufacturers, offline operation service companies, financial
and map service providers, among others, have built cooperation relationships with each other to make the online ride-hailing industry
a more aggregated industry.
The online ride-hailing industry
may also be affected by, among other factors, the general economic conditions in China. The interest rates and unemployment rates may
affect the demand of ride-hailing services and automobile purchasers’ willingness to seek credit from financial institutions. Adverse
economic conditions could also reduce the number of qualified automobile purchasers and online ride-hailing drivers seeking credit from
the financial institutions, as well as their ability to make payments. Should any of those negative situations occur, the volume and value
of the automobile transactions we service will decline, and our revenue and financial condition will be negatively impacted.
In order to manage the rapidly
growing ride-hailing service market and control relevant risks, on July 27, 2016, seven ministries and commissions in China, including
the MOT, jointly promulgated the “Interim Measures for the Administration of Online Taxi Booking Business Operations and Services”
(“Interim Measures”) and amended on December 28, 2019, and November 30, 2022, which legalizes online ride-hailing services
such as XXTX and requires the online ride-hailing services to meet the requirements set out by the measures and obtain taxi-booking service
licenses and take full responsibility of the ride services to ensure the safety of riders.
On November 5, 2016, the
Municipal Communications Commission of Chengdu City and a number of municipal departments jointly issued the “Implementation Rules for
the Administration of Online Booking Taxi Management Services for Chengdu”, which was abolished and replaced by the updated version
issued on July 26, 2021. On August 10, 2017, the Transportation Commission of Chengdu further issued the detailed guidance “Working
Process for the Online Booking Taxi Drivers Qualification Examination and Issuance” and the “Online Booking Taxi Transportation
Certificate Issuance Process.” On November 28, 2016, Guangzhou Municipal People’s Government promulgated Interim Measures
for the Management of Online Ride Hailing Operation and Service in Guangzhou, as amended on November 14, 2019. According to these regulations
and guidelines, three licenses /certificates are required for operating the online ride-hailing business in Chengdu and Guangzhou: (1) the
ride-hailing service platform such as XXTX should obtain the online booking taxi operating license; (2) the automobiles used for
online ride-hailing should obtain the online booking taxi transportation certificate (“automobile certificate”); (3) the
drivers should obtain the online booking taxi driver’s license (“driver’s license”). Besides, all the new cars
used for online ride-hailing in Chengdu should be NEVs since July 2021.
On July 23, 2018, the General
Office of Changsha Municipal People’s Government issued the “Detailed Rules for the Administration of Online Booking
Taxi Management Services for Changsha.” On June 12, 2019, the Municipal Communications Commission of Changsha City further
issued “Transfer and Registration Procedures of Changsha Online Booking of Taxi.” According to the regulations and guidelines,
to operate a ride-hailing business in Changsha requires similar licenses in Chengdu, except those automobiles used for online ride-hailing
services are required to meet certain standards, including that the sales price (including taxes) is over RMB120,000 (approximately $17,000).
In practice, Hunan Ruixi is also required to employ a safety administrator for every 50 automobiles used for online ride-hailing services
and submit daily operation information of these automobiles such as traffic violation to the Transport Management Office of the Municipal
Communications Commission of Changsha City every month. On November 28, 2016, Guangzhou Municipal People’s Government also promulgated
Interim Measures for the Management of Online Ride Hailing Operation and Service in Guangzhou, as amended on November 14, 2019.
In addition to the national online
reservation taxi operating license, XXTX and its subsidiaries also obtained the online reservation taxi operating license in 31 cities,
Chengdu, Changsha, Guangzhou, Tianjin, Shenyang, Harbin, Nanchang, Haikou, Xining, two cities in Zhejiang, Shandong, and Guangxi Province,
respectively, three cities in Guizhou Province, five cities in Jiangsu Province, other two cities in Hunan and Guangdong Province, respectively,
and other four cities in Sichuan Province from June 2020 to July 2023, to operate the online ride-hailing platform services.
However, approximately 61% of
the ride-hailing drivers we served had not obtained the driver’s license as of June 30, 2023, while all of the cars used for online
ride-hailing services which we provided management services to have the automobile certificate. Without requisite automobile certificate
or driver’s license, these drivers may be suspended from providing ride-hailing services, confiscated their illegal income and subject
to fines of up to 10 times of their illegal income. Starting in December 2019, Didi began to enforce such limitation on drivers in
Chengdu who have a driver’s license but operate automobiles without the automobile certificate.
Furthermore, according
to the Interim Measures, no enterprise or individual is allowed to provide information for conducting online ride-hailing services to
unqualified vehicles and drivers. Pursuant to the Interim Measures, XXTX and its subsidiaries may be fined between RMB5,000 to RMB30,000
(approximately $690 to $4,137) for violations of the Interim Measures, including providing online ride-hailing platform services to unqualified
drivers or vehicles. During the three months ended June 30, 2023, we have been fined by approximately $19,000 by Traffic Management Bureaus
in Chengdu and Changsha, of which, approximately $15,000 was further compensated by drivers or cooperated third parties. If we are deemed
in serious violation of the Interim Measures, our Online Ride-hailing Platform Services may be suspended and the relevant licenses may
be revoked by certain government authorities.
We are in the process of assisting
the drivers to obtain the required certificate and license both for our Automobile Transaction and Related Services and our Online Ride-hailing
Platform Services. However, there is no guarantee that all of the drivers affiliated with us would be able to obtain all the certificates
and licenses. Our business and results of operations will be materially and adversely affected if our affiliated drivers are suspended
from providing ride-hailing services or imposed substantial fines or if we are found to be in serious violation of the Interim Measures
due to the drivers’ failure to obtain requite licenses and/or automobile certificates in connection with providing services through
our platform.
The Chinese government has exercised
and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership.
For example, the Chinese cybersecurity regulator announced on July 2, 2021 that it had begun an investigation of Didi and two days
later ordered that the company’s app be removed from smartphone app stores. We believe that our current operations are in compliance
with the laws and regulations of the Chinese cybersecurity regulator. However, the Company’s operations could be adversely affected,
directly or indirectly, by existing or future laws and regulations relating to its business or industry.
Vehicle Rental Services
Pursuant to the Administration
Measures for Operations and Services of Small and Micro Passenger Vehicles issued by the Ministry of Transport on December 20, 2020 and
last amended on August 11, 2021, rental business operators of small and micro passenger vehicles shall carry out record-filing procedures
with the city or county level counterparts of the Ministry of Transport where the business operations are conducted, within 60 days after
completing the relevant registration formalities with the local counterparts of the State Administration for Market Regulation, or within
60 days after establishing new service agencies to carry out relevant business activities. To qualify for the record filing procedures,
an applicant entity shall satisfy, among others, the following requirements: (i) being an independent legal person registered under the
PRC law; (ii) the vehicles used for rental business operations passing quality inspections, and the registered nature of these vehicles
being “rental”; (iii) having the business premises and management personnel eligible for the rental business; (iv) establishing
corresponding service institutions and having corresponding service capabilities locally; (v) developing comprehensive operation and management
systems, service procedures, safety management systems, and emergency response plans. Failure to complete the record-filing procedures
may subject the rental business operators of small and micro passenger vehicles to orders to rectify and fines ranging from RMB3,000 (approximately
US$437) to RMB10,000 (approximately US$1,456). All vehicles used for our Auto Operating Leasing have obtained the required licenses and
completed the registration.
Financial Leasing
In September 2013, the Ministry
of Commerce of the People’s Republic of China (“MOFCOM”) issued the Administration Measures of Supervision on Financing
Lease Enterprises (the “Leasing Measures”), to regulate and administer the business operations of financial leasing enterprises.
According to the Leasing Measures, financial leasing enterprises are allowed to carry out financial leasing businesses in such forms as
direct lease, sublease, sale-and-lease-back, leveraged lease, entrusted lease and joint lease in accordance with the provisions of relevant
laws, regulations and rules. However, the Leasing Measures prohibit financial leasing enterprises from engaging in financial businesses
such as accepting deposits, and providing loans or entrusted loans. Without the approval from relevant authorities, financial leasing
enterprises may not engage in inter-bank borrowing and other businesses. In addition, financial leasing enterprises are prohibited from
carrying out illegal fund-raising activities in the name of financial leases. The Leasing Measures require financial leasing enterprises
to establish and improve their financial and internal risk control systems, and a financial leasing enterprise’s risk assets may
not exceed ten times that of its total net assets.
In April 2018, China Banking
and Insurance Regulatory Commission, currently known as the National Financial Regulatory Administration of China (the “NFRAC”)
took over the authority over supervision of financing lease companies from MOFCOM.
On May 26, 2020, NFRAC issued
the Interim Measures for Supervision and Administration of Financial Leasing Companies (the “Financial Leasing Measures”),
which clarified the business scope, the scope of the leased property and the prohibited business or activity of the financial leasing
company, as well as other business-related definitions, such as purchase, registration, retrieval and value management of financial leasing
products. Financial leasing companies may conduct some or all of the following businesses: (1) financial leasing business; (2) leasing
business; (3) purchase, disposal of residual value and repair of leased assets related to financial leasing and leasing business,
consulting of the leasing transaction, receipt of leasing deposit; (4) transfer of financial leases or leased assets or acceptance
of financial leases or leased assets transferred; (5) fixed income securities investment business. The measures have also discussed
certain regulatory standards, including the proportion of financial leasing assets, the proportion of fixed income securities investment
business, business concentration and so on. Financial leasing companies shall not conduct the following businesses or activities: (1) illegal
fund-raising, acceptance or disguised acceptance of deposits; (2) extension of loans or entrusted loans; (3) placements with
or from other financial leasing companies or in disguise; (4) financing or transferring assets through Internet Lending Information
Intermediaries, private equity funds; (5) other businesses or activities prohibited by laws and regulations, the NFRAC and local
financial regulatory authorities in provinces, autonomous regions and municipalities.
The Financial Leasing
Measures clarify and enumerate the scopes of the financing lease business activities, the leased properties and the activities prohibited
to be conducted by the financing lease companies, and set forth the regulatory indexes applicable to financing lease companies including,
among others, (i) the assets for financial leasing and other lease arrangements accounting for not less than 60% of the total assets of
a financial leasing company; (ii) the risk assets of a financing lease company not exceeding eight times of its total net assets, and
the term “risk assets” of a financing lease company refers to its total assets, net of cash, bank deposits, Chinese treasury
bonds; (iii) the fixed-income securities investment business carried out by a financial leasing company not exceeding 20% of its net assets.
The Financial Leasing Measures also requires financial leasing companies should comply with the following regulatory indicators: (1) degree
of concentration of single client financing, meaning the balance of all financial leasing business of a financial leasing company to a
single lessee shall not exceed 30% of its net assets; (2) degree of concentration of single group client financing, meaning the balance
of all financial leasing business of a financial leasing company to a single group shall not exceed 50% of its net assets; (3) ratio of
a single related client, meaning the balance of all financial leasing business of a financial leasing company to a related party shall
not exceed 30% of its net assets; (4) ratio of all related parties, meaning the balance of all financial leasing business of a financial
leasing company to all related parties shall not exceed 50% of its net assets, and (5) ratio of a single related shareholder, meaning
the financing balance to a single shareholder and all its related parties shall not exceed the shareholder’s capital contribution
in the financial leasing company, and at the same time meet the provisions of the measures on the ratio of a single related client. The
CBIRC may make adjustments to the above indicators according to regulatory needs.
Financial leasing companies that
were established before the implementation of the Interim Measures for the Supervision and Administration of Financial Leasing Companies
are required meet the requirements stipulated in the Measures within the transition period prescribed by the provincial local financial
supervision department. In principle, the transition period shall not exceed three years. Provincial local financial supervision departments
can appropriately extend the transition period arrangement according to the actual situation of specific industries.
The PRC
Civil Code promulgated by the SCNPC effective from January 1, 2021 regulates the civil contractual relationship among natural persons,
legal persons and other organizations. Chapter 15 of the PRC Civil Code sets forth related rules about financing lease contracts
including that financing lease contracts shall be in written form and normally include terms such as the name, quantity, specifications,
technical performance and inspection method of the leased property, the lease term, the composition, payment term, payment method and
currency of the rent and the ownership of the leased property upon expiration of the lease. The PRC Civil Code further provides that the
lessor and the lessee may agree on the ownership of the leased property upon expiry of the lease term. If the ownership of the leased
property is not or is not clearly agreed between the parties, and is still cannot be determined pursuant to the PRC Civil Code, the leased
property shall be owned by the lessor.
As the date of this prospectus,
Hunan Ruixi, our proprietary financing lease subsidiary, has utilized its own capital to fund financing leases to automobile purchasers.
However, Hunan Ruixi has not complied with all the requirements stipulated under the Financial Leasing Measures and intends to rectify
and to comply with all the requirements stipulated under the Financial Leasing Measure during the transition period, failing which, Hunan
Ruixi cannot carry out financial leasing business.
Actual Impact of Coronavirus (COVID-19) in
China on Our Business
Impact on the Automobile
Transactions and Related Services
Our Automobile Transactions
and Related Services have been gradually recovering from the adverse impact of COVID-19 pandemic. As of June 30, 2023, 108 online ride-hailing
drivers we serviced rendered their automobiles to Hunan Ruixi. As a result, we recorded accumulated allowance for credit losses of $358,889
for them. As most of the leasing term of the automobiles we delivered in Changsha in prior periods has come to the end, during the three
months ended June 30, 2023, the number of newly rendered automobiles decreased to 0 as compared with 3 during the three months ended June
30, 2022. Meanwhile, over 1,200 online ride-hailing drivers rendered their automobiles to Jinkailong as of June 30, 2023.
Our cash flow has been
adversely impacted by local resurgences of COVID-19 in Chengdu, Changsha and Guangzhou while the COVID-19 measures in China kept applying
the current control and prevention measures especially from September to November 2022, which had negative impact on the online ride-hailing
market accordingly due to travel restriction.
Impact on the Ride-Hailing
Platform Services
Chengdu suffered an infection
peak in the middle of December 2022, after China lifted the prevention and control of COVID-19 infection strategy early that month. Base
on the surveys released from Sichuan Provincial Center for Disease Control and Prevention, the actual infection rate of the surveyed population
was estimated to be over 80 percent. And the peak of positive detection in the whole province was concentrated from December 12 to 23,
which caused significant decreasing orders for online ride-hailing in December. The central government of China has adjusted the prevention
and control measures of COVID-19, and gradually restored the order of production and life, which would bring optimism for us to operate
our online ride-hailing platform in the next 12 months.
Any of these factors
related to COVID-19 and other similar or currently unforeseen factors beyond our control could have an adverse effect on our overall business
environment, causing uncertainties in the regions in China where we conduct business, and causing our business to suffer in ways that
we cannot predict and materially and adversely impact our business, financial condition and results of operations.
Customers
The significant majority of our Operating Entities’
customers are online ride-hailing drivers. Due to the complexity and difficulty of obtaining registration of various licenses required
for driving an online ride-hailing car, our customers choose to lease automobile from us or become affiliated with us who offer them a
simplified and smooth process to become qualified. The automobile leasees typically lease automobiles which meet the criteria of cars
used for online ride-hailing for their own business in the industry. The automobile purchasers typically become affiliated with Hunan
Ruixi and Jinkailong through affiliation agreements pursuant to which we, as a qualified management company, provide them post-transaction
management services during the affiliation period, which is usually the same as the term of the Financing Agreements. The users of Xixingtianxia
platform typically use it to view and take customer orders for rides.
Our Operating Entities acquire customers through
the network of third-party sales teams, cooperated lease companies and our own efforts including online advertising and billboard advertising.
Our operating entities also send out fliers and participate in trade shows to advertise our services. During
the year ended March 31, 2023, we have served over 7,000 customers, including approximately 4,000 customers of Jinkailong, for our Automobile
Transaction and Related Services. During the year ended March 31, 2023, approximately 6.1 million rides with gross fare of approximately
$19.9 million were completed through our platform orders. During the three months ended June 30, 2023, we have served over 2,000 customers,
including approximately 1,000 customers of Jinkailong, for our Automobile Transaction and Related Services. During the three months ended
June 30, 2023, approximately 1.7 million rides with gross fare of approximately $5.3 million were completed through our platform orders.
Risk Management
To mitigate risk associate with our Automobile
Transaction and Related Services and Online Ride-hailing Platform Services, our operating entities conduct assessments and evaluations
of prospective online ride-hailing drivers and leases separately, including identity verification and background checks. For an online
ride-hailing platform driver who uses our platform as well as purchases or leases automobile from our operating entities, the assessments
typically involve two rounds from our subsidiaries who operate Automobile Transaction and Related Services and Online Ride-hailing Platform
Services, respectively. We believe our manual review and verification process is sufficient for the requirements of our current operations.
Our Operating Entities conduct an initial screening
when they receive an application from a prospective automobile buyer/leasee based on credit reports from People’s Bank of China
(“PBOC”) and third party credit rating companies, and personal information including residence, ethnicity group, driving history
and involvement in legal proceeding. An automobile buyer/leasee must meet the following preliminary criteria:
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be between 18-65 years old; |
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reside in the mainland of China and have the local residential identification; |
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have a driving history of at least three years; |
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not be subject to on-going legal proceedings or enforcement; |
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not be listed on a national delinquent debtor’s list; |
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the value of purchased automobile matches the income of the candidate. |
Additionally, our Operating Entities arrange a
simple in-person interview with the applicant where we gather information on marital/family status, income, assets, borrowing history
and default history, if any. This interview is typically conducted by our operating entities’ risk management staff who will verify
the accuracy of information on the prospective driver by cross-checking information provided by the applicant with other sources. Our
operating entities will also assess the prospective customer’s potential repayment ability.
Applicants with any of the follow attributes will
be rejected for:
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engaging in illegal or criminal activities; |
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involvement in pornography, gambling, drug dealing and gangster activities and experiences; |
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engaging in usury lending; or |
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providing fraudulent information. |
Our Operating Entities also conduct an assessment
and evaluation when they receive an application from a prospective online ride-hailing driver. Under our online ride-hailing platform’s
standards, a qualified driver must meet certain minimum criteria:
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have obtained online booking taxi driver's license with age of 21 to 60 years old for males; 21 to 55 years old for females; |
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have a driving history of at least three years with driving license of (i) A1, A2, A3, B1, B2, C1 and C2 (referring to the different classes of driver’s license in China based on vehicle types); |
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must not have committed any hit-and-run accidents; |
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have no record of dangerous driving, drug use, driving under alcoholic influence, and violent crime; |
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have no traffic violation of 12 demerit points or more in any year of the past three years; and |
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have not been investigated or disciplined for unlawfully engaging in taxi services or other passenger transportation operations in Chengdu City within the past five years. |
XXTX’s online ride-hailing platform also
set criteria for the automobiles used for online ride-hailing business, which need to be completed before the driver commences to use
the automobile for online ride-hailing business:
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has obtained online booking taxi transportation certificate and be registered as "reserved taxi service" with less than 7 seats and local registered number; or in accordance with the requirements by local government; |
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has installed vehicle satellite positioning device and emergency alarm device with driving record function; |
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motor vehicle driving permit is still in use; |
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has been covered with compulsory insurance for motor vehicle traffic accident liability and compulsory insurance for third party liability of motor vehicle, and within the insurance period, or in accordance with the requirements by local government; |
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vehicle miles traveled is less than 600,000 km and the service life is less than 8 years; |
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other requirements by local government. |
Post-Financing Services
Our Auto Business Entities' post financing management
department is in charge of monitoring and managing monthly payments by the purchaser/leasee. Our Auto
Business Entities send text messages and make phone calls as reminders three business days prior to the payment due date. If a
purchaser/leasee fails to pay on the due day, our Auto Business Entities will pay the financial
institution on behalf of the defaulted automobile purchaser but continue to contact the automobile purchaser and request for payments.
If the delinquency continues for more than 15 days, our Auto Business Entities then seek
to repossess the car. Every car purchased through us has a GPS device installed, which helps us locate the car. Our Drivers & Automobile
Management and Services department also monitor the daily gross income of our served online ride-hailing drivers through our cooperated
online ride-hailing platforms as well as trace the location of each car at least once a week. If there is any indicator such as the driver’s
daily income is far behind the average level or the trajectory is unusual, our Drivers & Automobile Management and Services department
shall contact the driver immediately and repose the car if necessary. After a car is repossessed, our Auto
Business Entities store it in a warehouse and later dispose of the automobile in accordance with law and relevant financing documents.
If our Auto Business Entities are unable to repossess collateral from a delinquent automobile
purchaser/leasee, they may commence a lawsuit against such purchaser.
Competition
The online ride-hailing industry in China is large
and evolving. There were approximately 300 automobile financing and leasing companies that provide automobile purchasing and leasing services
to online ride-hailing drivers in Chengdu and Changsha City as of June 2023. We face significant competition primarily from companies
that operate in Chengdu City, such as Sichuan Hengchuang Times Automobile Serving Co., Ltd., and Changsha Huolongguo Automobile Leasing
Co., Ltd.
Meanwhile, Didi takes over 80% market share of
the online ride-hailing platforms in China according to the public information. We choose to cooperate with well-known aggregation platforms
to commence our online ride-hailing platform business rather than competing with Didi directly. As of June 2023, there were over 110 companies
who operate their own online ride-hailing platforms and have established business relationships with Gaode in Chengdu, Changsha and Guangzhou,
our major operation cities and are engaged in the same business as ours. We face significant competition primarily from platforms that
have operation in Chengdu and Changsha City, such as Caocao, Robotaxi and Feima Chuxing. We expect to have more cooperation with other
aggregation platforms in the online ride-hailing industries to have more competitive advantage in the industry.
Many of our competitors are well-capitalized and
offer discounted services, driver incentives, consumer discounts and promotions, innovative service and product offerings, and alternative
pricing models, which may be more attractive to consumers than those that we offer. Further, some of our current or potential competitors
have, and may in the future continue to have, greater resources and access to larger driver and consumer bases in a particular geographic
market. In addition, our competitors in certain geographic markets enjoy substantial competitive advantages such as greater brand recognition,
longer operating histories, better localized knowledge, and more supportive regulatory regimes. As a result, such competitors may be able
to respond more quickly and effectively than us in such markets to new or changing opportunities, technologies, consumer preferences,
regulations, or standards, which may render our products or offerings less attractive. In addition, future competitors may share in the
effective benefit of any regulatory or governmental approvals and litigation victories we may achieve, without having to incur the costs
we have incurred to obtain such benefits.
Securities Senmiao May Offer
Senmiao may offer and sell from time to time up
to an aggregate of $150,000,000 of any of, or units comprised of, or other combinations of, the following securities:
Common Stock. Senmiao may issue shares
of its common stock. Holders of common stock are entitled to receive dividends ratably if, as and when dividends are declared from time
to time by Senmiao’s board of directors out of funds legally available for that purpose, after payment of dividends required to
be paid on outstanding preferred stock or other securities with dividend rights senior to Senmiao’s common stock. Holders of common
stock are entitled to one vote per share. Holders of common stock have no cumulative voting rights in the election of directors.
Preferred Stock. Senmiao may issue shares
of its preferred stock in one or more series. Senmiao’s board of directors will determine the dividend, voting, conversion and other
rights of the series of preferred stock being offered.
Debt Securities. Senmiao may offer debt
securities, which may be secured or unsecured, senior, senior subordinated or subordinated, may be guaranteed by Senmiao’s subsidiaries,
and may be convertible into shares of Senmiao’s common stock. Senmiao may issue debt securities separately or together with, upon
conversion of or in exchange for other securities. It is likely that any debt securities issued will not be issued under an indenture.
Warrants. Senmiao may issue warrants to
purchase shares of common stock or preferred stock or debt securities. Senmiao may issue warrants independently or together with other
securities. Warrants sold with other securities as a unit may be attached to or separate or separable from the other securities for trading
purposes. To the extent any warrants are publicly tradable, Senmiao will issue them under one or more warrant agreements between Senmiao
and a warrant agent that Senmiao will name in the applicable prospectus supplement.
Rights. Senmiao may issue rights to purchase
shares of common stock or preferred stock or debt securities. Senmiao may issue rights independently or together with other securities.
Rights sold with other securities as a unit may be attached to or separate or separable from the other securities for trading purposes
and may be (but shall not be required to be) publicly listed securities.
Units. Senmiao may issue units comprised
of one or more of the other securities described herein, in any combination. Each unit will be issued so that the holder of the unit is
also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of
each included security.
Prospectus Supplement
Senmiao will describe the terms of any offering
in a supplement to this prospectus. Any prospectus supplement may also add, update or change information contained in this prospectus.
Such prospectus supplement will contain, among other pertinent information, the following information about the offered securities:
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title and amount; |
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offering price, underwriting discounts and commissions or agency fees, and Senmiao’s net proceeds; |
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any market listing and trading symbol; |
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names of lead or managing underwriters or agents and description of underwriting or agency arrangements; |
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the specific terms of the offered securities; and |
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a description of the method and terms of the offering. |
This prospectus may not be used to offer or sell
securities without a prospectus supplement which includes a description of the method and terms of the offering.
Company Information
Senmiao was incorporated in the State of Nevada
on June 8, 2017. Our principal executive offices are located at 16F, Building A, Shihao Square, Middle Jiannan Blvd., High-Tech Zone,
Chengdu, Sichuan, China 610000, and our telephone number is +86 28 61554399. Our website address is www.senmiaotech.com. Information
contained on our website does not constitute part of, and is not deemed incorporated by reference into, this prospectus.
RISK FACTORS
An investment in Senmiao’s securities involves
a high degree of risk. Before making any investment decision, you should carefully consider the risk factors set forth below, the information
under the caption “Risk Factors” in any applicable prospectus supplement, any related free writing prospectus that we may
authorize to be provided to you and the information under the caption “Risk Factors” in Senmiao’s Annual Report on Form 10-K
for the fiscal year ended March 31, 2023 and filed with SEC on July 13, 2023 (the “10-K”), which is incorporated by reference
in this prospectus, as updated by our subsequent filings under the Exchange Act.
These risks could materially affect our business,
results of operation or financial condition and affect the value of Senmiao’s securities. Additional risks and uncertainties that
are not yet identified may also materially harm our business, operating results and financial condition and could result in a complete
loss of your investment. You could lose all or part of your investment. For more information, see “Where You Can Find More Information.”
Historically, the PRC government initiated a series
of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal
activities in the securities market, enhancing supervision over china-based companies listed overseas using variable interest entity structure,
adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these
statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will
respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated,
if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept
foreign investments and list on an U.S. or other foreign exchange. Our corporate structure and being based in and having the majority
of our operations in China poses risks to investors. As more fully described throughout this prospectus and in the risk factors described
on page 35 of 10-K, which is incorporated by reference herein, there are significant regulatory, liquidity and enforcement risks
involved in investing in Senmiao’s securities. For example, there are risks arising from the legal system in China, including risks
and uncertainties regarding the enforcement of laws and that rules and regulations in China can change quickly with little advance
notice. Further, the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings
conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations or the
value of Senmiao’s common stock. Any actions by the Chinese government or Chinese regulatory authorities to exert more oversight
and control over offerings that are conducted overseas or foreign investment in China-based issuers, or to disallow our structure, could
pose significant risk to our business, and could significantly limit or completely hinder Senmiao’s ability to offer or continue
to offer securities to investors, which could cause the value of those securities to significantly decline or be worthless.
Substantial uncertainties and restrictions
with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact
upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.
Our business operations conducted through our
PRC operating entities may be adversely affected by the current and future political environment in the PRC. Recently, the PRC government
initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including
cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable
interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly
enforcement. The Chinese government exerts substantial influence and control over the manner in which we must conduct our business activities.
Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations. Under the current government leadership,
the government of the PRC has been pursuing reform policies which have adversely affected China-based operating companies whose securities
are listed in the United States, with significant policies changes being made from time to time without notice. There are substantial
uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations
governing our business, or the enforcement and performance of our contractual arrangements with borrowers in the event of the imposition
of statutory liens, death, bankruptcy or criminal proceedings. Only after 1979 did the Chinese government begin to promulgate a comprehensive
system of laws that regulate economic affairs in general, deal with economic matters such as foreign investment, corporate organization
and governance, commerce, taxation and trade, as well as encourage foreign investment in China. Although the influence of the law has
been increasing, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently
cover all aspects of economic activities in China. Also, because these laws and regulations are relatively new, and because of the limited
volume of published cases and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve
significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.
In addition, there have been constant changes and amendments of laws and regulations over the past 30 years in order to keep up with the
rapidly changing society and economy in China. Because government agencies and courts provide interpretations of laws and regulations
and decide contractual disputes and issues, their inexperience in adjudicating new business and new polices or regulations in certain
less developed areas causes uncertainty and may affect our business. Consequently, we cannot predict the future direction of Chinese legislative
activities with respect to either businesses with foreign investment or the effectiveness on enforcement of laws and regulations in China.
The uncertainties, including new laws and regulations and changes of existing laws, as well as judicial interpretation by inexperienced
officials in the agencies and courts in certain areas, may cause possible problems to foreign investors. Although the PRC government has
been pursuing economic reform policies for more than two decades, the PRC government continues to exercise significant control over economic
growth in the PRC through the allocation of resources, controlling payments of foreign currency, setting monetary policy and imposing
policies that impact particular industries in different ways. We cannot assure you that the PRC government will continue to pursue policies
favoring a market oriented economy or that existing policies will not be significantly altered, especially in the event of a change in
leadership, social or political disruption, or other circumstances affecting political, economic and social life in the PRC.
Accordingly, given the PRC government’s
significant oversight and discretion over the conduct of our operating subsidiaries and long-term investment’s business, it may intervene or
influence the operations of our PRC subsidiaries or our long-term investment at any time and to exert control over an offering of securities
conducted overseas and/or foreign investment in China-based issuers, which may cause us to make material changes to the operations of
our PRC subsidiaries or our long-term investment and could significantly limit or completely hinder our ability to offer or continue to
offer securities to investors and cause the value of our securities to significantly decline or be worthless.
Adverse regulatory developments in China
may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC
in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like
us with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.
In addition, uncertainties with respect to the PRC legal system could adversely af ect us.
We conduct all of our
business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRC subsidiaries are
generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable
to wholly foreign-owned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have
limited precedential value.
The recent regulatory
developments in China, in particular with respect to restrictions on China-based companies raising capital offshore, may lead to additional
regulatory review in China over our financing and capital raising activities in the United States. In addition, we may be subject to industry-wide
regulations that may be adopted by the relevant PRC authorities, which may have the effect of limiting our service offerings, restricting
the scope of our operations in China, or causing the suspension or termination of our business operations in China entirely, all of which
will materially and adversely affect our business, financial condition and results of operations. We may have to adjust, modify, or completely
change our business operations in response to adverse regulatory changes or policy developments, and we cannot assure you that any remedial
action adopted by us can be completed in a timely, cost-efficient, or liability-free manner or at all.
On February 17, 2023,
the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial
Measures”), which took effect on March 31, 2023. On the same date, the CSRC circulated Supporting Guidance Rules No. 1 through No.
5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and
relevant CSRC Answers to Reporter Questions, or collectively, the Guidance Rules and Notice, on CSRC’s official website. The Trial
Measures, together with the Guidance Rules and Notice, reiterate the basic principles for the overseas securities offering and listing
by domestic enterprises, and clarified and emphasized several aspects, which include but are not limited to: (1) criteria to determine
whether an issuer will be required to go through the filing procedures under the Trial Measures; (2) exemptions from immediate filing
requirements for issuers including those that have already been listed in foreign securities markets, including U.S. markets, prior to
the effective date of the Trial Measures, but these issuers shall still be subject to filing procedures if they conduct refinancing or
are involved in other circumstances that require filing with the CSRC; (3) a negative list of types of issuers banned from listing or
offering overseas, such as issuers whose affiliates have been recently convicted of bribery and corruption; (4) issuers’ compliance
with web security, data security, and other national security laws and regulations; (5) issuers’ filing and reporting obligations,
such as obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and obligation
after offering or listing overseas to file with the CSRC after it completes subsequent offerings and to report to the CSRC material events
including change of control or voluntary or forced delisting of the issuer; and (6) the CSRC’s authority to fine both issuers and
their relevant shareholders for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing
fraud and misrepresentation. Specifically, pursuant to the Trial Measures, our future securities offerings in the Nasdaq Capital Market
where we have previously offered and listed shall also be filed with the CSRC within 3 working days after the offering is completed. The
Trial Measures provide the CSRC with power to warn, fine, and issue injunctions against both PRC domestic companies, their controlling
shareholders, and their advisors in listing or offering securities (collectively, the “Subject Entities”), as well as individuals
directly responsible for these Subject Entities (the “Subject Individuals”). For failure to comply with the Trial Measures
Negative List or the Trial Measures Filing Obligations, or materially false or misleading statements in the filing and reporting required
by the Trial Measures: (1) PRC domestic companies, and their controlling shareholders if the controlling shareholders induced the PRC
domestic companies’ failure to comply, severally, may face warnings, injunctions to comply, and fines between RMB1 million and RMB10
million (approximately $145,647 and $1,456,473); the Subject Individuals in these entities may severally, face warnings and fines between
RMB0.5 million and RMB5 million (approximately $72,824 and $728,237). (2) Advisors in listing or offering securities that failed to dutifully
advise the PRC domestic companies and their controlling shareholders in complying with the Trial Measures and caused such failures to
comply can face warnings and fines between RMB0.5 million and RMB5 million (approximately $72,824 and $728,237); the Subject Individuals
in these advisor entities may, severally, face warnings and fines between RMB0.2 million and RMB2 million (approximately $29,129 and $291,295).
As the Trial Measures are newly issued, there remain uncertainties regarding its interpretation and implementation. Therefore, we cannot
assure you that we will be able to complete the filings for our future offerings and fully comply with the relevant new rules on a timely
basis, if at all. In addition, we cannot guarantee that we will not be subject to tightened regulatory review and we could be exposed
to government interference in China.
Compliance with China’s new Data Security
Law, Measures on Cybersecurity Review, Personal Information Protection Law, regulations and guidelines relating to the multi-level protection
scheme and any other future laws and regulations may entail significant expenses and could materially affect our business.
China has implemented or will implement rules and
is considering a number of additional proposals relating to data protection. China’s Data Security Law promulgated by the Standing
Committee of the National People’s Congress of China (the “SCNPC”) in June 2021, took effect in September 2021.
The Data Security Law provides that the data processing activities must be conducted based on “data classification and hierarchical
protection system” for the purpose of data protection and prohibits entities in China from transferring data stored in China to
foreign law enforcement agencies or judicial authorities without prior approval by the Chinese government. As the Data Security Law has
not yet come into effect, we may need to make adjustments to our data processing practices to comply with this law.
Additionally, China’s Cyber Security Law,
requires companies to take certain organizational, technical and administrative measures and other necessary measures to ensure the security
of their networks and data stored on their networks. Specifically, the Cyber Security Law provides that China adopt a multi-level protection
scheme (MLPS), under which network operators are required to perform obligations of security protection to ensure that the network is
free from interference, disruption or unauthorized access, and prevent network data from being disclosed, stolen or tampered. Under the
MLPS, entities operating information systems must have a thorough assessment of the risks and the conditions of their information and
network systems to determine the level to which the entity’s information and network systems belong-from the lowest Level 1 to the
highest Level 5 pursuant to the Measures for the Graded Protection and the Guidelines for Grading of Classified Protection of Cyber Security.
The grading result will determine the set of security protection obligations that entities must comply with. Entities classified as Level
2 or above should report the grade to the relevant government authority for examination and approval.
During the year ended March 31, 2022, the Cyberspace
Administration of China (the “CAC”) has taken action against several Chinese internet companies in connection with their initial
public offerings on U.S. securities exchanges, for alleged national security risks and improper collection and use of the personal information
of Chinese data subjects. According to the official announcement, the action was initiated based on the National Security Law, the Cyber
Security Law and the Measures on Cybersecurity Review, which are aimed at “preventing national data security risks, maintaining
national security and safeguarding public interests.”
It is unclear at the present time how widespread
the cybersecurity review requirement and the enforcement action will be and what effect they will have on the life sciences sector generally
and the Company in particular. China’s regulators may impose penalties for non-compliance ranging from fines or suspension of operations,
and this could lead to us delisting from the U.S. stock market.
Also, on August 20, 2021, the SCNPC passed
the Personal Information Protection Law, started to be implemented on November 1, 2021. The law creates a comprehensive set of data
privacy and protection requirements that apply to the processing of personal information and expands data protection compliance obligations
to cover the processing of personal information of persons by organizations and individuals in China, and the processing of personal information
of persons in China outside of China if such processing is for purposes of providing products and services to, or analyzing and evaluating
the behavior of, persons in China. The law also proposes that critical information infrastructure operators and personal information processing
entities who process personal information meeting a volume threshold to-be-set by Chinese cyberspace regulators are also required to store
in China personal information generated or collected in China, and to pass a security assessment administered by Chinese cyberspace regulators
for any export of such personal information. Lastly, the draft contains proposals for significant fines for serious violations of up to
RMB50 million or 5% of annual revenues from the prior year.
Interpretation, application and enforcement of
these laws, rules and regulations evolve from time to time and their scope may continually change, through new legislation, amendments
to existing legislation and changes in enforcement. Compliance with the Cyber Security Law and the Data Security Law could significantly
increase the cost to us of providing our service offerings, require significant changes to our operations or even prevent us from providing
certain service offerings in jurisdictions in which we currently operate or in which we may operate in the future. Despite our efforts
to comply with applicable laws, regulations and other obligations relating to privacy, data protection and information security, and our
belief that we are currently in compliance therewith, it is possible that our practices, offerings or platform could fail to meet all
of the requirements imposed on us by the Cyber Security Law, the Data Security Law and/or related implementing regulations. Any failure
on our part to comply with such law or regulations or any other obligations relating to privacy, data protection or information security,
or any compromise of security that results in unauthorized access, use or release of personally identifiable information or other data,
or the perception or allegation that any of the foregoing types of failure or compromise has occurred, could damage our reputation, discourage
new and existing counterparties from contracting with us or result in investigations, fines, suspension or other penalties by Chinese
government authorities and private claims or litigation, any of which could materially adversely affect our business, financial condition
and results of operations. Even if our practices are not subject to legal challenge, the perception of privacy concerns, whether or not
valid, may harm our reputation and brand and adversely affect our business, financial condition and results of operations. Moreover, the
legal uncertainty created by the Data Security Law and the recent Chinese government actions could materially adversely affect our ability,
on favorable terms, to raise capital, including engaging in follow-on offerings of our securities in the U.S. market or the Stock Exchange
of Hong Kong. While we believe that our current operations are in compliance with the laws and regulations of the Cyberspace Administration
of China, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its
business or industry.
Recent greater oversight by the CAC over
data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.
On December 28, 2021, the CAC and other relevant
PRC governmental authorities jointly promulgated the Cybersecurity Review Measures, which will take effect on February 15, 2022.
The Cybersecurity Review Measures provide that, in addition to critical information infrastructure operators (“CIIOs”) that
intend to purchase Internet products and services, net platform operators engaging in data processing activities that affect or may affect
national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity
Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data
processing, or overseas listing. The Cybersecurity Review Measures require that an online platform operator which possesses the personal
information of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries.
On November 14, 2021, the CAC promulgated
the draft Regulations on the Administration of Cyber Data Security for public comment, pursuant to which data processors conducting certain
activities must apply for cybersecurity review. The draft regulations also require that data processors processing important data or going
public overseas shall conduct an annual data security self-assessment or entrust a data security service institution to do so, and submit
the data security assessment report of the previous year to the local branch of the CAC before January 31 each year. Further, the draft
regulations would require internet platform operators to establish platform rules, privacy policies and algorithm strategies related to
data, and solicit public comments on their official websites and personal information protection related sections for no less than 30
working days when they formulate platform rules or privacy policies or makes any amendments that may have a significant impact on users’
rights and interests. In addition, platform rules and privacy policies formulated by operators of large internet platforms with more than
100 million daily active users, or amendments to such rules or policies by operators of large internet platforms with more than 100 million
daily active users that may have significant impacts on users’ rights and interests shall be evaluated by a third-party organization
designated by the CAC and reported to local branch of the CAC for approval. The CAC has solicited comments on this draft until December
13, 2021, but there is no definite timetable as to when the draft regulations will be enacted. As such, substantial uncertainties exist
with respect to the enactment timetable, final content, interpretation and implementation of such regulations.
We have made our determinations based on Yuantai
Law Offices, our PRC counsel, to the extent that the discussion relates to matters of CSRC, CAC and other government authorities on our
PRC subsidiaries’ operations and concluded that: as of the date of this Report, we, our PRC subsidiaries and equity investee company,
(i) are not required to obtain permissions from the CSRC, CAC or any other government authorities on our PRC subsidiaries’ operations,
and (ii) have not received or were denied such permissions by any PRC government authorities. If the Security Administration Draft is
enacted as proposed, we believe that the operations of our PRC subsidiaries and our listing will not be affected and that we will not
be subject to cybersecurity review by the CAC, given that our PRC subsidiaries possess personal data of fewer than one million individual
clients and do not collect data that affects or may affect national security in their business operations as of the date of this Report
and do not anticipate that they will be collecting over one million users’ personal information or data that affects or may affect
national security in the near future. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security
Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws,
regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration
Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we will take all reasonable measures
and actions to comply and to minimize the adverse effect of such laws on us. We cannot guarantee, however, that we will not be subject
to cybersecurity review and network data security review in the future. During such reviews, we may be required to suspend our operation
or experience other disruptions to operations. Cybersecurity review and network data security review could also result in negative publicity
with respect to our Company and diversion of our managerial and financial resources, which could materially and adversely affect our business,
financial conditions, and results of operations.
As of the date of this prospectus, we have not
received any notice from any authorities identifying our PRC subsidiaries as CIIOs. However, given the uncertainties surrounding the interpretation
and implementation of the Cyber Security Law, Data Security Law and relevant regulations, we cannot rule out the possibility that we,
or certain of our customers or suppliers may be deemed as a CIIO, or an operator processing “important data.” First, if we
are deemed as a CIIO, our purchase of network products or services, if deemed to be affecting or may affect national security, will need
to be subject to cybersecurity review, before we can enter into agreements with relevant customers or suppliers, and before the conclusion
of such procedure, these customers will not be allowed to use our products or services, and we are not allowed to purchase products or
services from our suppliers. There can be no assurance that we would be able to complete the applicable cybersecurity review procedures
in a timely manner, or at all, if we are required to follow such procedures. Any failure or delay in the completion of the cybersecurity
review procedures may prevent us from using certain network products and services, and may result in fines of up to ten times the purchase
price of such network products and services being imposed upon us, if we are deemed a CIIO using network products or services without
having completed the required cybersecurity review procedures. If the reviewing authority is of the view that the use of such network
products or services by us, or by certain of our customers or suppliers, involves risk of disruption, is vulnerable to external attacks,
or may negatively affect, compromise, or weaken the protection of national security, we may not be able to provide such products or services
to relevant customers, or purchase products or services from relevant suppliers. This could have a material adverse effect on our results
of operations and business prospects. Second, the notion of “important
data” is not clearly defined by the Cyber Security Law or the Data Security Law. In order to comply with the statutory requirements,
we will need to determine whether we possess important data, monitor the important data catalogs that are expected to be published by
local governments and departments, perform risk assessments and ensure we are complying with reporting obligations to applicable regulators.
We may also be required to disclose to regulators business-sensitive or network security-sensitive details regarding our processing of
important data, and may need to pass the government security review or obtain government approval in order to share important data with
offshore recipients, which can include foreign licensors, or share data stored in China with judicial and law enforcement authorities
outside of China. If judicial and law enforcement authorities outside China require us to provide data stored in China, and we are not
able to pass any required government security review or obtain any required government approval to do so, we may not be able to meet the
foreign authorities’ requirements. The potential conflicts in legal obligations could have adverse impact on our operations in and
outside of China.
Our common stock
will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCA Act, in the future
if the PCAOB is unable to inspect or investigate completely our auditors. The delisting of our common stock, or the threat of their being
delisted, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections
of our auditors would deprive our investors of the benefits of such inspections.
The Holding Foreign Companies
Accountable Act, or the HFCAA, was enacted on December 18, 2020. The HFCAA states if the SEC determines that we have filed audit reports
issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning
in 2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading
market in the United States.
Our
current auditor, Marcum Asia CPAs LLP, or Marcum Asia, the independent registered public accounting firm that issues the audit report
incorporated by reference elsewhere in this registration statement, as an auditor of companies that are traded publicly in the
United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular
inspections to assess its compliance with the applicable professional standards. Marcum Asia is headquartered in New York, New York, and
was not included in the list of PCAOB Identified Firms in the PCAOB Determination Report issued in December 2021. We are required by the
HFCAA to have an auditor that is subject to the inspection by the PCAOB. While our present auditor is located in the United States and
the PCAOB is able to conduct inspections on such auditor, to the extent this status changes in the future and our auditor’s audit
documentation related to their audit reports for our company becomes outside of the inspection by the PCAOB or if the PCAOB is unable
to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction, trading in our
common stock could be prohibited under the HFCAA, and as a result our common stock could be delisted from Nasdaq.
On March 24, 2021, the
SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA, which
became effective on May 5, 2021. We will be required to comply with these rules if the SEC identifies our auditors as having a “non-inspection” year
under a process to be subsequently established by the SEC.
On May 13, 2021, the
PCAOB proposed a new rule for implementing the HFCAA. Among other things, the proposed rule provides a framework for the PCAOB to use
when determining, under the HFCAA, whether it is unable to inspect or investigate completely registered public accounting firms located
in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. The proposed rule would also establish
the manner of the PCAOB’s determinations; the factors the PCAOB will evaluate and the documents and information it will consider
when assessing whether a determination is warranted; the form, public availability, effective date, and duration of such determinations;
and the process by which the board of the PCAOB can modify or vacate its determinations. The proposed rule was adopted by the PCAOB on
September 22, 2021 and approved by the SEC on November 5, 2021.
On
June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act which proposed to reduce the number of
consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, thus reducing the time
period before the securities of such foreign companies may be prohibited from trading or delisted. On December 29, 2022, the Accelerating
Holding Foreign Companies Accountable Act was signed into law by the U.S. House of Representatives, which officially reduce the number
of years that the auditor is not subject to inspection to two consecutive years. On December 16, 2021, the PCAOB issued a report on its
determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland
China and in Hong Kong because of positions taken by mainland China and Hong Kong authorities in those jurisdictions. The PCAOB has made
such designations as mandated under the HFCA Act. Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis,
identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future. As of the date of this
registration statement, our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021.
The SEC is assessing
how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above. The SEC
may propose additional rules or guidance that could impact us if our auditor is not subject to the PCAOB inspection. For example, on August
6, 2020, the President’s Working Group on Financial Markets, or the PWG, issued the Report on Protecting United States Investors
from Significant Risks from Chinese Companies to the then President of the United States. This report recommended the SEC implement five
recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfill its statutory
mandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCAA. However, some of the recommendations
were more stringent than the HFCAA. For example, if a company was not subject to the PCAOB inspection, the report recommended that the
transition period before a company would be delisted would end on January 1, 2022.
On August 26, 2022, the
PCAOB signed a Statement of Protocol with the CSRC and the Ministry of Finance of the PRC (the “Statement of Protocol”), which
is intended to enable the PCAOB to inspect and investigate completely registered public accounting firms in mainland China and Hong Kong.
According to a statement released by the PCAOB, the Statement of Protocol (i) provides the PCAOB with sole discretion to select the firms,
audit engagements and potential violations it inspects and investigates without consultation with, nor input from, Chinese authorities,
(ii) puts procedures in place for PCAOB inspectors and investigators to view complete audit work papers with all information included
and for the PCAOB to retain information as needed and (iii) provides the PCAOB with direct access to interview and take testimony from
all personnel associated with the audits the PCAOB inspects or investigates. While the Chairs of both the PCAOB and the SEC made statements
supporting the Statement of Protocol, both emphasized that this is only the first step in the process. As such, uncertainties remain regarding
how the Statement of Protocol will be implemented and how it will impact China-based issuers and there is no assurance that the PCAOB
will be able to execute, in a timely manner, its future inspections and investigations in a manner that satisfies the Statement of Protocol.
While the Statement of Protocol may lead to resolution of the previously identified issues, there can be no assurance that this will be
the case.
On December 15, 2022,
the PCAOB issued a new Determination Report which: (1) vacated the December 16, 2021 Determination Report; and (2) concluded that the
PCAOB has been able to conduct inspections and investigations completely in the PRC in 2022. The December 15, 2022 Determination Report
cautions, however, that authorities in the PRC might take positions at any time that would prevent the PCAOB from continuing to inspect
or investigate completely. As required by the HFCAA, if in the future the PCAOB determines it no longer can inspect or investigate completely
because of a position taken by an authority in the PRC, the PCAOB will act expeditiously to consider whether it should issue a new determination.
While the HFCAA is not
currently applicable to the Company because the Company’s current auditors are subject to PCAOB review, if this changes in the future for
any reason, the Company may be subject to the HFCAA. The implications of this regulation if the Company were to become subject to it are
uncertain. Such uncertainty could cause the market price of our common stock to be materially and adversely affected, and our securities
could be delisted or prohibited from being traded on Nasdaq earlier than would be required by the HFCAA. If our common stock
is unable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase
the common stock when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact
on the price of the common stock.
USE OF PROCEEDS
We intend to use the net proceeds from the sale
of any securities offered under this prospectus for general corporate purposes unless otherwise indicated in the applicable prospectus
supplement. General corporate purposes may include automobile purchases, the costs of providing leasing and other automobile transaction
services, including financial leasing, costs of developing other businesses, investments in other entities, costs of technology development,
costs of new hires, capital expenditures, funding for working capital and the costs of operating as a public company. Management will
retain broad discretion over the allocation of net proceeds.
We may seek to extend portions of the net proceeds
from the sale of any securities offered under this prospectus to Senmiao’s subsidiaries. In using such proceeds, we are permitted
under PRC laws and regulations as an offshore holding company to provide funding to Senmiao’s subsidiaries only through loans or
capital contributions and to Senmiao’s variable interest entity only through loans, subject to registration with government authorities
and limits on the amount of loans and capital contributions. Subject to satisfaction of the applicable government registration requirements,
we may extend inter-company loans to Senmiao’s subsidiaries or make additional capital contributions to Senmiao’s subsidiaries
to fund their capital expenditures or working capital. If we provide funding to Senmiao’s subsidiaries through loans, the total
amount of such loans may not exceed the difference between the entities’ total investments as registered with the foreign investment
authorities and their registered capital. Also, such loans must be registered with the PRC State Administration of Foreign Exchange or
its local branches. The aggregated registered capital of Senmiao’s subsidiaries is approximately $91.5 million. As of the date of
this prospectus, Senmiao has made total capital contributions and intercompany loans which could be transferred to capital contributions
of approximately $41.2 million to its subsidiaries.
Senmiao cannot assure you that we will be able
to obtain government registrations or approvals for loans or capital contributions to its subsidiaries on a timely basis, if at all. See
“Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans to and direct investment in PRC entities
by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of this offering to
make loans or additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our
ability to fund and expand our business” included in Senmiao’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023, which risk factor is incorporated herein by reference.
DESCRIPTION OF CAPITAL STOCK AND OTHER SECURITIES
SENMIAO MAY OFFER
General
The following description of Senmiao’s capital
stock (which includes a description of securities Senmiao may offer pursuant to the registration statement of which this prospectus is
a part) and other securities Senmiao may offer does not purport to be complete and is subject to and qualified in its entirety by reference
to Senmiao’s certificate of incorporation and bylaws, as they may be amended from time to time, any certificates of designations
through which Senmiao may establish the terms and conditions of particular series of preferred stock, other documents governing the terms
and conditions of particular securities and applicable provisions of Nevada law.
As of the date of this prospectus, Senmiao is
authorized to issue 500,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of preferred stock, par value
$0.0001 per share. As of the date of this prospectus, 8,068,040 shares of common stock were issued and outstanding (after the Company’s
1:10 reverse stock split effective April 6, 2022) and 991 shares of preferred stock were issued and outstanding, and Senmiao’s shares
of common stock outstanding were held of record by approximately 25 shareholders. These figures do not include securities that may be
issued: (i) pursuant to outstanding warrants to purchase shares of Senmiao’s common stock, or (ii) pursuant to Senmiao’s
2018 Equity Incentive Plan.
Senmiao may issue secured or unsecured debt securities
consisting of notes, debentures or other evidences of indebtedness which may be senior debt securities, senior subordinated debt securities
or subordinated debt securities, each of which may be convertible into equity securities. Senmiao may issue the debt securities as exchangeable
for or convertible into shares of common stock, preferred stock or other securities. The preferred stock may also be exchangeable for
and/or convertible into shares of common stock, another series of preferred stock or other securities. The debt securities, the preferred
stock, the common stock, the rights and the warrants are collectively referred to in this prospectus as the “securities.”
When a particular series of securities is offered, a supplement to this prospectus will be delivered with this prospectus, which will
set forth the terms of the offering and sale of the offered securities.
Common Stock
Each share of Senmiao’s common stock is
entitled to one vote on all matters submitted to a vote of Senmiao’s stockholders, including the election of directors. Generally,
all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all shares of common stock
that are present in person or represented by proxy. Holders of common stock representing a majority of Senmiao’s capital stock issued,
outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of Senmiao’s
stockholders. Senmiao’s articles of incorporation do not provide for cumulative voting in the election of directors. Holders of
common stock have no pre-emptive or conversion rights and there are no redemption provisions applicable to the common stock.
Preferred Stock
Senmiao’s board of directors has the authority
to issue preferred stock in one or more classes or series and to fix the designations, powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, including dividend rights, conversion right, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any class or series, without further vote or action by the stockholders. Although Senmiao has no
current plans to issue any shares of preferred stock, the issuance of shares of preferred stock, or the issuance of rights to purchase
such shares, could decrease the amount of earnings and assets available for distribution to the holders of common stock, could adversely
affect the rights and powers, including voting rights, of the common stock, and could have the effect of delaying, deterring or preventing
a change of control of Senmiao or an unsolicited acquisition proposal.
You should refer to the prospectus supplement
relating to the series of preferred stock being offered for the specific terms of that series, including:
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the title of the series and the number of shares in the series; |
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the price at which the preferred stock will be offered; |
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the dividend rate or rates or method of calculating the rates, the dates on which the dividends will be payable, whether or not dividends will be cumulative or noncumulative and, if cumulative, the dates from which dividends on the preferred stock being offered will accumulate; |
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the voting rights, if any, of the holders of shares of the preferred stock being offered; |
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the provisions for a sinking fund, if any, and the provisions for redemption, if applicable, of the preferred stock being offered, including any restrictions on the foregoing as a result of arrearage in the payment of dividends or sinking fund installments; |
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the terms and conditions, if applicable, upon which the preferred stock being offered will be convertible into Senmiao’s common stock, including the conversion price, or the manner of calculating the conversion price, and the conversion period; |
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the terms and conditions, if applicable, upon which the preferred stock being offered will be exchangeable for debt securities, including the exchange price, or the manner of calculating the exchange price, and the exchange period; |
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any listing of the preferred stock on any securities exchange; |
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any material United States federal income tax considerations applicable to the preferred stock being offered; |
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any preemptive rights; |
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the relative ranking and preferences of the preferred stock being offered as to dividend rights and rights upon liquidation, dissolution or the winding up of our affairs; |
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any limitations on the issuance of any class or series of preferred stock ranking senior or equal to the series of preferred stock being offered as to dividend rights and rights upon liquidation, dissolution or the winding up of our affairs; and |
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any additional rights, preferences, qualifications, limitations and restrictions of the series. |
This summary of any preferred stock offered is
not complete. For the terms of a particular series of preferred stock, you should refer to the prospectus supplement for that series and
the certificate of designations, if any, for that particular series.
Debt Securities
As used in this prospectus, the term “debt
securities” means any debentures, notes, bonds and other evidences of indebtedness that Senmiao may issue under this prospectus,
as supplemented, from time to time. The debt securities will either be senior debt securities, senior subordinated debt or subordinated
debt securities. Senmiao may also issue convertible or exchangeable debt securities. Debt securities may be issued under an indenture
(“Indenture”) entered into between Senmiao and a trustee to be named therein. Convertible or exchangeable debt securities
may not be issued under an Indenture.
The form of Indenture, if any, relevant to a particular
offering will be filed as exhibits to amendments to the registration statement of which this prospectus is a part. The statements and
descriptions in this prospectus or in any prospectus supplement regarding provisions of the Indenture and the debt securities will be
summaries thereof, will not be complete and will be subject and qualified in their entirety by reference to all of the provisions of the
Indenture (and any amendments or supplements Senmiao may enter into from time to time which are permitted under the Indenture) and the
debt securities.
Senmiao may issue debt securities from time to
time in one or more series, in each case with the same or various maturities, at par or at a discount. Unless indicated in a prospectus
supplement, Senmiao may issue additional debt securities of a particular series without the consent of the holders of the debt securities
of such series outstanding at the time of the issuance. Any such additional debt securities, together with all other outstanding debt
securities of that series, will constitute a single series of debt securities under the applicable Indenture and will be equal in ranking.
Should particular debt securities evidence unsecured
indebtedness, in the event of a bankruptcy or other liquidation event involving a distribution of assets to satisfy Senmiao’s outstanding
indebtedness, or an event of default under a loan agreement relating to indebtedness of Senmiao’s or Senmiao’s subsidiaries,
the holders of secured indebtedness, if any, would be entitled to receive payments on their indebtedness prior to payments being made
to the holders of the unsecured indebtedness.
Each prospectus supplement will describe the terms
relating to the specific series of debt securities being offered.
These terms will include some or all of the following:
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the title of debt securities and whether they are subordinated, senior subordinated or senior debt securities; |
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any limit on the aggregate principal amount of debt securities of such series; |
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the percentage of the principal amount at which the debt securities of any series will be issued; |
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the ability to issue additional debt securities of the same series; |
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the purchase price for the debt securities and the denominations of the debt securities; |
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the specific designation of the series of debt securities being offered; |
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the maturity date or dates of the debt securities and the date or dates upon which the debt securities are payable and the rate or rates at which the debt securities of the series shall bear interest, if any, which may be fixed or variable, or the method by which such rate shall be determined; |
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the basis for calculating interest if other than 360-day year or twelve 30-day months; |
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the date or dates from which any interest will accrue or the method by which such date or dates will be determined; |
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the duration of any deferral period, including the maximum consecutive period during which interest payment periods may be extended; |
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whether the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the manner of determining the amount of such payments; |
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the dates on which Senmiao will pay interest on the debt securities and the regular record date for determining who is entitled to the interest payable on any interest payment date; |
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the place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered to or upon Senmiao pursuant to the applicable Indenture; |
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the rate or rates of amortization of the debt securities; |
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if Senmiao possesses the option to do so, the periods within which and the prices at which Senmiao may redeem the debt securities, in whole or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions; |
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Senmiao’s obligation or discretion, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which Senmiao will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and conditions of such obligation; |
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the terms and conditions, if any, regarding the option or mandatory conversion or exchange of debt securities; |
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the period or periods within which, the price or prices at which and the terms and conditions upon which any debt securities of the series may be redeemed, in whole or in part at Senmiao’s option and, if other than by a board resolution, the manner in which any election by Senmiao to redeem the debt securities shall be evidenced; |
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any restriction or condition on the transferability of the debt securities of a particular series; |
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the portion, or methods of determining the portion, of the principal amount of the debt securities which Senmiao must pay upon the acceleration of the maturity of the debt securities in connection with any event of default if other than the full principal amount; |
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the currency or currencies in which the debt securities will be denominated and in which principal, any premium and any interest will or may be payable or a description of any units based on or relating to a currency or currencies in which the debt securities will be denominated; |
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provisions, if any, granting special rights to holders of the debt securities upon the occurrence of specified events; |
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any deletions from, modifications of or additions to the events of default or Senmiao’s covenants with respect to the applicable series of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable Indenture; |
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any limitation on Senmiao’s ability to incur debt, redeem stock, sell Senmiao’s assets or other restrictions; |
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the application, if any, of the terms of the applicable Indenture relating to defeasance and covenant defeasance (which terms are described below) to the debt securities; |
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what subordination provisions may apply to the debt securities; |
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the terms, if any, upon which the holders may convert or exchange the debt securities into or for Senmiao’s common stock, preferred stock or other securities or property; |
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whether Senmiao are issuing the debt securities in whole or in part in global form; |
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any change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable because of an event of default; |
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the depositary for global or certificated debt securities, if any; |
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any material United States federal income tax considerations applicable to the debt securities, including any debt securities denominated and made payable, as described in the prospectus supplement, in foreign currencies, or units based on or related to foreign currencies; |
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any right Senmiao may have to satisfy, discharge and defease Senmiao’s obligations under the debt securities, or terminate or eliminate restrictive covenants or events of default in the Indenture, by depositing money or U.S. government obligations with the trustee of the Indenture; |
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the names of any trustees, depositories, authenticating or paying agents, transfer agents or registrars or other agents with respect to the debt securities; |
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to whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid if other than in the manner provided in the applicable Indenture; |
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if the principal of or any premium or interest on any debt securities is to be payable in one or more currencies or currency units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined); |
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the portion of the principal amount of any debt securities which shall be payable upon declaration of acceleration of the maturity of the debt securities pursuant to the applicable Indenture if other than the entire principal amount; |
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if the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such debt securities as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined); and |
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any other specific terms of the debt securities, including any modifications to the events of default under the debt securities and any other terms which may be required by or advisable under applicable laws or regulations. |
Unless otherwise specified in the applicable prospectus
supplement, the debt securities will not be listed on any securities exchange. Holders of the debt securities may present registered debt
securities for exchange or transfer in the manner described in the applicable prospectus supplement. Except as limited by the applicable
Indenture, Senmiao will provide these services without charge, other than any tax or other governmental charge payable in connection with
the exchange or transfer.
Debt securities may bear interest at a fixed rate
or a variable rate as specified in the prospectus supplement. In addition, if specified in the prospectus supplement, Senmiao may sell
debt securities bearing no interest or interest at a rate that at the time of issuance is below the prevailing market rate, or at a discount
below their stated principal amount. Senmiao will describe in the applicable prospectus supplement any special federal income tax considerations
applicable to these discounted debt securities.
Senmiao may issue debt securities with the principal
amount payable on any principal payment date, or the amount of interest payable on any interest payment date, to be determined by referring
to one or more currency exchange rates, commodity prices, equity indices or other factors. Holders of such debt securities may receive
a principal amount on any principal payment date, or interest payments on any interest payment date, that are greater or less than the
amount of principal or interest otherwise payable on such dates, depending upon the value on such dates of applicable currency, commodity,
equity index or other factors. The applicable prospectus supplement will contain information as to how Senmiao will determine the amount
of principal or interest payable on any date, as well as the currencies, commodities, equity indices or other factors to which the amount
payable on that date relates and any material United States federal income tax considerations.
This summary of any debt securities offered is
not complete. For the terms of particular debt securities, you should refer to the prospectus supplement for those securities and the
Indenture, if any, for those securities.
Warrants
Senmiao may issue warrants for the purchase of
Senmiao’s common stock, preferred stock, debt securities, rights or units, or any combination thereof. Warrants may be issued independently
or together with Senmiao’s common stock, preferred stock, debt securities, rights or units and may be attached to or separate or
separable from any offered securities. To the extent warrants that Senmiao issues are to be publicly traded, each series of such warrants
will be issued under a separate warrant agreement to be entered into between Senmiao and a bank or trust company, as warrant agent. The
warrant agent will act solely as Senmiao’s agent in connection with such warrants. The warrant agent will not have any obligation
or relationship of agency or trust for or with any holders or beneficial owners of warrants.
This summary of any warrants offered is not complete.
For the terms of a particular series of warrants, you should refer to the prospectus supplement for that series of warrants, the form
of warrant and the form of warrant agreement, if any, for that particular series.
Rights
Senmiao may issue rights to purchase Senmiao’s
securities. The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights
offering, Senmiao may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to
which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering.
Each series of rights will be issued under a separate rights agent agreement to be entered into between Senmiao and one or more banks,
trust companies or other financial institutions, as rights agent. Senmiao will name such agent in the applicable prospectus supplement.
The rights agent will act solely as Senmiao’s agent in connection with the rights and will not assume any obligation or relationship
of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The prospectus supplement relating to any rights
Senmiao offers will include specific terms relating to the offering, including, among other matters:
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the date of determining the security holders entitled to the rights distribution; |
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the aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise of the rights; |
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the exercise price; |
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the conditions to completion of the rights offering; |
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the date on which the right to exercise the rights will commence and the date on which the rights will expire; and |
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any material United States federal income tax considerations; and |
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any other terms of the rights. |
If less than all of the rights issued in any rights
offering are exercised, Senmiao may offer any unsubscribed securities directly to persons other than Senmiao’s security holders,
to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as
described in the applicable prospectus supplement.
This summary of any rights offered is not complete.
For the terms of particular rights, you should refer to the prospectus supplement for those rights, the form of rights certificate and
the form of rights agreement, if any, for those rights.
Units
Senmiao may issue units comprised of shares of
common stock, shares of preferred stock, debt securities, rights and/or warrants in any combination. Senmiao may issue units in such amounts
and in as many distinct series as Senmiao wishes. Each unit will be issued so that the holder of the unit is also the holder of each security
included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The specific
terms of any series of units offered will be described in the applicable prospectus supplement. If Senmiao issues units, they may be issued
under one or more unit agreements to be entered into between Senmiao and a bank or other financial institution, as unit agent. If Senmiao
issues units, the forms of unit certificate and unit agreement, if any, relating to such units will be filed or incorporated by reference
as exhibits to the registration statement of which this prospectus is a part. The unit agreement under which a unit is issued may provide
that the securities included in the unit may not be held or transferred separately, or at any time before a specified date, or at any
time. The applicable prospectus supplement may describe:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; |
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any provisions of the governing unit agreement; |
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the price or prices at which such units will be issued; |
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any material United States federal income tax considerations; |
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and |
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any other terms of the units and of the securities comprising the units. |
This summary of any units offered is not complete.
For the terms of particular units, you should refer to the prospectus supplement for those units, the form of unit certificate and the
form of unit agreement, if any, for those units.
Transfer Agent and Registrar
The transfer agent and registrar for Senmiao’s
common stock is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598.
Listing
Senmiao’s common stock is listed on The
Nasdaq Capital Market under the trading symbol “AIHS.”
PLAN OF DISTRIBUTION
Senmiao may sell the securities from time to time
pursuant to underwritten public offerings, direct sales to the public, privately negotiated transactions, block trades, ordinary brokerage
transactions, through the writing of options (listed or unlisted), in “at the market” offerings, using a combination of these
methods or using any other method or methods permitted under applicable law. Senmiao may sell the securities to or through underwriters
or dealers, through agents, or directly to one or more purchasers. Senmiao may distribute securities from time to time in one or more
transactions:
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at a fixed price or prices, which may be changed; |
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at market prices prevailing at the time of sale; |
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at prices related to such prevailing market prices; or |
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at negotiated prices. |
A prospectus supplement or supplements will describe
the terms of each separate offering of securities, including, to the extent applicable:
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the terms of the offering; |
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the name or names of the underwriters, if any; |
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the purchase price or prices of the securities or other consideration therefor, and the proceeds, if any, we will receive from the sale; |
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any over-allotment options under which underwriters may purchase additional securities from Senmiao; |
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any agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation; |
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any public offering price or prices; |
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any discounts or concessions allowed or re-allowed or paid to dealers; |
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any delayed delivery requirements; and |
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any securities exchange or market on which the securities may be listed or traded. |
Only underwriters or agents named in a prospectus
supplement will be underwriters or agents in respect of the securities offered by that prospectus supplement.
If underwriters are used in the sale, they will
acquire the securities for their own account and may resell the securities from time to time in one or more transactions at a fixed public
offering price or at varying prices determined at the time of sale. In most or all circumstances, the obligations of the underwriters
to purchase the securities will be subject to the conditions set forth in the applicable underwriting agreement. Senmiao may offer the
securities to the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate.
Subject to certain conditions, the underwriters may be obligated to purchase all of the securities offered by the prospectus supplement,
other than securities covered by any over-allotment option. Any public offering price and any discounts or concessions allowed or re-allowed
or paid to dealers may change from time to time. Senmiao may use underwriters with whom Senmiao has a material relationship. Senmiao will
describe in the prospectus supplement, naming the underwriters, the nature of any such relationship.
Senmiao may sell securities directly or through
agents it designates from time to time. Senmiao will name any agent involved in the offering of securities, and Senmiao will describe
any commissions Senmiao will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, Senmiao’s
agent will act on a best-efforts basis for the period of its appointment.
Senmiao may authorize agents or underwriters to
solicit offers from certain types of institutional investors to purchase securities from Senmiao at the public offering price set forth
in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future.
Senmiao will describe the terms and conditions in these contracts and the commissions Senmiao must pay for solicitation of these contracts
in the prospectus supplement.
Senmiao may make sales through the Internet or
through other electronic means. If Senmiao elects to offer securities directly to the public, with or without the involvement of agents,
underwriters or dealers, using the Internet or other forms of electronic bidding or ordering systems for the pricing and allocation of
such securities, Senmiao will describe the system being used in the prospectus supplement. Such electronic system may allow bidders to
directly participate, through electronic access to an auction site, by submitting conditional offers to buy that are subject to acceptance
by Senmiao and which may directly affect the price or other terms and conditions at which the securities are sold. These bidding or ordering
systems may present to each bidder, on a so-called “real-time” basis, relevant information to assist in making a bid, such
as the clearing spread at which the offering would be sold, based on the bids submitted, and whether a bidder’s individual bids
would be accepted, prorated or rejected. For example, in the case of a debt security, the clearing spread could be indicated as a number
of “basis points” above an index treasury note. Many other pricing methods can and may also be used. Upon completion of such
an electronic auction process, securities would be allocated based on prices bid, terms of bid or other factors. The final offering price
at which securities would be sold and the allocation of securities among bidders would be based in whole or in part on the results of
the Internet or other electronic bidding process or auction.
Senmiao may provide agents and underwriters with
indemnification against certain civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments
that the agents or underwriters may have to make with respect to these liabilities. Agents and underwriters may engage in transactions
with, or perform services for, Senmiao in the ordinary course of business.
All securities Senmiao may offer, other than common
stock, will represent new classes or series of securities with no established trading market. Any underwriters may make a market in these
securities, but will not be obligated to do so, and may discontinue any market making at any time without notice. Senmiao cannot guarantee
the liquidity of the trading markets for any securities.
Any underwriter may engage in over-allotment,
stabilizing or short-covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves
sales in excess of the offering size, which creates a short position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum price. Syndicate-covering or other short-covering transactions
involve purchases of the securities, either through exercise of an over-allotment option or in the open market after the distribution
is completed, to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities
originally sold by the dealer are purchased in a stabilizing or covering transaction to cover short positions. These activities may cause
the price of the securities to be higher than it would otherwise be. If commenced, these activities may be discontinued at any time.
Any underwriters or agents that are qualified
market makers on The Nasdaq Capital Market may engage in passive market making transactions in the common stock on The Nasdaq Capital
Market in accordance with Regulation M under the Exchange Act, during the business day prior to the pricing of the offering, before the
commencement of offers or sales of Senmiao’s common stock. Passive market makers must comply with applicable volume and price limitations
and must be identified as passive market makers. In general, a passive market maker must display its bid at a price not in excess of the
highest independent bid for such security; if all independent bids are lowered below the passive market maker’s bid, however, the
passive market maker’s bid must then be lowered when certain purchase limits are exceeded. Passive market making may stabilize the
market price of the securities at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued
at any time.
Regulation M may restrict the ability of any person
engaged in the distribution of securities to engage in market-making activities for the particular securities being distributed for a
period of up to five business days before the distribution. These restrictions may affect the marketability of the securities and the
ability of any person or entity to engage in market-making activities for the securities.
In compliance with guidelines of the Financial
Industry Regulatory Authority (“FINRA”), the maximum compensation or discount to be received by any FINRA member or independent
broker or dealer in a transaction subject to such guidelines may not exceed specified limits determined by FINRA.
To the extent required, this prospectus may be
amended or supplemented from time to time to describe a more specific plan of distribution.
LEGAL MATTERS
Certain legal matters in connection with this
offering will be passed upon for Senmiao by Flangas Law Group. Any underwriters will also be advised about the validity of the securities
and other legal matters by their own counsel, which will be named in the prospectus supplement.
EXPERTS
The financial statements incorporated in this
prospectus by reference to Senmiao’s Annual Report on Form 10-K for the year ended March 31, 2023, have been so incorporated
in reliance upon the report of Marcum Asia CPAs LLP, Senmiao’s current auditors, and Friedman LLP, Senmiao’s previous auditors,
both independent registered public accounting firms, given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement
that Senmiao has filed with the SEC. Certain information in the registration statement has been omitted from this prospectus in accordance
with the rules of the SEC. For further information, Senmiao refers you to the registration statement and the exhibits and schedules
filed as part of the registration statement. Statements contained in this prospectus or incorporated by reference concerning the contents
of any contract or any other document are not necessarily complete. If a contract or document has been filed or incorporated by reference
as an exhibit to the registration statement, Senmiao refers you to the copy of the contract or document that has been filed. Each statement
contained in this prospectus or incorporated by reference concerning the contents of a contract or document filed as an exhibit is qualified
in all respects by the contents of the filed exhibit.
Senmiao files its registration statements, as
well as periodic reports, proxy and information statements and other information, with the SEC. Senmiao’s registration statements,
periodic reports, proxy statements and other information are available for inspection and copying at the SEC’s public reference
room and on the SEC’s website at http://www.sec.gov, where the SEC maintains a collection of registration statements, periodic
reports, proxy and information statements and other information regarding issuers like Senmiao that file electronically with the SEC.
INCORPORATION BY REFERENCE
The SEC allows Senmiao to incorporate into this
prospectus by reference the reports and other documents Senmiao files with it, which means that Senmiao can disclose important information
to you by referring you to those reports and other documents. The information incorporated into this prospectus by reference is an important
part of this prospectus, and information that Senmiao files later with the SEC will automatically update and supersede the information
already incorporated by reference into this prospectus. Senmiao is incorporating by reference the documents listed below, which Senmiao
has already filed with the SEC, and any future filings Senmiao makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus and prior to the termination of the related offering, including all filings made after
the date of the filing of the registration statement of which this prospectus is a part and prior to the effectiveness of such registration
statement, except as to any portion of any future report or other document that is not deemed filed under such provisions:
| |
· |
any filings Senmiao makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this prospectus and prior to the termination of the related offering, including all filings made after the date of the filing of the registration statement of which this prospectus is a part and prior to the effectiveness of such registration statement, except as to any portion of any future report or other document that is not deemed filed under such provisions. |
Senmiao will furnish without charge to you, on
written or oral request, a copy of any or all of the documents incorporated by reference in this prospectus, including any exhibits to
those documents. You should direct any requests for documents to Senmiao at 16F, Shihao Square, Middle Jiannan Blvd., High-Tech Zone,
Chengdu, Sichuan, People’s Republic of China 610000, telephone: +86 28 61554399.
You also may access these filings on Senmiao’s
website at www.ihongsen.com. Senmiao does not incorporate the information on its website into this prospectus or any supplement
to this prospectus and you should not consider any information on, or that can be accessed through, its website as part of this prospectus
or any supplement to this prospectus (other than those filings with the SEC that Senmiao specifically incorporates by reference into this
prospectus or any supplement to this prospectus).
Senmiao’s registration statements, periodic
reports, proxy statements and other information are available for inspection and copying at the SEC’s public reference room and
on the SEC’s website at http://www.sec.gov, where the SEC maintains a collection of registration statements, periodic reports,
proxy and information statements and other information regarding issuers like Senmiao that file electronically with the SEC.
Any statement contained in a document incorporated
or deemed to be incorporated by reference will be deemed modified, superseded or replaced for purposes of this prospectus to the extent
that a statement contained in this prospectus or in a later-filed document that is incorporated or deemed to be incorporated by reference
modifies, supersedes or replaces such statement.
$150,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Rights
Units
SENMIAO TECHNOLOGY LIMITED
PROSPECTUS
September 28, 2023
Part II—INFORMATION NOT REQUIRED
IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses payable by Senmiao in connection
with the issuance and distribution of the securities being registered (other than underwriting discounts and commissions, if any) are
set forth below. Each item listed is estimated, except for the SEC registration fee.
| SEC
registration fee |
|
$ |
10,191.70 |
|
| FINRA filing fee |
|
|
* |
|
| Legal fees and expenses |
|
|
* |
|
| Accounting fees and expenses |
|
|
* |
|
| Printing fees and expenses |
|
|
* |
|
| Transfer agent and trustee fees |
|
|
* |
|
| Miscellaneous |
|
|
* |
|
| Total |
|
$ |
* |
|
| |
* |
Estimated expenses not currently known. Each prospectus supplement will reflect estimated expenses based on the amount of the related offering. |
Item 15. Indemnification of Directors and Officers
Nevada Law
Section 78.7502 of the Nevada Revised Statutes
provides that a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the
right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with the action, suit or proceeding if he is not liable under Section 78.138 of the
Nevada Revised Statutes for breach of his or her fiduciary duties to the corporation or he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.
Section 78.7502 further provides a Nevada
corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement
and attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if
he is not liable under Section 78.138 of the Nevada Revised Statutes for breach of his or her fiduciary duties to the corporation
or he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim,
issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in
which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances
of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
To the extent that a director, officer, employee
or agent of a corporation has been successful on the merits or otherwise in defense of any non-derivative proceeding or any derivative
proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him or her against expenses, including
attorneys’ fees, actually and reasonably incurred in connection with the defense.
Further, Nevada law permits a Nevada corporation to purchase and maintain
insurance or to make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise for any liability asserted against him or her and liability and expenses incurred
by him or her in his or her capacity as a director, officer, employee or agent, or arising out of his or her status as such, whether or
not the corporation has the authority to indemnify him or her against such liability and expenses.
Charter Provisions of the Company
The Company’s articles of incorporation
provide that the Company shall provide indemnification to its directors and officers to the maximum extent permitted by law. The Company
shall pay advancements of expenses in advance of the final disposition of the action, suit or proceedings upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount even if it is ultimately determined that he or she is not entitled to indemnification
by the Company. The Company is permitted by the articles of incorporation to purchase and maintain insurance in connection with its indemnification
obligations. Insofar as indemnification for liabilities arising under the Securities Act, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, Senmiao has been advised that the opinion of the SEC is that
such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Item 16. Exhibits
A list of exhibits filed with this registration
statement on Form S-3 is set forth in the Exhibit Index and is incorporated herein by reference.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during
any period in which offers or sales are being made, a post-effective amendment to this registration statement:
| |
(i) |
to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| |
(ii) |
to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| |
(iii) |
to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however, that
paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in
a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
| |
(2) |
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; |
| |
(3) |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; |
| |
(4) |
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
| |
(i) |
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| |
(ii) |
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(l)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; |
| |
(5) |
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| |
(i) |
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| |
(ii) |
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| |
(iii) |
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and (iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser; and |
| |
(iv) |
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (6) | That, for purposes of determining any liability of the registrant
under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. |
| (7) | If the securities to be registered are to be offered to existing security holders pursuant to warrants
or rights and any securities not taken by security holders are to be reoffered to the public, to supplement the prospectus, after the
expiration of the subscription period, to set forth the results of the subscription offer, the transactions by the underwriters during
the subscription period, the amount of unsubscribed securities to be purchased by the underwriters, and the terms of any subsequent reoffering
thereof. If any public offering by the underwriters is to be made on terms differing from those set forth on the cover page of the
prospectus, a post-effective amendment will be filed to set forth the terms of such offering. |
| (8) | (i) To use its best efforts to distribute prior to the opening of bids, to prospective bidders, underwriters,
and dealers, a reasonable number of copies of a prospectus which at that time meets the requirements of section 10(a) of the Act,
and relating to the securities offered at competitive bidding, as contained in the registration statement, together with any supplements
thereto, and (ii) to file an amendment to the registration statement reflecting the results of bidding, the terms of the reoffering
and related matters to the extent required by the applicable form, not later than the first use, authorized by the issuer after the opening
of bids, of a prospectus relating to the securities offered at competitive bidding, unless no further public offering of such securities
by the issuer and no reoffering of such securities by the purchasers is proposed to be made. |
| (9) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue. |
| (10) | To file an application for the purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of the Trust Indenture Act. |
| |
(i) |
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and |
| |
(ii) |
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
EXHIBIT INDEX
| |
* |
To be filed, if necessary, by amendment or as an exhibit to a document to be incorporated or deemed to be incorporated by reference in this registration statement, including a Current Report on Form 8-K. |
| |
** |
To be filed, if necessary, pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939, by amendment or as an exhibit to a document to be incorporated or deemed to be incorporated by reference in this registration statement, including a Current Report on Form 8-K. |
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3
and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Chengdu,
Sichuan, China, on September 28, 2023.
| |
SENMIAO TECHNOLOGY LIMITED |
| |
|
|
| |
By: |
/s/ Xi Wen |
| |
|
Xi Wen |
| |
|
Chairman of the Board, President, Chief Executive Officer and Secretary (Principal Executive Officer) |
POWER OF ATTORNEY
Each person whose individual signature appears
below hereby authorizes and appoints Xi Wen and Xiaoyuan Zhang, and each of them, with full power of substitution and resubstitution and
full power to act without the other, as his or her true and lawful attorney in fact and agent to act in his or her name, place and stead
and to execute in the name and on behalf of such person, individually and in each capacity stated below, and to file any and all amendments
to this Registration Statement, including without limitation any and all pre- and post-effective amendments thereto, and any registration
statement relating to the same offering as this Registration Statement relates that is to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S.
Securities and Exchange Commission, granting unto said attorneys in fact and agents, and each of them, full power and authority to do
and perform each and every act and thing in connection therewith, and ratifying and confirming all that said attorneys in fact and agents
or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement and the foregoing Power of Attorney have been signed by the following persons in the capacities
and on the dates indicated.
| Signature |
|
Title |
|
Date |
| /s/ Xi Wen |
|
Chairman of the Board, President, Chief Executive Officer and Secretary |
|
September 28, 2023 |
| Xi Wen |
|
(Principal Executive Officer)
|
|
|
| |
|
|
|
|
| /s/ Xiaoyuan Zhang |
|
Chief Financial Officer and Treasurer |
|
September 28, 2023 |
| Xiaoyuan Zhang |
|
(Principal Financial and Accounting Officer)
|
|
|
| |
|
|
|
|
| /s/ Trent D. Davis |
|
Director |
|
September 28, 2023 |
| Trent D. Davis |
|
|
|
|
| |
|
|
|
|
|
/s/ Xiaojuan
Lin |
|
Director |
|
September 28, 2023 |
| Xiaojuan Lin |
|
|
|
|
| |
|
|
|
|
| /s/ Sichun Wang |
|
Director |
|
September 28, 2023 |
| Sichun Wang |
|
|
|
|
| |
|
|
|
|
| /s/ Jie Gao |
|
Director |
|
September 28, 2023 |
| Jie Gao |
|
|
|
|
Exhibit 5.1
FLG
Flangas Law Group
Writer's email: kps@fdlawlv.com
September 28, 2023
Board of Directors
Senmiao Technology Limited
16F Shihao Square
Middle Jiannan Blvd. High-Tech Zone
Chengdu, Sichuan, 61000-0, China
| Re: |
|
Senmiao Technology Limited
Registration Statement on Form S-3 |
Ladies and Gentlemen:
We
have acted as special Nevada counsel for Senmiao Technology Limited, a Nevada corporation (the “Company”), in connection
with the preparation of a registration statement on Form S-3 (the “Registration Statement”), filed by the Company
with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Act of 1933, as amended (the “Securities
Act”), to register any combination of shares of the common stock, par value $0.0001 per share, of the Company (“Common
Stock”), and/or preferred stock, par value $0.0001 per share, of the Company (“Preferred Stock”), various
series of debt securities, warrants to purchase any of such securities, and/or rights to purchase shares of our Common Stock or Preferred
Stock, either individually or in units comprised of any of such securities, in one or more offerings, (each a “Company Security”
and collectively, or in any combination, the “Company Securities”), for an aggregate offering price of up to $150,000,000.
The Company Securities may
be issued and sold by the Company pursuant to applicable provisions of Rule 415 under the Securities Act, in amounts, at prices and
on terms to be determined in light of market conditions at the time of sale, and as set forth in the Registration Statement, any amendment
thereto. The Company Securities may be issued from time to time on a delayed or continuous basis, and this opinion is limited to the laws,
including the rules and regulations, as in effect on the date hereof, which laws are subject to change with possible retroactive
effect.
In arriving at the opinion
expressed below, we have examined such corporate proceedings, records and documents, and such matters of law, as we have considered necessary
for the purposes of this opinion. As to matters of fact, we have examined and relied upon the representations of the Company contained
in the Registration Statement and, where we have deemed appropriate, representations or certificates of officers of the Company or public
officials. As part of our examination, we have examined the following documents, among others:
3275 South Jones Blvd., Suite 105 | Las Vegas, Nevada 89146 |
Phone: (702) 307-9500 | Fax: (702) 382-9452
September 28, 2023
Page 2 of 7
| A. | the Registration Statement; |
| B. | the Articles of Incorporation of the Company; |
| C. | the Certificate of Amendment; |
| D. | the Bylaws of the Company; |
| E. | a Certificate of Good Standing issued by the Secretary of State of the State of Nevada, dated September 27,
2023, certifying that the Company is in existence and in good standing in the State of Nevada; |
| F. | a certain Unanimous Written Consent of the Board of Directors of the Company, dated September 28,
2023; and |
| G. | a certain certificate of the officers of the Company certifying as to certain factual matters. |
In rendering the opinion expressed
below, we have assumed without verification the genuineness of all signatures, the legal capacity of natural persons, the authenticity
of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity
of the originals of such copies, and the due authorization, execution and delivery of all documents by all parties and the validity, binding
effect and enforceability thereof (other than the authorization, execution and delivery of documents by the Company and the validity,
binding effect and enforceability thereof upon the Company). In addition, we have assumed and not verified the accuracy as to the factual
matters of each document we have reviewed and the accuracy of, and each applicable party’s full compliance with, any representations
and warranties contained therein. Accordingly, we are relying upon (without any independent investigation thereof) the truth and accuracy
of the statements, covenants, representations and warranties set forth in the documents we have reviewed.
Based upon the foregoing and
subject to the assumptions, exceptions, limitations and qualifications set forth herein, we are of the opinion that:
| 1. | The Company is a corporation validly existing and in good standing under the laws of the state of Nevada. |
| 2. | With respect to shares of Common Stock, when (a) the board of directors of the Company has taken
all necessary corporate action to approve the issuance and terms of the offering thereof and related matters, including without limitation
the due reservation of any Common Stock for issuance, and (b) certificates representing the shares of Common Stock have been duly
executed, countersigned, registered and delivered, in each case in accordance with the Articles of Incorporation and Bylaws, either (i) in
accordance with the applicable definitive purchase, underwriting or similar agreement approved by the board of directors of the Company
upon payment of the consideration therefor (which consideration shall not be less than the par value of the Common Stock) provided for
in such definitive purchase, underwriting or similar agreement, as applicable, or (ii) upon conversion, exchange or exercise of any
other Company Security in accordance with the terms of such Company Security or the instrument governing such Company Security providing
for the conversion, exchange or exercise as approved by the board of directors of the Company, for the consideration therefor set forth
in the applicable agreement and approved by the board of directors of the Company, which consideration shall not be less than the par
value of the Common Stock, such shares of Common Stock will be validly issued, fully paid and non-assessable. |
September 28, 2023
Page 3 of 7
| 3. | With respect to shares of any series of Preferred Stock, when (a) the board of directors of the Company
has taken all necessary corporate action to approve the issuance and terms of the shares of such series, the terms of the offering thereof
and related matters, including the adoption of a certificate of designation or amendment to the Articles of Incorporation fixing and determining
the terms of such Preferred Stock conforming to the NRS, the filing of a certificate or amendment, as applicable, with the Secretary of
State of Nevada, the payment in full of any filing fees attendant thereto, and the due reservation of any Common Stock and Preferred Stock
for issuance, and (b) certificates representing the shares of such series of Preferred Stock have been duly executed, countersigned,
registered and delivered, in each case in accordance with the Articles of Incorporation and Bylaws, either (i) in accordance with
the applicable definitive purchase, underwriting or similar agreement approved by the board of directors of the Company upon payment of
the consideration therefor (which consideration shall not be less than the par value of the Preferred Stock) provided for in such definitive
purchase, underwriting or similar agreement, as applicable, or (ii) upon conversion, exchange or exercise of any other Company Security
in accordance with the terms of such Company Security or the instrument governing such Company Security providing for the conversion,
exchange or exercise as approved by the board of directors of the Company, for the consideration therefor set forth in the applicable
agreement and approved by the board of directors of the Company, which consideration shall not be less than the par value of the Preferred
Stock, the shares of such series of Preferred Stock will be validly issued, fully paid and non-assessable. |
| 4. | With respect to any debt securities when (a) the board of directors of the Company has taken all
necessary corporate action to approve an applicable indenture, if any, or any amendment or supplement thereto or other agreement in respect
thereof, if any, and such indenture, if any, or any amendment or supplement thereto or other agreement in respect thereof, if any, has
been validly executed and delivered by the Company, (b) any applicable indenture, if required, has been duly qualified under the
Trust Indenture Act of 1939, as amended, if qualification is required thereunder, (c) the board of directors of the Company has taken
all necessary corporate action to approve the specific issuance and terms of any series of debt security duly established in accordance
with the applicable indenture, if any, and (d) such debt security have been duly executed, countersigned, registered, issued and
delivered either (i) in accordance with the indenture, if any, or any amendment or supplement thereto or other agreement in respect
thereof, if any, the applicable definitive purchase, underwriting or similar agreement, as applicable, or (ii) upon conversion, exchange
or exercise of any other Company Security in accordance with the terms of such Company Security or the instrument governing such Company
Security providing for the conversion, exchange or exercise as approved by the board of directors of the Company, for the consideration
therefor set forth in the applicable agreement and approved by the board of directors of the Company, such debt securities will constitute
valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general
applicability, provided that we express no opinion as to (x) the enforceability of any waiver of rights under any usury or state
law, (y) the validity, legally binding effect or enforceability of any provision of the indenture that requires or relates to adjustments
to the conversion rate at a rate or in an amount that a court would determine in the circumstances under applicable law to be commercially
unreasonable or a penalty or forfeiture or (z) the validity, legally binding effect or enforceability of any provision that permits
holders to collect any portion of stated principle amount upon acceleration of the debt securities to the extent determined to constitute
unearned interest. |
September 28, 2023
Page 4of 7
| 5. | With respect to the issuance of any warrants, when (a) the board of directors of the Company has
taken all necessary corporate action to approve the warrant agreement to be entered into in connection with the issuance of any warrants
and such warrant agreement has been validly executed and delivered by the warrant agent and Company, (b) the board of directors of
the Company has taken all necessary corporate action to approve the specific issuance and terms of any warrants duly established in accordance
with the applicable warrant agreement and (c) such warrants have been duly executed, countersigned, registered, issued and delivered
in accordance with the warrant agreement and the applicable definitive purchase, underwriting or similar agreement, as applicable, for
the consideration therefor set forth in the applicable agreement and approved by the board of directors of the Company (assuming the securities
issuable upon exercise of the warrants have been duly authorized and reserved for issuance by all necessary corporate action and in accordance
with applicable law), such warrants will constitute valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts
of reasonableness and equitable principles of general applicability. |
| 6. | With respect to any rights to purchase securities, when (a) the board of directors of the Company
has taken all necessary corporate action to authorize the issuance and the specific terms of such rights, the terms of the offering thereof,
and related matters and (b) such rights and agreements relating to the rights have been duly executed and delivered in accordance
with the terms thereof (assuming the securities underlying the rights have been duly authorized, and validly issued by all necessary corporate
action and in accordance with applicable law), then such rights will be valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms. |
September 28, 2023
Page 5of 7
| 7. | With respect to the issuance of any units, when (a) the board of directors of the Company has taken
all necessary corporate action to approve the unit agreement, if any, to be entered into in connection with the issuance of any units
and such unit agreement, if any, has been validly executed and delivered by the unit agent, if any, and Company, (b) the board of
directors of the Company has taken all necessary corporate action to approve the specific issuance and terms of any units duly established
in accordance with the applicable unit agreement, if any, and (c) such units have been duly executed, countersigned, registered,
issued and delivered in accordance with the unit agreement, if any, and the applicable definitive purchase, underwriting or similar agreement,
as applicable, for the consideration therefor set forth in the applicable agreement and approved by the board of directors of the Company
(assuming the securities underlying the units have been duly authorized, and validly issued by all necessary corporate action and in accordance
with applicable law), such units will constitute valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts
of reasonableness and equitable principles of general applicability. |
The opinions set forth above are subject to the
following additional assumptions:
| (i) | the Registration Statement, any amendments thereto (including post-effective amendments), will have been
declared effective under the Securities Act and such effectiveness shall not have been terminated, suspended or rescinded; |
| (ii) | all Company Securities will be issued and sold in compliance with applicable federal and state securities
laws, rules and regulations and solely in the manner provided in the Registration Statement and the appropriate Prospectus Supplement
and there will not have occurred any change in law or fact affecting the validity of any of the opinions rendered herein; |
| (iii) | a definitive purchase, underwriting or similar agreement and any other necessary agreements with respect
to any Company Securities offered or issued will have been duly authorized and duly executed and delivered by the Company and the other
parties thereto; |
| (iv) | the final terms of any of the Company Securities (including any Company Securities comprising the same
or subject thereto), and when issued, the issuance, sale and delivery thereof by the Company, and the incurrence and performance of the
Company’s obligations thereunder or respect thereof in accordance with the terms thereof, and any consideration received by the
Company for any such issuance, sale and delivery, will comply with, and will not violate, the Articles of Incorporation or Bylaws or any
applicable law, rule or regulation, or result in a default under or breach of any agreement or instrument binding upon the Company
and will comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company or
to which the issuance, sale and delivery of such Company Securities or the incurrence and performance of such obligations may be subject
or violate any applicable public policy, or be subject to any defense in law or equity; |
September 28, 2023
Page 6 of 7
| (v) | the Company shall have taken any action required to be taken by the Company, based on the type of Company
Security being offered, to authorize the offer and issuance thereof, and such authorization shall remain in effect and unchanged at all
times during which the Company Securities are offered and issued and shall not have been modified or rescinded (subject to the further
assumption that the sale of any Company Security takes place in accordance with such authorization), the board of directors of the Company
shall have duly established the terms of such Company Security and duly authorized and taken any other necessary corporate action to approve
the issuance and sale of such Company Security in conformity with the Articles of Incorporation and Bylaws (subject to the further assumption
that neither the Articles of Incorporation nor Bylaws have been amended from the date hereof in a manner that would affect the validity
of any of the opinions rendered herein), and such authorization shall remain in effect and unchanged at all times during which the Company
Securities are offered and issued and shall not have been modified or rescinded (subject to the further assumption that the sale of any
Company Security takes place in accordance with such authorization); |
| (vi) | there will exist, under the Articles of Incorporation, the requisite number of authorized but unissued
shares of Common Stock or Preferred Stock (and securities of any class into which any of the Preferred Stock may be convertible), as the
case may be; and |
| (vii) | to the extent they purport to relate to liabilities resulting from or based upon gross negligence, recklessness
or other conduct committed or omitted willfully or in bad faith or any violation of federal or state securities or blue sky laws, we express
no opinions concerning the enforceability of indemnification provisions. |
We render this opinion only
with respect to, and we express no opinion herein concerning the application or effect of the laws of any jurisdiction other than, the
existing laws of the state of Nevada. We express no opinion with respect to any other laws or with respect to the “blue sky”
securities laws of any state.
We render this opinion subject
to applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfer or conveyance), reorganization,
moratorium and other similar laws affecting creditors’ rights generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law), including, without limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b) concepts of materiality, reasonableness, good faith and fair
dealing, and we express no opinion herein with respect to provisions relating to severability or separability.
We express no opinion as to
any provision in any unit purchase agreement other agreement pursuant to which any Company Securities are to be issued or governed, or
the Articles of Incorporation or Bylaws (i) that purports to waive forum non conveniens or trial by jury; (ii) that relates
to judgments in currencies other than U.S. dollars; (iii) that releases, exculpates or exempts a party from, or requires indemnification
or contribution of a party for, liability for its own negligence or misconduct; (iv) that purports to allow any party to unreasonably
interfere in the conduct of the business of another party; (v) that purports to require any party to pay any amounts due to another
party without a reasonable accounting of the sums purported to be due; (vi) that purports to prohibit the assignment of rights that
that may be assigned pursuant to applicable law regardless of an agreement not to assign such rights; (vii) that purports to require
that amendments to any agreement be in writing; (viii) relating to powers of attorney, severability or set-off; (ix) that purports
to limit access exclusively to any particular courts; (x) that provides a waiver of stay, extension or usury laws or of unknown future
rights; and (xi) providing that decisions by a party are conclusive or may be made in its sole discretion. We express no opinion
concerning whether a U.S. federal court would accept jurisdiction in any dispute, action, suit or proceeding arising out of or relating
to any agreement or the transactions contemplated thereby.
September 28, 2023
Page 7 of 7
We hereby consent to the filing
of this opinion as an exhibit to the Registration Statement. In giving our consent, we do not thereby admit that we are experts with respect
to any part of the Registration Statement within the meaning of the term “expert,” as used in Section 11 of the Securities
Act or the rules and regulations promulgated thereunder by the Commission, nor do we admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and regulations thereunder.
This opinion is limited to
the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. This opinion speaks
only as of the date of this letter, and we do not undertake by delivery of this opinion or otherwise to advise you of any change in any
matter set forth herein, whether based on a change in law (whether by legislative action, judicial decision, administrative decision or
otherwise) or a change in any fact arising subsequent to the date hereof that might affect any of the opinions expressed herein.
| |
Very truly yours, |
| |
|
| |
|
| |
/s/ FLANGAS LAW GROUP |
| |
|
| |
FLANGAS LAW GROUP |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of our report dated July 14, 2022, with respect to our audit of the consolidated financial statements of Senmiao Technology
Limited for the year ended March 31, 2022, which report appears in the Prospectus, and part of this Registration Statement. We also consent
to the reference to our firm under the heading “Experts” in such Registration Statement.
/s/ Friedman LLP
New York,
New York
September 28,
2023
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the incorporation by reference in this Registration Statement
of Senmiao Technology Limited on Form S-3 of our report dated July 12, 2023, which includes an explanatory paragraph as to the Company’s
ability to continue as a going concern, with respect to our audits of the consolidated financial statements of Senmiao Technology Limited
as of March 31, 2023 and for the year ended March 31, 2023 appearing in the Annual Report on Form 10-K of Senmiao Technology Limited
for the year ended March 31, 2023. We also consent to the reference to our firm under the heading “Experts” in the Prospectus,
which is part of this Registration Statement.
/s/ Marcum Asia CPAs LLP
New York,
New York
September 28,
2023
Exhibit 107
Calculation of Filing Fee Tables
……S-3…..
(Form Type)
……………………Senmiao
Technology Limited………………………..…
(Exact Name of Registrant as Specified in its Charter)
…………………Not
Applicable…………………
(Translation of Registrant’s Name into English)
Table 1: Newly Registered and Carry Forward
Securities
| |
Security
Type |
Security
Class
Title |
Fee
Calculation
or Carry
Forward
Rule |
Amount
Registered |
Proposed
Maximum
Offering
Price Per
Unit |
Maximum
Aggregate
Offering
Price |
Fee
Rate |
Amount of
Registration
Fee (2) |
Carry
Forward
Form
Type |
Carry
Forward
File
Number |
Carry
Forward
Initial
filing
date |
Filing Fee
Previously
Paid In
Connection
with Unsold
Securities to
be Carried
Forward |
| Newly Registered Securities |
|
Fees to Be
Paid |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Equity |
Common Stock, par value $0.0001 per share (3) |
(9) |
|
|
|
0.00011020 |
|
|
|
|
|
| |
Equity |
Preferred Stock, par value $0.0001 per share (4) |
|
|
|
|
0.00011020 |
|
|
|
|
|
| |
Debt |
Debt Securities (5) |
|
|
|
|
0.00011020 |
|
|
|
|
|
| |
Other |
Warrants (6) |
|
|
|
|
0.00011020 |
|
|
|
|
|
| |
Other |
Rights (7) |
|
|
|
|
0.00011020 |
|
|
|
|
|
| |
Other |
Units (8) |
|
|
|
|
0.00011020 |
|
|
|
|
|
| |
Unallocated (Universal) Shelf |
Unallocated (Universal) Shelf |
457(o) |
(1) |
(1) |
$150,000,000 |
0.00011020 |
$16,530 |
|
|
|
|
|
Fees
Previously
Paid |
|
|
|
|
|
|
|
|
|
|
|
|
| Carry Forward Securities |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Carry
Forward
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Offering Amounts |
|
|
|
|
|
|
|
|
| |
Total Fees Previously Paid |
|
— |
— |
|
|
|
|
|
| |
Total Fee Offsets |
|
|
|
|
|
|
|
|
| |
Net Fee Due |
|
|
|
|
|
|
|
|
| (1) |
The amount to be registered consists of a currently indeterminate amount of common stock, preferred stock, debt securities, warrants, rights and/or units, estimated solely for purposes of computing the registration fee. There is also being registered hereunder such currently indeterminate number of (i) shares of common stock or other securities of the registrant that may be issued upon conversion of, or in exchange for, convertible or exchangeable debt securities and/or preferred stock registered hereby or (ii) shares of common stock, preferred stock, debt securities, rights and/or units that may be issued upon exercise of warrants or rights registered hereby, as the case may be. Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. The proposed maximum aggregate offering price per unit will be determined from time to time by the registrant in connection with the issuance by the registrant of the securities registered hereunder and is not specified as to each class of security, pursuant to General Instruction II.D of Form S-3 under the Securities Act. No separate consideration will be received for (i) common stock or other securities of the registrant that may be issued upon conversion of, or in exchange for, convertible or exchangeable debt securities and/or preferred stock registered hereby or (ii) common stock, preferred stock, debt securities, rights and/ or units that may be issued upon exercise of warrants or rights registered hereby, as the case may be. |
| (2) |
The registration fee has been calculated in accordance with Rule 457(o) under the Securities Act. |
| (3) |
Including such currently indeterminate amount of common stock as may be issued from time to time at currently indeterminate prices or upon conversion or exchange of debt securities or preferred stock registered hereby, or upon exercise of warrants or rights registered hereby, as the case may be. |
| (4) |
Including such currently indeterminate amount of preferred stock as may be issued from time to time at currently indeterminate prices or upon exercise of warrants or rights registered hereby, as the case may be. |
| (5) |
Including such currently indeterminate principal amount of debt securities as may be issued from time to time at currently indeterminate prices or upon exercise of warrants or rights registered hereby, as the case may be. |
| (6) |
Including such currently indeterminate number of warrants as may be issued from time to time at currently indeterminate prices. |
| (7) |
Including such currently indeterminate number of rights, including share purchase or subscription rights, as may be issued from time to time at currently indeterminate prices. |
| (8) |
Including such currently indeterminate number of units as may be issued from time to time at currently indeterminate prices. Each unit will represent an interest in two or more securities registered hereby, which may or may not be separable from one another. |
(9) |
Calculated pursuant to Rule 457(o) under the Securities Act. In connection
with the $150,000,000 maximum aggregate offering price of securities being registered hereunder, registration fees of $16,530 are payable. |
Table 2: Fee Offset Claims and Sources
| |
Registrant
or Filer
Name |
Form
or
Filing
Type |
File
Number |
Initial
Filing
Date |
Filing
Date |
Fee Offset
Claimed |
Security Type
Associated
with Fee
Offset
Claimed |
Security
Title
Associated
with Fee
Offset
Claimed |
Unsold
Securities
Associated
with Fee
Offset
Claimed |
Unsold
Aggregate
Offering
Amount
Associated
with Fee
Offset
Claimed |
Fee Paid
with Fee
Offset
Source |
| Rules 457(b) and 0-11(a)(2) |
Fees Offset
Claims |
|
|
|
|
|
|
|
|
|
|
|
Fees Offset
Sources |
|
|
|
|
|
|
|
|
|
|
|
| Rule 457(p) |
Fee Offset
Claims |
|
S-3 |
|
September 28, 2023 |
|
$13,905 |
Universal Shelf |
Common Stock and others |
(10) |
$150,000,000 |
$2,625 |
Fees Offset
Sources |
Senmiao Technology Ltd |
S-3 |
333-264316 |
April 15, 2022 |
April 15, 2022 |
|
|
|
|
|
$13,905(11) |
| (10) | Pursuant to Rule 457(p) under the Securities Act, the Registrant
is claim to offset the registration fee payable under this Registration Statement in the amount of $13,905 in U.S. dollars or the equivalent
in aggregate offering price of unsold securities (the “Unsold Securities”) that were previously registered on the Registrant’s
Registration Statement (File No. 333-264316) originally filed on April 15, 2022 (the “Withdrawn Registration Statement”)
and withdrew on February 2, 2023 before going effective. No securities were sold under the Withdrawn Registration Statement and the filing
fee of $13,905 that was previously paid in connection with those unsold securities pursuant to Rule 457(o) will continue to be applied
to those securities. A filing fee of $2,625 with respect to the shortfall between the Withdrawn Registration Statement and this Registration
Statement due to the SEC’s fee rates’ difference in different filing time period for the same $150,000,000 of securities
registered hereunder is being paid herewith. |
| (11) | Among $13,905 registration fee claimed to offset from the Withdrawn
Registration statement, $3,713.30 was initially paid under a registration statement on Form S-3 File No. 333-230397) originally filed
on March 19, 2019 and subsequently declared effective on April 15, 2019, related to the unsold shares under such registration statement
that was carried over to the Withdrawn Registration Statement. |
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